Bombay High Court
G.T.C. Industries Ltd. vs Union Of India on 3 May, 1991
Equivalent citations: 1991ECR186(BOMBAY), 1991(56)ELT29(BOM)
Author: S.P. Bharucha
Bench: S.P. Bharucha
JUDGMENT Bharucha, J.
1. Leave to amend. Rule, returnable forthwith. Mr. Sethna waives service.
Heard.
2. The writ petition impugns the order of the 3rd respondent requiring the petitioners to pay Excise Duty in the sum of Rs. 50,33,21,605.25 and a personal penalty of Rs. 10,00,00,000/- within 10 days of the receipt of the order. The principal challenge is that the principles of natural justice have been violated.
By a letter dated 6th March 1991 addressed by the petitioners 'advocates to the 3rd respondent, cross-examination was demanded of 30 witnesses to test the veracity of statements made by them. The reasons for requiring the cross-examination were set out in detail, it was stated, in the reply to the show cause notice. It is the petitioners' case that at the hearing which took place on 6th March 1991 the 3rd respondent only heard submissions on the matter of summoning these witnesses for cross-examination and that no arguments on any other point, much less on the merits of the case, were heard on that day. The impugned order was passed on 5th April 1991 without any further hearing. In the order the 3rd respondent noted that the petitioners had requested the cross-examination of the 30 witnesses, the examination of their own witnesses, the production of documentary evidence in defence of their case and a personal hearing. The order stated that the case was not, primarily, based on the oral evidence of the witnesses whose cross-examination had been sought. A considerable number of documents recovered by the Income-tax and Excise authorities were before the 3rd respondent. Those documents spoke for themselves and could not be silenced by a general denial in the petitioners' reply, other letters and the personal hearing. The 3rd respondent commented upon the petitioners' "act of not exhaustively utilising the instrument of written reply to put forth their defence with sufficient force, and then asking for the leading of further evidence by way of cross examination of the Department's witnesses and examination of their own witnesses only tantamount to protracting the present proceedings with ulterior motives." Thus, the 3rd respondent found "that the cross examination of the witnesses now asked for are not required to be arranged for fulfilling any requirements of the concept of 'fair play'. Naturally, I also do not find any reason for giving opportunity to produce any of the party's own witnesses to lead any fresh evidence."
3. The order appears a travesty of the principles of natural justice. It may be that for good ground the 3rd respondent might have found reason to deny the petitioners the cross-examination of all or some of the 30 witnesses. But it did not and could not follow that the petitioners were to be denied the right to lead oral and documentary evidence in support of their case and a personal hearing in that behalf. There can be no question but that the impugned order must be set aside for breach of the principles of natural justice.
4. We are invited to set out some sort of a time schedule within which the authorities shall now proceed to hear and pass order upon the show cause notice issued to the petitioners. The 3rd respondent shall first have to pass an order stating whether or not he allows the petitioners to cross-examine the thirty witnesses mentioned by them. If he disallows the cross-examination of any of these witnesses, he shall have to set out the reasons for so doing. That order must be passed and communicated to the petitioners within three weeks from today.
5. The 3rd respondent shall permit the petitioners to cross-examine such witnesses as he allows them to do and to lead their own evidence, oral and documentary. It shall be open to him to conduct the proceedings from day-to-day and we have the undertaking of the petitioners, given to us by counsel, that they shall fully co-operate in this regard. After the examination and cross-examination of witnesses on either side is over, the 3rd respondent shall give to the parties a break of at least a week. He shall then hear arguments on either side. After the arguments have been heard, the 3rd respondent shall pass a fresh, reasoned order and, in doing so, shall not have regard to the order which we have set aside. It is expected that all this, including the communication of the fresh order to the petitioners, shall be completed within a period of eight months from today.
The order of the 3rd respondent, Ex. R to the petition, is quashed and set aside. The 3rd respondent shall now proceed in the matter of the show cause notice issued to the petitioners in the manner set out hereinabove.
6. Rule absolute accordingly.