An order is invalid if a reasonable opportunity for cross-examination has been denied.

By | October 1, 2025
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An order is invalid if a reasonable opportunity for cross-examination has been denied.

Issue

Is an adjudication order legally valid if the taxpayer was not provided a “reasonable and effective opportunity” to cross-examine all the witnesses whose statements were relied upon by the tax department, including situations where a reasonable adjournment request was denied and key witnesses failed to appear?

Facts

  • The tax department, in its case against the petitioners, relied on the statements of several witnesses.
  • The petitioners made a formal request to cross-examine these witnesses. The authority permitted this and scheduled the cross-examination for a single day, January 23, 2025.
  • However, on the scheduled day, the process was deeply flawed:
    1. The petitioners’ main counsel, who was prepared to conduct the cross-examination, was unexpectedly unavailable. His emailed request for a short adjournment was declined by the authority.
    2. More importantly, only one of the several key witnesses whose statements were being relied upon was actually present. The other witnesses simply did not attend. One of these absent witnesses later confirmed he was abroad and offered to appear on a different date.
  • Despite these significant issues—the main counsel’s absence, the refused adjournment, and the non-appearance of most of the witnesses—the adjudicating authority went ahead, concluded the proceedings, and passed the final adverse orders against the petitioners.

Decision

The High Court ruled in favour of the assessee.

  • It held that the final orders were vitiated (rendered legally void) due to a clear breach of the principles of natural justice.
  • The court found that a “reasonable opportunity” for cross-examination had been unequivocally denied. This was evident from two key failures by the authority: its unreasonable refusal of a short adjournment and its failure to ensure the presence of all the witnesses whose statements it was relying upon to build its case.
  • The impugned orders were quashed, and the entire matter was remanded back to the authority with a clear direction to conduct a fresh hearing only after providing a proper and effective opportunity for the petitioners to cross-examine all the relevant witnesses.

Key Takeways

  • An “Opportunity” Must Be Reasonable and Effective: Simply fixing a date on paper for a cross-examination is not enough. The opportunity must be meaningful and effective. This includes considering reasonable requests for adjournment and ensuring that the witnesses whose statements are being used as evidence are actually made available for questioning.
  • The Right to Cross-Examine is a Substantive Right: The right to cross-examine a witness whose statement is used against you is a fundamental part of a fair hearing. It’s a substantive right, not a mere procedural formality. Denying this right in a meaningful way is a fatal flaw in the adjudication process.
  • Unreasonable Refusal of Adjournment: Arbitrarily declining a request for a short and justified adjournment, especially when the designated counsel is unavailable, is a classic example of denying a fair hearing and violates the principles of natural justice.
  • It’s the Department’s Responsibility to Produce its Witnesses: If the tax department wants to rely on a witness’s statement to prove its case, it is their responsibility to ensure that the witness is present for cross-examination when a request is made. They cannot proceed to pass an order if their own witnesses fail to appear and be tested.
HIGH COURT OF KERALA
Indiana Steel Corporation
v.
Joint Commissioner, CGST and Central Excise, Thiruvananthapuram
ZIYAD RAHMAN A.A., J.
WP (C) NOs. 22285, 22855 and 22867 OF 2025
AUGUST  12, 2025
Abhijith Harindran, Smt. Maria Ancy V.J., Smt. Sindhu M. and Smt. Jasna Kunniyullathil Ismail, Advs. for the Petitioner. V. Girishkumar and S. Jaikumar, SCs for the Respondent.
JUDGMENT
1. In all these cases, the respective petitioners are aggrieved by Ext.P15 Order in Original in all the cases, passed by the respondent herein. The challenge is raised by the petitioners by filing these writ petitions, instead of invoking the statutory remedy of appeal, on the ground that, the impugned orders were passed by the respondent without providing a proper opportunity to the petitioners to cross examine the witnesses and thereby, violating the principles of natural justice.
2. I have heard the learned counsel for the petitioner and the learned Standing Counsel for the respondent.
3. It is discernible from the records that, the specific contention raised by the learned counsel for the petitioner is that, even though, acting upon the request of the petitioner permission was granted to cross examine the witnesses, whose statement were relied by the respondents for completing the assessment, only one witness could be examined and adjournment sought at the instance of the counsel, for the petitioner for cross examining the other witnesses were declined. The cross examination was scheduled to be conducted on 23.01.2025, and on that day, only one witness was present, who was cross examined by the colleague of the counsel for the petitioner. This was so done, as the counsel who was supposed to cross examine the witnesses, could not be present on the said date, and the request made by him through email to adjourn the matter was declined. Other witnesses, whose statements were relied on by the respondents, were not present. Among the said witnesses, one witness expressed willingness to come 21.02.2025, due to the reason that, on 23.01.2025, he was abroad.
4. The case of the petitioner is that, without considering any of the requests of the learned counsel for the petitioner, and also that of the witnesses, the proceedings were concluded and the orders, which are produced as Ext.P15, in all these cases were passed.
5. On going through Ext.P15 orders passed, it is seen that, the proceedings were finalised and Ext.P15 orders were passed, after conducting hearing on 23.01.2025, without granting any further opportunity to the petitioners to cross examine the other witnesses, whose statements were relied on in Ext.P15. This was done, despite the fact that, the date on which the cross examination was scheduled, i.e., on 23.01.2025, only one witness turned up. Moreover, the willingness expressed by another witness to be present before the authority on yet another day, as the said witness was abroad on 23.01.2025, was also not seen considered. Thus, the opportunity offered to the petitioner to cross examine the witnesses, whose statements were relied in impugned proceedings, could not be availed by the petitioners, as the entire proceedings were culminated in the final order, before extending a reasonable opportunity to the petitioners.
6. In such circumstances, I am of the view that, an interference is required. While taking this view, I have taken into account the fact that, the proceedings were finalised without granting a reasonable opportunity to the petitioner to examine the said witnesses and the specific request made by the learned counsel for the petitioner, seeking a short adjournment of the matter due to personal inconvenience was also not considered. Thus, I am of the view that, an opportunity can be granted to the petitioners.
In such circumstances, these writ petitions are disposed of quashing the impugned orders which are produced as Ext.P15 in these writ petitions, with a direction to the respondent to reconsider the matter, by issuing fresh orders, after giving the petitioners a reasonable opportunity to cross examine the other witnesses and after hearing the petitioners.