{"id":6856,"date":"2025-11-18T17:38:10","date_gmt":"2025-11-18T12:08:10","guid":{"rendered":"https:\/\/www.centaxonline.com\/blog\/?p=6856"},"modified":"2025-11-18T17:38:10","modified_gmt":"2025-11-18T12:08:10","slug":"hc-quashes-gst-demand-for-denial-of-cross-examination-matter-remitted","status":"publish","type":"post","link":"https:\/\/www.centaxonline.com\/blog\/hc-quashes-gst-demand-for-denial-of-cross-examination-matter-remitted","title":{"rendered":"HC Quashes GST Demand for Denial of Cross-Examination | Matter Remitted"},"content":{"rendered":"<pre><strong>Case Details: <a href=\"https:\/\/www.centaxonline.com\/latest-news-updates\/gst\/101010000000408922\/gst-demand-quashed-as-assessee-denied-cross-examination-remitted-for-fresh-hearing-hc\">J.S.W. Steel Ltd. vs. Joint Commissioner of Central Tax and Central Excise, Bangalore (2025) 34 Centax 391 (Kar.)<\/a><\/strong><\/pre>\n<h2><em>Judiciary and Counsel Details<\/em><\/h2>\n<ul>\n<li><strong>S.R. Krishna Kumar<\/strong>, J.<\/li>\n<li><strong>S\/Shri V. Raghuraman<\/strong>, Senior Advocate for <strong>Raghavendra C.R.<\/strong>, Advocate, for the Petitioner.<\/li>\n<li><strong>Shri Madhukar M.D.<\/strong>, Advocate, for the Respondent.<\/li>\n<\/ul>\n<h2><em>Facts of the Case<\/em><\/h2>\n<p>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.<\/p>\n<h2><em>High Court Held<\/em><\/h2>\n<p>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.<\/p>\n<h2><em>List of Cases Cited<\/em><\/h2>\n<ul>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2015%20(324)%20E.L.T.%20641%20(S.C.)&amp;itemType=AP\">Andaman Timber Industries v. Commissioner<\/a> \u2014 2015 (324) E.L.T. 641 (S.C.) \u2014 Referred [Paras 4, 8, 10, 15, 16]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2017%20(358)%20E.L.T.%2087%20(Del.)&amp;itemType=AP\">Commissioner v. Balajee Perfumes<\/a> \u2014 2017 (358) E.L.T. 87 (Del.) \u2014 Referred [Paras 4, 12, 15]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2016%20(339)%20E.L.T.%20209&amp;itemType=AP\">G-Tech Industries v. Union of India<\/a> \u2014 2016 (339) E.L.T. 209 (P&amp;H) \u2014 Referred [Paras 4, 11, 15]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2025%20(97)%20G.S.T.L.%20223%20(Ker.)&amp;itemType=AP\">Joint Commissioner v. Nishad K.U.<\/a> \u2014 2025 (97) G.S.T.L. 223 (Ker.) = (2025) 28 Centax 270 (Ker.) \u2014 Referred [Paras 4, 14, 15]<\/li>\n<li>Mohammed Muzamil v. C.B.I. &amp; C. \u2014 W.P. No. 18081 of 2020, decided on 6-11-2020 by Telangana High Court \u2014 Referred [Paras 5, 8, 15, 16]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2025%20(95)%20G.S.T.L.%20196%20(Ker.)&amp;itemType=AP\">Nishad K.U. v. Joint Commissioner<\/a> \u2014 2025 (95) G.S.T.L. 196 (Ker.) = (2025) 27 Centax 48 (Ker.) \u2014 Referred [Paras 4, 13, 15]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=1997%20(89)%20E.L.T.%20646%20(S.C.)&amp;itemType=AP\">Surjeet Singh Chhabra v. Union of India<\/a> \u2014 1997 (89) E.L.T. 646 (S.C.) \u2014 Referred [Paras 5, 8, 15, 16]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2013%20(289)%20E.L.T.%203%20(S.C.)&amp;itemType=AP\">Telestar Travels Pvt. Ltd. v. Special Director of Enforcement<\/a> \u2014 2013 (289) E.L.T. 3 (S.C.) \u2014 Referred [Paras 5, 8, 15, 16]<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Case Details: J.S.W. Steel Ltd. vs. Joint Commissioner of Central Tax and&hellip;<\/p>\n","protected":false},"author":8,"featured_media":6868,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37,60,189],"tags":[],"class_list":["post-6856","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gst","category-news","category-gst-case-chronicles"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>HC Quashes GST Demand for Denial of Cross-Examination | Matter Remitted<\/title>\n<meta name=\"description\" content=\"HC rules GST demand unsustainable as assessee was denied cross-examination of third-party witnesses relied upon; order set aside and matter remanded for fresh hearing.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.centaxonline.com\/blog\/hc-quashes-gst-demand-for-denial-of-cross-examination-matter-remitted\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"HC Quashes GST Demand for Denial of Cross-Examination | Matter Remitted\" \/>\n<meta property=\"og:description\" content=\"HC rules GST demand unsustainable as assessee was denied cross-examination of third-party witnesses relied upon; 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