Delhi High Court Upholds Denial Of Cross-Examination By GST Dept Citing Trader's Conduct, Say It's Not An 'Unfettered' Right

The Delhi High Court recently slammed a trader, allegedly involved in clandestine manufacture of pan masala to evade tax and recovery of ₹70 lakh from his premises, for his failure to cooperate in the probe.

A division bench of Justices Prathiba M. Singh and Shail Jain in this backdrop upheld the GST Department's order, denying the Petitioner-trader's right to cross-examination. It observed,

“the right to cross-examination is not an unfettered right…the non-filing of a reply to the SCN and the repeated adjournments which have been sought by the Petitioner…leaves no manner of doubt that the Petitioner has not co-operated with the Adjudicating Authority. The Petitioner's case, in the opinion of this Court, is prima facie not bona fide.”

The trader had approached the High Court challenging an order of the Directorate General of GST Intelligence, rejecting his plea for cross-examination of certain witnesses.

Briefly put, raids were conducted in 2016 at the factory premises and residence of the Petitioner, and various goods were seized along with cash of Rs.70,00,000/-.

Thereafter, the GST Department recorded statements of several witnesses. Two witnesses were examined by the Petitioner's counsel but he later sought permission to cross-examine a few more witnesses.

The said request was denied by DGGI, stating that the Petitioner had not provided any reason for cross-examining 19 individuals— all of whom are co-noticees in the case.

“Cross examinations are sought in a very casual manner without any justification or recording of reason for seeking the same. The relevance of cross-examining the witnesses is not mentioned,” DGGI recorded.

Petitioner however contended that there has been a serious infraction of the principles of natural justice.

Rejecting the plea, the High Court observed that after conducting the entire investigation and recording witness statements, the GST Department gave repeated notices to the Petitioner, including notices of personal hearing. However, no reply was filed and “after a long hiatus”, he sought to cross-examine some witnesses.

“Under such circumstances, this Court is of the opinion that since repeated notices of personal hearing have been given to the Petitioner, and that the Petitioner has merely sought repeated adjournments from the Adjudicating Authority, there cannot be said to be any violation of the principles of natural justice,” the Court said and dismissed the plea.

Appearance: Mr. Rachit Lakhmani & Mr. Arya Hardik, Advs. for Petitioner; Mr. Bhagvan Swarup Shukla, CGSC with Mr. Yash Baralia & Mr. Pradumn Kumar Singh, Advs. for UoI Mr. Satish Aggarwala, SSC for Respondents

Case title: Raj Kumar Gupta v. UoI

Citation: 2025 LiveLaw (Del) 1496

Case no.: W.P.(C) 15917/2025

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