M/S Laxmi Narayan Gupta vs. State Of U.P And 3 Others

Held

The Court acknowledged the petitioner's contention that mere production of a document does not amount to proof, citing Bareilly Electricity Supply Co. Ltd. vs. Workmen and others. However, the Court found that the writ remedy might not be the most appropriate given the alternative appellate remedy. The Court noted that the violation of Section 75(7) from the first leg of proceedings no longer existed and that efforts had been made to comply with the previous order, including providing documents and granting cross-examination of panch witnesses. The Court consciously refrained from making observations on the conclusions drawn from the panch witnesses' cross-examination statements, leaving that issue open for merit evaluation in appeal. Regarding the cross-examination of respondent Nos. 3 and 4, the Court accepted that the reasoning given by the adjudicating authority for denial was unsustainable. However, it held that this did not automatically mean the opportunity must have been granted. The decision on which witness to cross-examine rests with the adjudicating authority. The Court stated that denial for a wrong reason does not mandate granting the opportunity, but the petitioner is not remediless and can raise this issue in appeal. The appeal authority may allow cross-examination or call for a report. The Court also noted that the earlier grant of cross-examination by respondent No. 4 was an interlocutory order subject to further proceedings. Therefore, without commenting on the merits or the necessity of cross-examination of respondent Nos. 3 and 4, the Court disposed of the writ petition, directing that if the petitioner files an appeal within four weeks, it should be entertained and decided on its merits without objection as to limitation.

Facts

The petitioner filed a writ petition challenging an adjudication order dated 30.06.2026 passed under Section 74 of the SGST Act, 2017, for FY 2021-22. This was the second leg of litigation, following a previous High Court order that set aside earlier adjudication orders due to a violation of Section 75(7) of the Act. The petitioner was granted an opportunity to file a reply, claim cross-examination, and receive a reasoned order. A fresh show cause notice was issued, and the petitioner responded, requesting cross-examination of two panch witnesses and the SIB officer. The panch witnesses were cross-examined, allegedly denying the panchnama preparation in their presence. The SIB report was provided, revealing the adjudicating authority's involvement, leading to the transfer of proceedings. The petitioner then sought cross-examination of respondent Nos. 3 and 4, but without an order on this application, the final adjudication order was passed, stating these officers were granted immunity under Section 157 of the UPGST Act, 2017, and thus not cross-examined.

Key Issues

1. Whether the writ petition is the appropriate remedy given the availability of an alternative appellate remedy, considering the alleged incurable defects in the proceedings? 2. Whether the denial of the opportunity to cross-examine respondent Nos. 3 and 4, the officers involved in the search and preparation of the panchnama, vitiates the adjudication order? Petitioner's Arguments: The petitioner argued that the order of the Court dated 02.04.2026 had not been complied with, and the proceedings suffered from a violation of natural justice due to the denial of cross-examination of respondent Nos. 3 and 4. They contended that the panch witnesses denied the preparation of the panchnama in their presence, and without cross-examining respondent Nos. 3 and 4, the adjudicating authority could not rely on the panchnama. The petitioner asserted that the defects were incurable, rendering alternative remedies futile. They relied on Bareilly Electricity Supply Co. Ltd. vs. Workmen and others (1971) 2 SCC 617 regarding the proof of documents. Revenue's Arguments: The revenue argued that cross-examination was allowed to the extent necessary, and the panch witnesses did not consistently deny the panchnama preparation. They pointed to inconsistencies in the panch witnesses' statements, suggesting the panchnama was prepared in their presence. The revenue submitted that cross-examination of officers performing official duties was not mandatory to establish document contents. They also argued that the petitioner admitted to the preparation of the panchnama in paragraph 8 of the writ petition and that an adequate remedy of appeal was available.