IMPORTANT POINT
The principles of natural justice, including the right to cross-examine witnesses, must be observed in adjudication proceedings under the CGST Act, 2017, rendering any violation void.

JUDGMENT :

Easwaran S., J.

To what extent does the Central Goods and Services Tax Act, 2017 permit reading in the principles of natural justice? The intra- court appeal preferred by respondents 1 to 4 in the writ petition challenging the judgment dated 17.12.2024 in WP(C)No.26732/2024 raises this seminal question of law.

2. The brief facts necessary for the disposal of the appeal are as follows:

The 1^st respondent was visited with proceedings under Section 74(9) of the Central Goods and Services Tax Act, 2017 (in short, ‘CGST Act’]. He was further visited with an order imposing a tax and penalty of more than Rs.9.40 Crores under the statutory provisions. Despite the availability of an alternate remedy, the 1^st respondent herein approached the writ court alleging a serious infraction of the principles of natural justice, insofar as there was a failure to accede to his request for cross-examination of persons, whose statements were obtained during the enquiry and which were relied upon by the authority while passing the order of penalty.

3. The appellants contended before the learned Single Judge that under the scheme of the CGST Act, there is no mandate for granting permission to cross-examine the witnesses whose statements were obtained by the proper officer in a proceedings for imposition of tax. However, the learned Single Judge, who considered the writ petition, took the view that the principles of natural justice had been violated since the authorities had denied the right to cross-examine the persons, who had given statements against the writ petitioner. While doing so, the learned Single Judge relied on the decision of the Hon’ble Supreme Court in Andaman Timber Industries v. Commissioner of Central Excise, Kolkata-II [(2016) 15 SCC 785].

4. In the appeal before us, the appellants would contend that the learned Single Judge went wrong in placing reliance on the decision of the Supreme Court in Andaman Timber Industries (supra), especially since the decision referred to above did not take into consideration a binding Three Judge Bench decision of the Supreme Court in Kanungo & Co. v. Collector of Customs, Calcutta and Others [1983 (13) ELT 1486 (SC)] and in Surjeet Singh Chhabra v. Union of India [1997 (89) ELT 646 (SC)]. It is the specific case of the appellants that there is no requirement in law to grant an opportunity to cross- examine witnesses.

5. Heard Sri.R.Harishankar, the learned counsel appearing for the appellants, and Sri.S.Jaikumar, the learned counsel appearing for the 1^st respondent/writ petitioner.

6. Sri.R.Harishankar, the learned counsel appearing for the appellants, vehemently pointed out that there is no requirement to follow the principles of natural justice in an adjudication proceedings, especially when the Act does not contemplate such an opportunity. The writ petitioner cannot insist, as a matter of right, that he should be granted an opportunity to cross-examine the witnesses, whose statements were obtained by the proper officer. He reiterated that although the learned Single Judge placed reliance on the decision of the Supreme Court in Andaman Timber Industries (supra), the Supreme Court had rendered the said judgment without referring to the binding three Judge Bench decision in Kanungo & Co (supra).

7. On the other hand, Sri.S.Jaikumar, the learned counsel appearing for the 1^st respondent/writ petitioner, would contend that even if there is no provision under the CGST Act that permits the cross-examination of persons, whose statements were relied on by the proper officer, the principles of natural justice have to be read into the said provision. Infraction of the said principle would vitiate the proceedings and, therefore, the writ petitioner was perfectly justified in approaching the writ court.

8. We have considered the rival submissions raised across the bar.

9. The question of maintainability of the writ petition, despite the existence of an alternate remedy, is no longer res integra. The Supreme Co