THANGAPANDI SELVARAJ v. ENFORCEMENT OFFICER ENFORCEMENT SQUAD NO. 1, KERALA STATE GOODS AND TAXES DEPARTMENT

Introduction

This judgment reinforces the principle that where the tax authorities rely upon statements of third parties while issuing a show cause notice, the affected taxpayer has a fundamental right to cross-examine those persons. The Kerala High Court held that denial of such an opportunity violates the principles of natural justice embodied in Section 75(4) of the CGST Act. Relying upon its earlier decision in Nishad K.U. v. Joint Commissioner, Central Tax and Central Excise, the Court directed the department to permit cross-examination before proceeding further with adjudication.

Background of the Case

The petitioner was engaged in the wholesale trade of aluminium, copper, and brass scrap under the name Blue Star Traders and was a registered taxpayer under the CGST/KSGST Act.