Madhya Pradesh High Court Holds Quasi-Judicial Authorities Must Follow Natural Justice and Judicial Discipline in GST Adjudication

Background and Context
The Madhya Pradesh High Court, in a batch of writ petitions led by Dabang Dunia Publications Pvt. Ltd., addressed the legality of a GST demand order passed by the Joint Commissioner, Central GST and Excise, Indore. The impugned order confirmed substantial GST and compensation cess demands against the petitioner without, as alleged, providing a proper opportunity to defend its case. The petitioner, a registered newspaper publisher, challenged the proceedings as violative of natural justice and contrary to binding judicial precedents.

Petitioner’s Grievances
The petitioner contended that the adjudication was based on third-party statements and documents seized during search operations, many of which were not relied upon in the show cause notice. Despite repeated requests, the authorities failed to provide copies of all non-relied upon documents and denied the petitioner the opportunity to cross-examine witnesses whose statements formed the basis of the allegations. The petitioner highlighted that in a similar case involving another noticee, M/s Elora Tobacco Company Ltd., the High Court had directed the return of unrelied documents and permitted cross-examination, a decision affirmed up to the Supreme Court.

Despite these judicial pronouncements, the same reliefs were not extended to the petitioner. The adjudicating authority rejected the requests, reasoning that the prior order applied only to the specific petitioner in that case and not to all noticees. The petitioner argued that this approach was arbitrary and contrary to the doctrine of natural justice.

Court’s Analysis and Reasoning
The High Court considered the preliminary objection regarding the availability of an alternative remedy of appeal. Citing Whirlpool Corporation v. Registrar of Trade Marks, the Court reiterated that writ jurisdiction can be exercised where there is a violation of natural justice, among other grounds.

The Court identified two key issues: (i) whether the order in respect of one noticee (Elora Tobacco) should apply to similarly situated noticees, and (ii) whether denial of cross-examination constituted a violation of natural justice. The Court rejected the respondents’ argument that the earlier order was a judgment in personam and not in rem, holding that the principle of judicial discipline required quasi-judicial authorities to follow binding directions on procedural fairness, especially where the factual and legal context was identical.

The Court emphasized that once the High Court had upheld the right to cross-examination and access to unrelied documents for one noticee in a common show cause notice, the adjudicating authority was unjustified in denying the same to others similarly placed. The Court underscored that such directions are facets of the principles of natural justice, which must be observed by all quasi-judicial authorities.

Decision and Directions
The Court allowed the writ petitions (except WP No. 17609/2025, where the petitioner had not sought similar reliefs before the authority), quashed the impugned order dated 05.02.2025, and remanded the matters to the adjudicating authority for fresh consideration. The respondents were directed to hand over all unrelied documents to the petitioners, who were granted liberty to file a fresh reply within 30 days. The adjudicating authority was instructed to adjudicate the cases on their merits after affording due opportunity of hearing, including the right to cross-examine witnesses at the appropriate stage.

The Court clarified that it had not expressed any opinion on the merits of the case. For the dismissed petition (WP No. 17609/2025), liberty was granted to pursue remedies available under the law.

Legal Principle
This decision reinforces the obligation of quasi-judicial authorities to adhere to the principles of natural justice and judicial discipline, particularly in tax adjudication proceedings involving multiple noticees arising from a common set of facts and legal issues. The ruling affirms that procedural safeguards such as access to unrelied documents and the right to cross-examination are not discretionary but are integral to fair adjudication.