Natural justice in GST adjudication requires cross-examination when adverse findings rest on third-party statements.

Where an adverse GST adjudication materially relied on third-party statements, a real opportunity to cross-examine those witnesses was required to satisfy natural justice. The available statutory appeal did not prevent writ intervention because the complaint was breach of natural justice and the appellate authority could not remand. Refusal to permit cross-examination, despite repeated requests, was impermissible where the statements formed the basis of adverse findings; the authority could not assume in advance that cross-examination would not affect their evidentiary value. The penalty order was therefore set aside and the matter remitted for fresh adjudication after granting cross-examination.

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Issues: Whether the impugned penalty order was liable to be interfered with under Article 226 of the Constitution of India for denial of cross-examination of third-party witnesses whose statements were relied upon in adjudication.

Analysis: The available statutory appeal did not bar writ intervention where the complaint was a breach of natural justice, since the appellate authority under section 107(11) of the GST enactments could not remand the matter. The adjudication relied on statements of about 20 persons, but the petitioner's repeated requests for cross-examination were refused. Cross-examination was treated as a necessary means to test the credibility and veracity of third-party statements when such statements form the basis of adverse findings. The adjudicating authority's assumption that cross-examination would not affect the evidentiary value of those statements was held to be impermissible, because it prejudged the matter and denied a fair opportunity of defence.

Conclusion: The refusal to permit cross-examination amounted to violation of the principles of natural justice, and the impugned order could not stand.

Final Conclusion: The order of penalty was set aside and the matter was sent back for fresh adjudication after granting cross-examination and proceeding in accordance with law.

Ratio Decidendi: Where adverse adjudication under the GST law rests materially on third-party statements, fairness requires a real opportunity to cross-examine those witnesses unless such opportunity is genuinely impracticable or unavailable, and denial of that opportunity vitiates the order for breach of natural justice.

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