M/S Vinayaka Filtrade PVT.LTD. Through Its Director Mr. Ramesh Parihar vs. Union Of INDIA

Held

The Court held that the reasoning of the respondent that the order in the case of Elora Tobacco was only 'in personam' and not applicable to other noticees was not acceptable. The Court emphasized the doctrine of judicial discipline and prosperity, stating that once the High Court had granted relief regarding the opportunity for cross-examination and return of documents to one noticee, the quasi-judicial authority ought to have followed the same for other noticees facing similar circumstances. The Court found the adjudicating authority's denial of these rights to be a facet of the principle of natural justice. Consequently, the impugned order was quashed, and the matters were remanded back to the adjudicating authority. The respondents were directed to hand over all unrelied documents to the petitioners, who would then have 30 days to file a fresh reply. The authority was to adjudicate afresh on merits after considering the reply and affording a hearing, including the right to cross-examine witnesses. For WP No. 17609/2025, the petition was dismissed as the petitioner did not appear before the authority or make any applications for documents or cross-examination.

Facts

The petitioners, including M/s. Dabang Dunia Publications Private Limited, challenged orders-in-original passed by the Joint Commissioner, Central GST and Excise, confirming demands of GST and Compensation Cess. The petitioners contended that these orders were passed in violation of natural justice, specifically by denying them adequate opportunity to defend their cases. The allegations stemmed from a show cause notice alleging tax evasion and facilitation of money laundering through inflated newspaper circulation figures and fictitious advertisement invoices, linked to M/s. Elora Tobacco. The petitioners argued they were denied access to non-relied upon documents and the right to cross-examine witnesses, despite similar reliefs being granted to M/s. Elora Tobacco in a prior writ petition.

Key Issues

1. Whether the impugned order-in-original, confirming GST and Compensation Cess demands against the petitioner, is liable to be quashed for violating principles of natural justice by denying the petitioner adequate opportunity to defend its case, specifically regarding access to non-relied upon documents and the right to cross-examine witnesses, contrary to the principles of judicial discipline and prosperity? (Section 74 of CGST Act, 2017) Petitioner's Contention: The petitioner argued that the adjudicating authority acted arbitrarily by denying them the right to cross-examine witnesses and access non-relied upon documents, despite a prior High Court order in the case of M/s. Elora Tobacco Company Limited granting similar reliefs. They contended that the authority should have followed this precedent, citing the doctrine of judicial discipline and prosperity. They also argued that the adjudication concluded without a final determination against the principal noticee, M/s. Elora Tobacco. Revenue's Contention: The respondent argued that the order passed in the case of M/s. Elora Tobacco was a judgment 'in personam' and not 'in rem', and therefore, not binding on the present petitioners. They relied on jurisprudence concerning rights in rem and in personam.