M/S Rani Press PVT. LTD. Through Director Mr. Johar Ali Presswala vs. The Union Of INDIA

Held

The Court held that the adjudicating authority was wholly unjustified in refusing to extend the reliefs granted in the case of M/s Elora Tobacco Company Limited to the present petitioners. The Court rejected the revenue's contention that the order in Elora's case was merely 'in personam' and not binding on others. It emphasized the doctrine of judicial discipline and propriety, stating that a quasi-judicial authority is bound to follow directions issued by the High Court, especially when they pertain to fundamental principles of natural justice. The Court found that denying the petitioners access to non-relied upon documents and the right to cross-examine witnesses constituted a breach of natural justice. Consequently, the impugned order dated February 5, 2025, was quashed for the petitioners in WP Nos. 12375/2025, 14241/2025, 14592/2025, and 15808/2025. These matters were remanded back to the adjudicating authority to pass a fresh order after returning all unrelied documents to the petitioners, allowing them to file a fresh reply within 30 days, and affording them a due opportunity of hearing, including the right to cross-examine witnesses. The Court explicitly stated that it had not expressed any opinion on the merits of the case. For WP No. 17609/2025, the petition was dismissed as the petitioner had not appeared before the authority or made any applications for document return or cross-examination.

Facts

The petitioners, including M/s. Dabang Dunia Publications Private Limited, challenged an order-in-original dated February 5, 2025, passed by the Joint Commissioner, Central GST and Excise, Indore. This order confirmed a GST demand of approximately ₹151.64 crore and Compensation Cess of approximately ₹1794.58 crore. The petitioners contended that the order was passed in violation of natural justice principles, specifically denying them adequate opportunity to defend their case. They argued that they were not provided with copies of all non-relied upon documents and were denied the opportunity to cross-examine witnesses whose statements formed the basis of the allegations. The proceedings were initiated by a show cause notice dated June 8, 2022, alleging tax evasion and facilitation of money laundering through inflated circulation figures and fictitious advertisement invoices, in conjunction with M/s Elora Tobacco and its associates.

Key Issues

1. Whether the adjudicating authority, a quasi-judicial authority, was justified in refusing to extend the reliefs granted to M/s Elora Tobacco Company Limited (a co-noticee) regarding the return of non-relied upon documents and the right to cross-examine witnesses, to the present petitioners, despite similar show cause notices being issued? 2. Whether the impugned order, passed without providing the petitioners with copies of all non-relied upon documents and denying them the opportunity to cross-examine witnesses, is violative of the principles of natural justice? Petitioner's Arguments: The petitioners argued that the impugned order was arbitrary and legally untenable because the adjudicating authority failed to follow the directions issued by the High Court in the case of M/s Elora Tobacco Company Limited, which had been upheld by the Supreme Court. They contended that the principles of natural justice, including the right to access relevant documents and cross-examine witnesses, were violated. They asserted that a quasi-judicial authority must adhere to judicial discipline and follow precedents set by the High Court, even if the order was initially passed in personam for one noticee. Revenue's Arguments: The revenue contended that the order passed in the case of Elora Tobacco was a judgment 'in personam' and not 'in rem', and therefore, not binding on other noticees. They argued that the petitioners had not appeared before the authority or made specific applications for the return of documents or cross-examination in WP No. 17609/2025.