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TMI Blog2010 (4) TMI 850X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1985. The appellant was clearing the goods at its factory gate situated at Shapur village in Shamshabad Mandal, Ranga Reddy District, Andhra Pradesh. 2. On 15-5-1997, the officials of the Commissionerate of Customs and Central Excise, Hyderabad have undertaken search operations at the factory premises, the registered office, godowns, the residence of the Managing Director of the company as well as other business premises and residences of various dealers of the appellant company. Several irregularities were said to have been committed such as inaccurately maintained books of account, resulting in shortage/excess of finished products and clearing of the material without payment of duty. On the very same day, a truck carrying the finished goods manufactured by the appellant was intercepted and it was found carrying excess goods which did not suffer the duty. It was further noticed that only the original copy of the invoice accompanied these goods instead of the duplicate. The goods in the godowns of the appellant were valued at Rs. 9,86,343/- and they were detained. It is further asserted that the search at the registered office resulted in recovery of certain private record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant company has been so shabbily dealt with that he has been virtually paraded naked and hence Sri Gopal Gupta, came under tremendous pressure to give suitable statement as desired by the inspecting officials. It was further pleaded that statements of Sri Bhavani Kishore, the Accountant of the appellant has been obtained after subjecting him to tactics of intimidation and that when the appellant sought to cross-examine both Sri Gopal Gupta and Sri Bhavani Kishore, they were denied the right of cross-examination. It was specifically asserted that Sri Gopal Gupta has clearly resiled from his earlier statement through a sworn affidavit and in fact the apparent contradictions from various parts of the statement of Sri Gopal Gupta when properly construed and considered, would knock down .the theory propounded that the manufacturing capacity of the appellant is 4.5 lakhs linen Mts/month whereas the same Gopal Gupta has clearly mentioned that the installed capacity of the machinery to be 7000 linen Mts/day, which works out to a maximum of 2.1 lakh linen Mts/month, but not 4.5 lakh linen Mts as concluded by the respondents. Hence, the entire calculations indulged in for arriving at the du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntended that when a statement has been retracted, it is fundamental that the person who made the original statement must necessarily be exposed to cross-examination. Only when such an opportunity is provided, it would be a fair and reasonable one. Any failure to make available the authors of such statements for cross-examination amounts to denial of fair and reasonable opportunity to establish the case of the appellant and consequently the principles of natural justice are violated. Learned Senior Counsel has also pointed out that the allegations of duty evasion are not sustainable in the absence of supporting material in the form of man power deployment data, procurement data of the raw material, electric energy consumption and payments made for transportation of the finished goods etc. Learned Senior Counsel has placed strong reliance upon the judgments rendered by this court in Padmavathi Paddy and Rice Co. v. Assistant Commissioner of Commercial Taxes, Anantapur and Another [1971] XXVII STC 30 and Machilipatnam Central Consumers Cooperative Stores Limited v. Commissioner of Commercial Taxes, Hyderabad [1998] Vol. 71 STC 153. In Padmavathi Paddy and Rice Co. case (supra), it has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcial Tax Officer should have done in this case was to confront the assessee with the statements recorded from the persons on whom reliance was placed, tender those persons for the cross-examination of the assessee and based on such evidence arrive at a proper conclusion." 7. Per contra, Sri Appayya Sarma, learned counsel would submit that the findings of fact recorded by the adjudicating authority as confirmed by the Tribunal, are not liable to be reagitated before this court. Learned counsel would submit that after an elaborate investigation, lot of material has been gathered and the same was also furnished to the appellant and thereafter the proceedings have been concluded. Sri Bhavani Kishore, was an Accountant of the appellant company. He furnished the key inputs relating to the modus operandi of duty evasion resorted to by the appellant. Therefore, the statements of Sri Gopal Gupta and Sri Bhavani Kishore are in the nature of information for the investigating agency. The statement of Bhavani Kishore alone did not form the basis. The information contained in the said statements has been verified which led to further investigation and detections based upon which, the find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raphs of the appellants were mixed up with 20 photographs of other students and the girls 'by and large' identified the appellants. The appellants were then called upon by the Committee and they were told about the charges against them. The appellants denied the charges and stated that they had never left their hostel. The Committee found the appellants guilty and finally they were expelled from the medical college. 11. The said order was challenged by the appellants as violative of the principles of natural justice inasmuch as the statements of the girl students were recorded behind their back and that no opportunity was given to them to cross-examine those girl students. The Supreme Court rejected these contentions. According to the Court "the girls would not have ventured to make their statements in the presence of the miscreants because if they did, they would have most certainly exposed themselves to retaliation and harassment thereafter. The college authorities are in no position to protect the girl students outside the college precincts." 12. In State of Kerala v. K.T. Shaduli Grocery Dealer, AIR 1977 SC 1627, the assessment of the assessee to sales tax for certa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of natural justice which have been from time to time used, but, whatever standard is adopted, one essential is that the person concerned should have a reasonable opportunity of presenting his case." (3) One of the rules which constitutes a part of the principles of natural justice is the rule of audi alteram partem which requires that no man should be condemned unheard. It is indeed a requirement of the duty to act fairly which lies on all quasi judicial authorities..... xxxxxxxxxxxxxxxxx (4) xxxxxxxxxxxxx The question debated before us was whether this opportunity of being heard granted under the first part of the proviso included an opportunity to cross-examine Hazi Usmankutty and other wholesale dealers on the basis of whose books of accounts the Sales Tax Officer disbelieved the account of the assessee and came to the finding that the return submitted by the assessee were incorrect and incomplete. (5) The opportunity to prove the correctness or completeness of the return would, therefore, necessarily carry with it the right to examine witnesses and that would include equally the right to cross-examine witnesses examined by the Sales Tax Officer. Here, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he receipt of this amount as 'n. B. Bani' had left the service of the assessee long back and a grievance was made that it was not known as to who was the person who was supposed to have made the remittance on behalf of the assessee, because in the absence of this information, it was not possible for the assessee to meet the case of the Revenue. The Supreme Court in this regard has held as under: ".....It is true that the 'proceedings under the income tax law are not governed by the strict rules of evidence and therefore it might be said that even without calling the manager of the bank in evidence to prove this letter, it could be taken into account as evidence. But before the income tax authorities could rely upon it, they were bound to produce it before the assessee so that the assessee could, controvert the statements contained in it by asking for an opportunity to cross-examine the manager of the bank with reference to the statements made by him......" 14. In K.L. Tripathi v. State Bank of India - AIR 1984 SC 273, the Supreme Court has held as under : .........whether a particular principle of natural justice has been violated or not has to be judged in the background o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject-matter to be dealt with, and so forth. (32) THE basic concept is fair play in action administrative, judicial or quasi judicial. The concept of 'fair play in action' must depend upon the particular lis, if there be any, between the parties. If the credibility of a person who has testified or given some information is in doubt, or if the version or the statement of the person who has testified, is, in dispute right of cross-examination must inevitably form part of fair play in action but where there is no lis regarding the facts but certain explanation of the circumstances there is no requirement of cross-examination to be fulfilled to justify fair play in action. When on the question of facts there was no dispute, no real prejudice has been caused to party aggrieved by an order, by absence of any formal opportunity of cross-examination per se does not invalidate or vitiate the decision arrived at fairly. This is more so when the party against whom an order has been passed does not dispute the facts and does not demand to test the veracity of the version of the credibili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iry ought not to have been concluded. Therefore, we have no hesitation to hold that not making available Sri Gopal Gupta for cross-examination amounts to denying a fair and reasonable opportunity to the appellant to defend itself against the allegation of duty evasion. 16. But, at the same time, there is merit in the contention canvassed by Sri Appayya Sarma, learned counsel for the respondent that in not making available Sri Bhavani Kishore, the Accountant of the appellant company as his whereabouts are not traced, no prejudice is caused to the appellant, inasmuch as, the clues furnished by Sri Bhavani Kishore have been got verified and the corroborative material gathered has been made available to the appellant. In these set of circumstances, it will not be possible for the department to make available Sri Bhavani Kishore for cross-examination. It is therefore for the appellant company to show to the satisfaction of the respondents as to how the statement made Sri Bhavani Kishore is not trustworthy and not reliable. The fact that Sri Bhavani Kishore is not traceable has not been put in issue at all by the appellant company. Therefore not making available Sri Bhavani Kishore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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