2025 (7) TMI 1514 - HC - GST

Petition dismissed; petitioner advised to file appeal under Section 107 of GST Act for remedy

Sazid Ali Khan Versus Office Of Principal Commissioner, Central GST And Central Excise Commissionerate, Vadodara-I & Ors.

The HC dismissed the petition, holding that the petitioner has an alternative efficacious remedy by filing an appeal under Section 107 of the GST Act. The ... Maintainability of petition - availability of alternative efficacious remedy of appeal - sufficient opportunity of hearing is provided to the petitioner or not - violation of principles of natural justice - HELD THAT:- The petitioner has an alternative efficacious remedy to challenge the impugned order by preferring an Appeal under Section 107 of the GST Act as held by the Hon’ble Apex Court in case of The Assistant Commissioner of State Tax and Others Versus M/s. Commercial Steel Limited [2021 (9) TMI 480 - SUPREME COURT]. With regard to the contention raised on behalf of the petitioner that the petitioner has not been granted an opportunity of cross-examination of the persons who were named in the application dated 04.10.2024 is concerned, it is opined that out of the five persons, four belongs to the Department who have either issued the summons or arrest memo and therefore, such persons are not required to be cross-examined by the petitioner and therefore, the respondent No. 2 has rightly not granted the cross-examination of such Departmental Officers to the petitioner. So far as the contention of the petitioner that no opportunity of hearing was granted to the petitioner and petitioner was also prevented from filing any written submission and reply to the show-cause notice is concerned, it would be open for the petitioner to make the submissions before the Appellate Authority as the appeal proceedings are nothing but a continuation of the original proceedings. Thus, without expressing any opinion on merits, the petition is dismissed with a liberty to the petitioner to file statuary Appeal as provided under Section 107 of the GST Act in accordance with law. ISSUES: Whether the impugned Order-in-Original passed under the GST Act without granting opportunity of hearing and cross-examination violates principles of natural justice.Whether the petitioner is entitled to quash the show-cause notice issued under Section 74(1) of the CGST Act, 2017 and related provisions on the ground of lack of inquiry or harassment.Whether the petitioner has an alternative efficacious remedy under the GST Act to challenge the impugned order.Whether the petitioner was entitled to cross-examine departmental officers and other persons named in the application for cross-examination.Whether the adjudicating authority's refusal to allow cross-examination of departmental officers and non-appearance of the co-noticee for cross-examination justify interference with the impugned order.Whether the delay and failure of the petitioner or his advocate to appear at hearings justifies passing the impugned order without further adjournment. RULINGS / HOLDINGS: The impugned Order-in-Original was not passed in violation of principles of natural justice as sufficient opportunity of hearing was provided, and the petitioner failed to avail the opportunity to cross-examine witnesses despite repeated chances. The Court held that 'the respondent-authorities shall not cause any harassment' and the adjudication process must be completed within twelve weeks.The show-cause notice issued under Section 74(1) of the CGST Act, 2017 was not quashed as it was based on an investigation and the petitioner had alternative remedy by way of appeal under Section 107 of the GST Act. The Court dismissed the petition without expressing any opinion on merits.The petitioner has an alternative efficacious remedy under Section 107 of the GST Act to challenge the impugned order, and exercising jurisdiction under Article 227 of the Constitution is not appropriate in absence of exceptions such as breach of fundamental rights, violation of natural justice, excess of jurisdiction, or challenge to the vires of the statute.Cross-examination of departmental officers who issued summons or arrest memos is not required and refusal to allow such cross-examination does not violate natural justice. The only person qualifying for cross-examination was a co-noticee, Shri Vijay Kumar Jani, who failed to appear despite multiple summons and hearing notices.The refusal to grant cross-examination on the basis that the petitioner did not substantiate the request and the co-noticee's non-appearance renders the claim for cross-examination 'invalid and baseless,' and the adjudicating authority's order cannot be interfered with.The petitioner's failure to appear for hearings on two occasions and seek adjournments without sufficient cause justified the passing of the impugned order without further adjournment. RATIONALE: The Court applied the statutory framework under the Central Goods and Services Tax Act, 2017, particularly Sections 74(1), 50, 70, 75(4), and 107, and the corresponding provisions under the GGST and IGST Acts, as well as Rules 142(1A) of the CGST Rules, 2017.The Court relied on precedent from the Hon'ble Apex Court holding that an alternative statutory remedy under Section 107 precludes interference by writ jurisdiction except in exceptional cases involving breach of fundamental rights, natural justice violation, excess of jurisdiction, or vires challenge.The Court referred to binding precedent that the right to cross-examination is not absolute and may be denied on sound logic, particularly when documents are produced under Section 139 of the Evidence Act and witnesses producing such documents are not subject to cross-examination.The Court followed the principle that disclosure of documents and opportunity to rebut them constitutes substantial compliance with natural justice, citing the Apex Court's decision in Telstar Travels Pvt. Ltd. and others.The Court emphasized that non-appearance of the petitioner or co-noticee for cross-examination after repeated notices and opportunities negates any claim of denial of natural justice.The Court recognized the need to balance the petitioner's right to fair hearing with the necessity to avoid undue delay and harassment in the adjudication process.