TaxTMI 
TaxTMI 
2025 (11) TMI 1104
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.... 4, 7, 8 of the Act of 1999 read with Notification No.GSR/397(E) dated 03.05.2000. It was for illegal dealings in foreign exchange viz acquisition/purchase of foreign exchange worth of US$ 5,30,222/- equivalent to Rs. 2,41,47,790/- and for failure to realize export dues equivalent to Rs. 2,41,47,790/-. The appellant herein submitted short reply to the Show Cause Notice and then prayed for permission to cross-examine the Investigating Officer, holder of the Passport, bank employees and further cross- examination of other officers in later stage so that the effective reply can be prepared. The cross-examination was thus prayed before filing detailed reply. It was coupled with the demand of documents other than supplied to the appellant as was relied in the Show Cause Notice. The application aforesaid was not accepted by the Special Director and, therefore, the appeal has been preferred to challenge the order. 3. The learned counsel for the appellant submitted that a fair opportunity to defend the case has been denied by the Special Director by denying cross-examination of the witnesses and even supply of the documents demanded by the appellant. In absence of it, the appellant woul....
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....o seek their cross-examination. 9. The way application has been filed shows it to be nothing but to delay the proceedings and that too without filing reply to the Show Cause Notice thus the application was even premature for the aforesaid. The application refers to the cross-examination of holder of the Passport, bank employees and other officers without specifying the name of the holder of the passport, name of the bank employees and name of other officers to seek cross- examination. Thus, apart from the fact that no reason to seek cross-examination has been given, it was otherwise without naming the person of whose cross-examination has been sought. 10. The Special Director otherwise found it to be a case based on documents thus denied the cross-examination. In the facts and circumstances, we do not find any illegality in denying the cross- examination of the person not even named in the application. The learned counsel for the appellant has referred to the judgment of the Delhi High Court in the case of Shahid Balwa (supra). As against the aforesaid, the learned counsel for the respondents referred to the judgment of the Apex Court in the case of Telestar Travels Pvt. Ltd.....
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....usal of the Adjudicating Authority to permit cross examination of the witnesses producing the documents cannot even on the principles of Evidence Act be found fault with. At any rate, the disclosure of the documents to the Appellants and the opportunity given to them to rebut and explain the same was a substantial compliance with the principles of natural justice. That being so, there was and could be no prejudice to the Appellants nor was any demonstrated by the Appellants before us or before the Courts below. The third limb of the case of the Appellants also in that view fails and is rejected." The respondent also cited the judgment of High Court of Delhi in the case of Vallabh Textiles Vs. Additional Commissioner Central Tax GST, Delhi East and Ors. reported in MANU/DE/2820/2025. The relevant paragraph is reproduced below: "16. The rationale behind setting aside an order/judgment on the grounds of non-provision of the right to cross- examine is to safeguard the affected party from being prejudiced due to non-providing of cross examination. Therefore, such reasoning presumes/implies the existence of prejudice. In other words, if the alleging party fails to prove any s....
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....swer to that question would depend upon the facts and circumstances of each case." 17. In the present case, the request to cross-examine certain witness statements was rejected, as mentioned above, on the grounds that the statements in question were only corroborative of undisputed documentary evidence already on record, and thus, did not warrant cross-examination. The Supreme Court in Telestar Travels (Supra) while, in fact, dealing with similar circumstances has observed as under: "28. Coming to the case at hand, the adjudicating authority has mainly relied upon the statements of the appellants and the documents seized in the course of the search of their premises. But, there is no dispute that apart from what was seized from the business premises of the appellants, the adjudicating authority also placed reliance upon the documents produced by Miss Anita Chotrani and Mr. Raut. These documents were, it is admitted, disclosed to the appellants who were permitted to inspect the same. The production of the documents duly confronted to the appellants was in the nature of production in terms of Section 139 of the Evidence Act, where the witness producing the documents....
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....he relevant portion of the decision reads as under: "15. Accordingly, this Court is of the opinion that in order to ensure that there is compliance of Section 138(B) of the Act, though the same cannot be claimed as an unfettered right in all cases, in the facts of the present case, both Mr. Sushil Aggarwal and Mr. Aidasani are afforded an opportunity to cross examine Mr. Bhalla." 16. The rationale behind setting aside an order/judgment on the grounds of non-provision of the right to cross-examine is to safeguard the affected party from being prejudiced due to non-providing of cross examination. Therefore, such reasoning presumes/implies the existence of prejudice. In other words, if the alleging party fails to prove any substantial prejudice caused to it due to such non- provision, it shall not have the inherent right to set aside such an order/judgment. This view has been upheld by the Supreme Court in various judgments including M/s. Telestar Travels Pvt. Ltd. v Special Director Of Enforcement MANU/SC/0154/2013: 2013:INSC:98 : 2013(9) SCC 549. ................. The question, however, is whether failure to permit the party to cross-examine has r....
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....ents were sought which were specified at Item Nos. 2 to 5 of the application leaving Item No. 1 said to have been served. The document at Item No.2 is report of RBI and reply submitted by Shri Arvind Godbole on 19.01.2005. The appellant could not clarify the significance of the documents to the case. The allegation against the appellant was for illegal dealings in foreign exchange viz acquisition/purchase of foreign exchange worth of US$ 5,30,222/- and for failure to realize export dues. If the appellant had realized the entire export dues, he could have submitted the document along with the reply but why report of RBI is required could not be clarified. It is even for illegal dealing in foreign exchange. The other document sought at Item No. 3 was photo copy of the shipping bills and copies of BRC's. The documents aforesaid were available with the appellant but said to have been seized and thus were demanded. It could not be clarified as to how those documents would be necessary to rebut the allegations because the appellant has not denied export so as to deny even recovery of its dues. Therefore, the documents referred to above are irrelevant and have been sought only to de....