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Madhya Pradesh High Court Mandates Release of Non-Relied Documents in GST Case


In a recent decision[i], the Madhya Pradesh High Court (‘MPHC’) addressed procedural fairness in the context of Goods and Service Tax (‘GST’) and cess demands arising from alleged clandestine supplies of filter cigarettes. The MPHC ruled in favour of Elora Tobacco Co. Ltd. (‘Petitioner’), directing the revenue authorities to release non-relied documents, grant time for filing a reply, provide a personal hearing, and allow the cross-examination of witnesses. This ruling emphasized the principles of natural justice and the rights of the assessee in tax adjudication proceedings.

Brief Facts

  • The Petitioner faced substantial GST and cess demands for allegedly engaging in a clandestine supply of cigarettes without proper invoices and tax payments.

  • Show cause notices (‘SCN’) dated 08.06.2022 and 03.08.2022 were issued, demanding GST and cess totalling Rs. 19,462,273,010.

  • The Petitioner contended that crucial original copies of non-relied documents seized during the investigations were not provided, which hampered their ability to prepare a defence. Despite multiple requests through letters, the non-relied documents had not been furnished.

  • The Petitioner also sought the opportunity to cross-examine witnesses whose evidence was relied upon in the SCNs.

  • The Petitioner submitted that it was the Respondents' duty to release the non-relied documents within 30 days of issuing the SCN as per s. 67(3) of the Central GST Act, 2017 (‘CGST Act’) and Rule 27 of the Central Excise Rules, 2017 (‘Excise rules’).


The MPHC allowed the writ petition and mandated the release of original non-relied documents. It directed the revenue authorities to grant the Petitioner a period of 30 days to file a reply upon receiving these documents. It instructed for a personal hearing to be afforded to the Petitioner. The MPHC also allowed the liberty to cross-examine witnesses by filing an application at an appropriate stage of the proceedings.

 I.  Judgments referenced by the MPHC:

  • Methodex Systems Ltd. v. Union of India[ii]: This precedent established that non-relied documents must be returned to the assessee, reinforcing the principle that the department cannot withhold documents not relied upon in the SCN.

  • Andaman Timber Industries v. Commissioner of Central Excise[iii]: The Hon'ble Supreme Court ruled that not allowing cross-examination of witnesses relied upon in adjudication is a violation of natural justice, making the order null and void.

II.  Legal Basis for the Decision:

  • S. 67(3) of the CGST Act: Mandates that documents not relied upon in the issuance of an SCN must be returned to the assessee within 30 days.

  • R. 27 of the Excise Rules: Reinforces the obligation to return non-relied documents within the stipulated timeframe.

  • Principles of Natural Justice: The right to a fair hearing and cross-examination are fundamental to ensuring justice and fairness in legal proceedings.

Our Analysis

This decision significantly clarifies the necessity of transparency and procedural fairness in tax adjudication processes.

Importance of Document Disclosure:

The MPHC’s directive to release non-relied documents within 30 days is a pivotal step. This requirement aligns with statutory obligations and underscores the importance of providing the Assessee access to all relevant materials. This provision prevents the arbitrary confiscation of documents, which could otherwise handicap the Assessee in providing explanations to investigating agencies and fulfilling day-to-day obligations such as filing ITRs and clearing dues.

Right to Cross-Examination:

The MPHC’s affirmation of the right to cross-examine witnesses is a fundamental aspect of fair adjudication. It grants the Assessee the opportunity to challenge and verify the credibility of witness statements and safeguards against potential misuse of evidence. This enhanced the reliability and admissibility of evidence.

End Notes

[i]Elora Tobacco Co. Ltd. v. Union of India, 2024 SCC OnLine MP 3508

[ii] Methodex Systems Ltd. v. Union of India, 2000 SCC OnLine MP 568

[iii] Andaman Timber Industries v. CCE, (2016) 15 SCC 785

Authored by Priyavansh Kaushik, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinion.


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