Case Details: J.S.W. Steel Ltd. vs. Joint Commissioner of Central Tax and Central Excise, Bangalore (2025) 34 Centax 391 (Kar.)
Judiciary and Counsel Details
- S.R. Krishna Kumar, J.
- S/Shri V. Raghuraman, Senior Advocate for Raghavendra C.R., Advocate, for the Petitioner.
- Shri Madhukar M.D., Advocate, for the Respondent.
Facts of the Case
The Petitioner-assessee had entered into an MoU with a third-party entity for supply of various products, following which the jurisdictional authorities initiated investigation against both entities alleging evasion of GST. During investigation, statements of representatives of the Petitioner-assessee and representatives of the third-party entity were recorded, and the Petitioner-assessee contended that the Turnover Discount (TOD) amount was neither payable nor paid to the third party and that the interest amount was neither receivable nor received from it. A show cause notice was thereafter issued demanding GST, to which the Petitioner-assessee submitted a reply, followed by the issuance of a personal hearing notice. The Petitioner-assessee made a written request seeking examination/cross-examination of the representatives of the third party whose statements had been recorded, but the impugned order not only confirmed the GST demand but also rejected this request. The matter was accordingly placed before the High Court.
High Court Held
The High Court held that the statements of the third-party representatives had been recorded during investigation, were relevant and material, and had been relied upon in the impugned order for issuance of demand under Section 75 of the CGST Act and the Karnataka GST Act. The Court observed that denial of the opportunity to examine or cross-examine such witnesses would cause serious prejudice to the Petitioner-assessee and would violate principles of natural justice. It held that reliance upon third-party statements without providing cross-examination rendered the adjudication legally unsustainable. Accordingly, the Court set aside the impugned order and remitted the matter to the jurisdictional authorities for fresh consideration in accordance with law.
List of Cases Cited
- Andaman Timber Industries v. Commissioner — 2015 (324) E.L.T. 641 (S.C.) — Referred [Paras 4, 8, 10, 15, 16]
- Commissioner v. Balajee Perfumes — 2017 (358) E.L.T. 87 (Del.) — Referred [Paras 4, 12, 15]
- G-Tech Industries v. Union of India — 2016 (339) E.L.T. 209 (P&H) — Referred [Paras 4, 11, 15]
- Joint Commissioner v. Nishad K.U. — 2025 (97) G.S.T.L. 223 (Ker.) = (2025) 28 Centax 270 (Ker.) — Referred [Paras 4, 14, 15]
- Mohammed Muzamil v. C.B.I. & C. — W.P. No. 18081 of 2020, decided on 6-11-2020 by Telangana High Court — Referred [Paras 5, 8, 15, 16]
- Nishad K.U. v. Joint Commissioner — 2025 (95) G.S.T.L. 196 (Ker.) = (2025) 27 Centax 48 (Ker.) — Referred [Paras 4, 13, 15]
- Surjeet Singh Chhabra v. Union of India — 1997 (89) E.L.T. 646 (S.C.) — Referred [Paras 5, 8, 15, 16]
- Telestar Travels Pvt. Ltd. v. Special Director of Enforcement — 2013 (289) E.L.T. 3 (S.C.) — Referred [Paras 5, 8, 15, 16]
