Denial of cross examination is in violation of principles of natural justice – Calcutta High Court

The petitioner in the case of Sampad Narayan Mukherjee v. Union of India & Ors., W.P. No.25447 (W) of 2018 challenged an order-in-original confirming allegations raised in a show cause notice. The petitioner had replied to the said show cause notice and had also requested for cross-examination of witnesses whose statements were relied upon in the show cause notice.

Such witnesses being conversant with the facts of the case and the role of the petitioner, cross-examination of such witnesses was relevant and indispensable for the interest of the petitioner and for sake of justice. Despite making written requests, the adjudicating authority disallowed cross examination on the ground that evidence in adjudication under Customs Act need not be like the one in criminal cases and finding in adjudication is based on preponderance of probabilities.

The bench of Hon’ble Justice Debangsu Basak held that the decision of the adjudicating authority in not allowing the cross-examination of witnesses is wrong and that the impugned order therefore stands vitiated by breach of principles of natural justice.

The Ld. Bench accepted the submissions of the petitioner that the unanimous view of various High Courts of the country is so that, “a notice is entitled to a right of cross examination in an adjudication proceeding under the Act of 1962.”

In support of such submissions the Petitioner relied upon:  Basudev Garg v. Commissioner of Customs [2013 (294) ELT 353] (); HIM Logistics Pvt. Ltd. v. The Principal Commissioner of Customs [2016 (336) Excise Law Times 15]).

The Ld. Bench also rejected the submission on behalf of the Respondents wherein reliance was placed on M/S Kanungo & Company v. Collector of Customs & Ors. [1973(2) SCC 438] and Tapan Kumar Biswas v. Union of India (UOI) & Ors. [1996(63) ECR 546] that, “A noticee is not entitled to a right of cross-examination in adjudication proceedings.”

Rejecting the submissions of the Respondents the Ld. Bench held that the precedent of M/S Kanungo & Company (supra) is not applicable as the judgment was on the law of Sea Customs Act and the same were not pari materia to that of Act of 1962. The Ld. Bench rejected the reliance of respondents on Tapan Kumar Biswas (supra) on the grounds that the same was decided prior to introduction of S. 122A in the Act of 1962. Also, the placing reliance on New India Assurance Company Ltd. v. Nusli Neville Wadia & Anr. [2017 (3) WBLR (Cal) 386], the ld. Bench held that in the said judgment, the Hon‘ble Supreme Court recognises the right of cross examination of an opponent in a proceeding against himself. Such right is a part of the principles of natural justice. Following the same, the Bench stated that in view of the above, judgment in Tapan Kumar Biswas (supra) cannot be said to be good law.

In view of the above mentioned cases and also in view of the facts of the case, the impugned order in original was quashed as it stood in violation of the principles of natural justice.

As a result of the writ petition, the petitioner gained an opportunity for fresh adjudication wherein the petitioner’s right of cross examination shall be ensured and an adjudication, considering such cross examination shall be conducted.

The above judgment is important as it brings in and collates an important issue under Customs and Excise laws and principles of investigation in general which though was agreed upon at various forums but was not decided in such an elucidated and expansive manner.

 

Authored by:

Adv. Dipankar Majumdar

Co-Authored by:

Adv. Snigdha Tyagi

 

GST Law India is a blog on GST and allied commercial laws managed by members of the law firm ALA Legal.

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