Pranatharthiharan Sreedharan vs. Union Of INDIA

Facts

The petitioner, Pranarthiharan Sreedharan, challenged the issuance of a show-cause notice and subsequent ex-parte adjudication orders by the respondent authorities, which imposed personal penalties. He argued that these orders were passed without proper service of notices, without granting a personal hearing, and without allowing cross-examination of relevant persons. The petitioner also contended that the Additional Director General of Central Excise Intelligence was not the proper officer to issue the show-cause notice for personal penalty and that knowledge of violations could not be attributed to him without due process. The respondents, in their reply, asserted that the principles of natural justice were followed and that the petitioner had an alternative remedy.

Held

The Court acknowledged that the core issue in the petitioner's case was identical to that decided in a previous Special Civil Application (No. 17477 of 2019). In that prior case, the Court had quashed ex-parte orders passed without service of a show-cause notice. Following the precedent, the Court agreed with the parties that upon service of the show-cause notice via e-mode, an opportunity would be provided to the petitioner for adjudication. The Court explicitly stated it was not entering into the merits of the matter. The original order to the extent it concerned the present petitioner was quashed and set aside. The show-cause notice forming part of the record was to be construed as the operative notice and served to the petitioner on his official email ID. The authority was directed to decide the matter by giving the petitioner a full opportunity, without being influenced by any other aspect. All contentions regarding the merits were left open for the parties to agitate before the appropriate forum.

Key Issues

1. Whether the ex-parte adjudication orders imposing personal penalties were validly passed without proper service of show-cause notices, personal hearing notices, and without granting cross-examination, thereby violating principles of natural justice? 2. Whether the Additional Director General of Central Excise Intelligence (now DGGSTI) was the proper officer to issue a show-cause notice proposing a personal penalty on the petitioner? 3. Whether the imposition of personal penalty on the petitioner, based solely on statement evidence, was legal without granting cross-examination of relevant persons? Petitioner's arguments: The petitioner contended that the impugned orders were illegal and void as they were passed ex-parte without adhering to the principles of natural justice, specifically regarding notice, hearing, and cross-examination. He argued that the Additional Director General was not the jurisdictional officer for assessment purposes and that attributing knowledge of violations to him without proper procedure was incorrect. He relied on the principle that personal penalties cannot be imposed without due process. Revenue's arguments: The respondents argued that the impugned order was passed after following the principles of natural justice and that the petitioner had an alternative remedy under the Central Excise Act.