The Gujarat High Court observed that non-granting of effective hearing is gross violation of natural justice.
The petitioner challenged the ex-parte order passed by the Commissioner Central GST and Central Excise, allegedly in gross violation of principles of natural justice without hearing the petitioners or its authorized representatives.
One of the petitioners – M/s Gyscoal Limited, is a company incorporated under Companies Act., for manufacture their final goods i.e. products of stainless Steel falling under Chapter 72 of Central Excise Tariff Act (CETA), the other petitioner i.e. Viral Shah is the Director of Gyscoal Ltd, Prakashsingh Solanki is the employee of Gyscoal Limited and Rest Petitioners i.e. Tvisha, Magna Vision and Superfine are the suppliers of raw material to the Gyscoal Ltd.
The entire Show Cause Notice is based on the Statements recorded under Section 14 of Central Excise Act and the impugned order has confirmed the demand qua M/s Gyscoal Limited on the basis of those statements which are not subjected to cross examination.
The opportunity of personal hearing was only granted during nationwide lockdown. The final hearing of show-cause notice dated did not take place and record of hearing giving reference to only final hearing of show cause notice was reverted for correction by the advocate of the petitioner, wherein it is stated that hearing took place of only one show cause notice.
The Bench of Sonia Gokani, aChief Justice (Designate) and Justice Sandeep N Bhatt, observed that “All the hearings were granted physical hearing that too during complete lockdown and last hearing was virtual hearing granted only to main noticee with respect to only one show cause notice and noticee had sent the correction in record of personal hearing, which is not taken on record.”
The Court also noted that at the time of issuance of notice, had referred to not granting of cross examination and pointed out that such action is violative of principles of natural justice. After hearing of petitioners, it was found by the Court that effective personal hearing was also not granted and therefore there is a complete denial of natural justice.
The Court concluded that non-granting of effective hearing itself is in gross violation of natural justice.
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