Emas Gold And Diamonds Llp vs The Joint Commissioner on 8 July, 2026

July 26, 2026

Kerala High Court

Emas Gold And Diamonds Llp vs The Joint Commissioner on 8 July, 2026

                                                       2026:KER:50129

               IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                PRESENT

              THE HONOURABLE MR.JUSTICE ZIYAD RAHMAN A.A.

        WEDNESDAY, THE 8TH DAY OF JULY 2026 / 17TH ASHADHA, 1948

                        WP(C) NO. 19986 OF 2021

PETITIONERS:

    1        EMAS GOLD AND DIAMONDS LLP
             2ND FLOOR, KASCO PLAZA,
             RAM MOHAN ROAD, KOZHIKODE 673 004,
             REP.BY ITS DESIGNATED PARTNER AND CHAIRMAN BASHEER
             K.P.

    2        SHRI. BASHEER K.P.
             AMAN HOUSE, NEDDUNKANDATHIL, CHUNDAPPURAM,
             KODUVALLY P.O., KOZHIKODE 673 572
             (DESIGNATED PARTNER AND CHAIRMAN
             M/S. EMAS GOLD AND DIAMONDS LLP)

    3        SHRI. ANWAR P.V.
             PARAPARAMBIL VELLANGOT HOUSE, THALAKKADATHOOR PO,
             TIRUR, MALAPPURAM 676 103,
             (DESIGNATED PARTNER AND MANAGING PARTNER,
             M/S. EMAS GOLD AND DIAMONDS LLP)


             BY ADVS.
             SRI.K.SRIKUMAR (SR.)
             SMT.AMMU CHARLES
             SRI.K.MANOJ CHANDRAN


RESPONDENTS:

    1        THE JOINT COMMISSIONER
             OFFICE OF THE JOINT COMMISSIONER,
             CENTRAL GST AND CENTRAL EXCISE,
             C.R.BUILDING, MANANCHIRA, KOZHIKODE 673 001
                                             2026:KER:50129
WP(C) NO. 19986 OF 2021

                             2


 *ADDL.2    JOINT DIRECTOR,
            DIRECTORATE GENERAL OF GST INTELLIGENCE,
            OFFICE OF THE ADDITIONAL DIRECTOR GENERAL,
            KOCHI ZONAL UNIT, CENTRAL EXCISE BHAVAN,
            KATHRIKADAVU, KALOOR P.O., KOCHI-682 017

            *IS SUO MOTU IMPLEADED AS THE ADDITIONAL 2ND
            RESPONDENT IN THE WRIT PETITION AS PER ORDER
            DATED 08.07.2026.

           BY ADV SREELAL N. WARRIER, SC, CENTRAL BOARD
           OF EXCISE

     THIS WRIT PETITION (CIVIL) HAVING COME UP            FOR
ADMISSION ON 08.07.2026, THE COURT ON THE SAME            DAY
DELIVERED THE FOLLOWING:
                                                     2026:KER:50129
WP(C) NO. 19986 OF 2021

                                  3



                            JUDGMENT

This writ petition is submitted by the petitioners, challenging

Ext.P4 order passed by the 1st respondent under Sec.74 as well as

other documents as well.

6. Apart from the above, in Ext.P4, it is also stated that,

the persons whose cross-examination was sought, are the employees

of the 1st petitioner and hence, an apprehension was voiced by the

adjudicating officer that, by passage of time they might have been

influenced by the petitioners. Thus, it was opined in Ext.P4 that, if

an opportunity of cross-examination is permitted, that would be

biased and skewed in favour of the 1 st petitioner and therefore,
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WP(C) NO. 19986 OF 2021

would not be in the interest of natural justice. An adverse inference

was also drawn from the fact that, the cross-examination has been

specifically sought only for those persons, who are employees and

partners and not of any third parties like dealers, software supplier

etc. whose statements have been relied on in SCN. It is pointed out

that, none of the reasons cited by the 1st respondent in Ext.P4, are

sustainable in view of the fact that, those are not at all relevant for

consideration. According to the learned Senior Counsel, if the

statements of the said witnesses are being relied on, the 1 st petitioner

will have to be provided with an opportunity to cross-examination if

asked for, since the same form part of the principles of natural

justice. The learned Counsel places reliance upon the judgment

rendered by the Hon’ble Supreme Court in Andaman Timber

Industries v. Commissioner of Central Excise, Kolkata-II [2016

(15) SCC 785], the decision rendered by the Gujarat High Court in
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WP(C) NO. 19986 OF 2021

Commissioner of Central Excise v. Gujarat Cypromet Ltd.

[LAWS(GJH)-2013-3-383], the decision rendered by the High

Court of Calcutta in Sampad Narayan Mukherjee v. Union Of

India And Ors [LAWS(CAL)-2019-2-4] and the decision rendered

by the Rajasthan High Court in Shree Parvati Metals, Through

Surendra Chauhan Proprietor v. Union Of India Through

Commissioner Of Central Excise, NCRB, Customs, Central

Excise And Service Tax Appellate Tribunal [2018 (1) TMI 208].

7. On the other hand, the learned Standing Counsel for the

respondents vehemently opposes the said contentions, by pointing

out that, the 1st petitioner does not have any absolute right to get an

opportunity to cross-examine all the witnesses. According to him,

the power is vested upon the adjudicating authority to decide the

question whether such cross-examination is necessary or not, and in

this case, that power was properly exercised by providing proper
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WP(C) NO. 19986 OF 2021

reason in Ext.P4. It is also pointed out that, in Ext.P4 itself, it is

specified that, apart from the statements of the witnesses whose

cross-examination is sought by the 1st petitioner, there are other

evidence, which would amply prove the charges against the 1 st

petitioner and therefore, the denial of the cross-examination of the

said persons by itself, cannot be a reason to interfere in Ext.P4

order. Apart from the above, it is also pointed out that, as far as the

challenge raised against Ext.P4 is concerned, the same basically

arises from disputed questions of fact and since there is an effective

appellate remedy provided against Ext.P4, this Court need not

invoke the jurisdiction under Article 226 of Constitution of India

and instead, it is for the petitioners to invoke the statutory remedies

before the appropriate forum to get the factual disputes, as referred

to above, resolved.

8. I have carefully gone through the records and
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considered the contentions raised from both sides. One of the

crucial contentions raised by the petitioners, is in relation to the

order passed for multiple assessment years, as a block period. In

ground (J) of the writ petition, a specific ground in this regard has

been taken, by stating that, the assessment should have been

completed based on the tax period as defined under Section 2(106)

of the CGST Act, instead of completing the assessment as a block

assessment for 2017-18, 2018-19 and 2019-20. As far as the said

question on concerned, this Court has specifically accepted the said

contention in Joint Commissioner (Intelligence & Enforcement) v.

M/s. Lakshmi Mobile Accessories [2025 KHC OnLine 149] and

Tharayil Medicals (M/s.), Thrissur v. Deputy Commissioner,

Thrissur [2025 KHC OnLine 467], where, it was observed that, a

composite notice for multiple assessment years while completing

the assessment under Section 74 of the CGST Act is not legally
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WP(C) NO. 19986 OF 2021

sustainable. Therefore, on that reason itself Ext.P4 is liable to be

interfered with.

9. Even while arriving at the said conclusion and by

holding that the matter is liable to be remanded for fresh

consideration by the respondent adjudicating authority, for

completeness, and in the interest of both the parties, this Court feels

that the question regarding the necessity to extend the opportunity

to cross-examine the witnesses is also to be answered. Otherwise,

the same question may again pop up in the next round of litigation.

Therefore, I am answering that question in this judgment.

10. While considering the aforesaid aspect, the crucial

element to be noticed is that, it is evident from Exts.P2 and P3 that,

the 1st petitioner had sought permission to cross-examine the

witnesses whose statements are relied on in the show cause notice.

It is the specific case of the petitioners that, such request was made
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in Ext.P2, as well as Ext.P3, much before issuance of Ext.P4.

However, instead of taking a decision on the same before

proceeding to adjudicate the question finally, the adjudicating

authority passed Ext.P4 order. Of course, in Ext.P4, the reason for

rejecting the request for cross-examination was cited, but, as rightly

pointed out by the petitioners, since the request made by the 1 st

petitioner for cross-examination was rejected only along with final

order passed as evidenced by Ext.P4, the petitioners were

compelled to challenge the same in a writ petition, instead of

invoking the appellate remedy. This is because, according to the

petitioners, the same amounts to violation of principles of natural

justice, as the 1st petitioner could not bring in all the defenses and

supporting materials in evidence, by examining/ cross-examining

the persons concerned, Therefore, according to the petitioner,

invoking the appellate remedy may not be effective.

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WP(C) NO. 19986 OF 2021

11. After carefully going through the records, I find some

merits in the said submission. This is particularly because, going by

the reasons in Ext.P4, for rejecting the request for cross-

examination of the witnesses mentioned in Ext.P4, those appear to

be not at all convincing. One of the reasons stated was that, the

persons, whose statements were relied on, have not retracted from

their statements. However, the question whether the witness

concerned has retracted from the statement or not, is not a relevant

criteria while determining the question as to whether, an

opportunity has to be granted for cross-examination or not. The

purpose of cross-examination is to test the veracity of the statement

of the witnesses and in order to do the same, the person seeking

cross-examination should get an opportunity to discredit the said

witnesses. The same can only be done by cross-examining such

persons. Therefore, even if the persons concerned have not
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retracted from the statements, that by itself would not preclude the

noticee against whom proceedings are initiated, from challenging

those statements, by attempting to discredit the said witness through

the cross examination. Therefore, that cannot be a reason justifiable

in law, to deny the same. Apart from the above, it is evident that,

all those statements were proposed to be relied on in Ext.P1 show

cause notice and going by the findings in Ext.P4, those statements

were indeed formed the basis of an opinion, which resulted in the

ultimate conclusion arrived at by the adjudicating authority. Thus,

the fact that those statements are relied on, is undisputed. Moreover,

the petitioners have a specific case that, all those statements were

recorded under compelling circumstances where, the Chairman of

the institution was under detention.

12. Moreover, the petitioners have a case that, the

statements of the employees were recorded, while the chairman was
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under detention. Therefore, this is all the more a good reason that

requires an opportunity to be provided to the 1 st petitioner to cross

examine the persons concerned. Observations made by the

Honourable Supreme Court in Andaman Timber Industries

(supra), which is relied on by the learned Senior Counsel for the

petitioners is also relevant in this regard. In paragraph Nos.6 and 7,

it was observed as follows:

“6. According to us, not allowing the assessee to cross-
examine the witnesses by the Adjudicating Authority
though the statements of those witnesses were made the
basis of the impugned order is a serious flaw which
makes the order nullity inasmuch as it amounted to
violation of principles of natural justice because of which
the assessee was adversely affected. It is to be borne in
mind that the order of the Commissioner was based upon
the statements given by the aforesaid two witnesses.
Even when the assessee disputed the correctness of the
statements and wanted to cross-examine, the
Adjudicating Authority did not grant this opportunity to
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18

the assessee. It would be pertinent to note that in the
impugned order passed by the Adjudicating Authority he
has specifically mentioned that such an opportunity was
sought by the assessee. However, no such opportunity
was granted and the aforesaid plea is not even dealt with
by the Adjudicating Authority. As far as the Tribunal is
concerned, we find that rejection of this plea is totally
untenable. The Tribunal has simply stated that cross-
examination of the said dealers could not have brought
out any material which would not be in possession of the
appellant themselves to explain as to why their ex-
factory prices remain static. It was not for the Tribunal to
have guess work as to for what purposes the appellant
wanted to cross-examine those dealers and what
extraction the appellant wanted from them.

7. As mentioned above, the appellant had contested
the truthfulness of the statements of these two witnesses
and wanted to discredit their testimony for which
purpose it wanted to avail the opportunity of cross-
examination. That apart, the Adjudicating Authority
simply relied upon the price list as maintained at the
depot to determine the price for the purpose of levy of
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WP(C) NO. 19986 OF 2021

19

excise duty. Whether the goods were, in fact, sold to the
said dealers/witnesses at the price which is mentioned in
the price list itself could be the subject matter of cross-
examination. Therefore, it was not for the Adjudicating
Authority to presuppose as to what could be the subject
matter of the cross-examination and make the remarks as
mentioned above. We may also point out that on an
earlier occasion when the matter came before this Court
in Civil Appeal No. 2216 of 2000, order dated
17.03.2005 was passed remitting the case back to the
Tribunal with the directions to decide the appeal on
merits giving its reasons for accepting or rejecting the
submissions.”

13. Similarly, the very same view has been followed in the

decisions rendered by the High Court of Gujarat, High Court of

Calcutta and the High Court of Rajasthan in Gujrat Cypromet Ltd

(supra), Sampad Narayan Mukarjee (supra) and Shree Parvati

Metals (supra) respectively. Of course, the learned Standing

Counsel for the respondents contended that, in Ext.P4, while citing
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WP(C) NO. 19986 OF 2021

the reasons for rejecting the request for cross-examination, it was

specifically observed that, apart from the statements of the

witnesses, whose cross-examination was sought for by the 1 st

petitioner, there are other evidence as well, which are sufficient to

make out the charges against the 1 st petitioner. On going through

the observations in this regard, as contained in Clause 12.11.5 of

Ext P4, it can be seen that, the 1st respondent has stated that, apart

from the statements of the persons whose cross-examination was

sought by the 1st petitioner, there are other evidence in the form of

documents recovered and submitted during the course of

investigation. However, on a careful reading of the observations

contained in the said paragraph, it is evident that, those

documents have been treated only as corroborative evidence, in

support of the statements recorded from the persons concerned

during the course of the enquiry. This indicates that, even while
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WP(C) NO. 19986 OF 2021

placing reliance on the contents of the documents recovered and

produced during the investigation, they have been regarded merely

as evidence corroborating the statements made by the persons

concerned. Thus, a clear link is established between the statements

of the persons concerned and the documents relied upon by the

respondents in the course of adjudication. This demonstrates that

the adjudicating authority did not assess the evidentiary value of the

documents independently. Instead, the documents were treated

merely as corroborative evidence, lending support to the statements

relied upon during the adjudication process. Thus, the contention of

the learned standing counsel that, the finding was based on other

evidence independently is not discernible from Ext.P4 order.

14. Moreover, as rightly pointed out by the learned Senior

Counsel, in the order itself, all the statements of those witnesses are

shown as relied upon documents. Thus, it is also one indication
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that, the statement of those witnesses were relied on and hence

cross-examination ought to have been granted. Moreover, in

Ext.P4, while rejecting the opportunity to cross-examine, the

respondents apprehended that, by providing cross-examination of

those individuals, no purpose would be served, as it would be

biased and skewed in favour of the first petitioner. However, such

an impression could not have been drawn, merely because of the

reason that the 1st petitioner is seeking a cross-examination of those

witnesses. The question as to whether the statement that is brought

out in cross-examination is biased or not, is a matter to be

considered, upon evaluating the statement that is elicited in such

cross-examination and under no circumstances, that cannot be a

ground to deny the opportunity to cross-examination as such. Of

course, it is true that in all cases, it is not necessary that the cross-

examination should be provided to the party concerned, merely
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because it was asked for. It is for the adjudicating authority to take

a reasonable decision as to whether it is to be granted or not. In

case, the opportunity is denied, sound reasons are to be provided for

denying the same. Therefore, I find that although the adjudicating

authorities are vested with the power to deny the request for cross-

examination in appropriate cases, on going through the reasons

stated in Ext.P4 order while denying opportunity to the 1 st

petitioner, I am not at all convinced that the same are justifiable and

sound. Therefore, to that extent an interference is required.

15. However, even while arriving at the said conclusion,

one aspect is to be noticed. On going through the materials placed

before this Court, it is evident that, some of the persons whose

cross-examination was sought, are co-noticees and were imposed

with penalty for aiding or abetting the first petitioner. As far as

those persons are concerned, under no circumstances, the 1st
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WP(C) NO. 19986 OF 2021

petitioner will have any right to seek cross-examination, as the same

would amount to asking such witnesses to depose against himself.

Therefore, right of the 1st petitioner to seek for cross-examination

would be confined to the persons who are not co-noticees in the

proceedings concerned. Thus, in the light of the aforesaid

discussions, I am of the view that, an interference is to be made in

the impugned order.

16. Another contention raised by the learned Senior counsel

is with regard to certain documents relied on in the process of

adjudication. The said documents are certain pocket diaries

maintained by some gold smiths attached to the 1 st petitioner. Even

though the names of those gold smiths were specifically referred to

in the adjudication order, according to the petitioners, the

statements of those witnesses were not recorded and in the absence

of any such statements, the contents of the said pocket diaries could
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WP(C) NO. 19986 OF 2021

not have been relied on. I find some merit in the said contention.

The document can be accepted into evidence or treated as a relevant

piece of evidence, only if the same is produced or proved by any of

the persons who authored the said documents or who were

responsible to maintain the said documents. Evidently, in this case,

none of these aspects are discernible from the discussion in Ext.P4

order and it is also not in dispute that the statements of the persons,

whose names are referred to as persons maintaining the such

documents (pocket diaries and such other documents), were not

recorded. Therefore, it shall be open to the petitioners to summon

those persons, if necessary.

In such circumstances, this writ petition is disposed of

quashing Ext.P4, with a direction to the respondents 1 and 2 to,

initiate fresh proceedings, after issuing separate notices to the

petitioners for separate assessment years and to finalize the same
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WP(C) NO. 19986 OF 2021

after giving the petitioners an opportunity for being heard. It is

further ordered that the 1st petitioner’s request for

examination/cross-examination of the witnesses, shall be considered

and the same shall not be rejected on the reasons mentioned in

Ext.P4. It is clarified that, since this writ petition was pending

consideration since 2021, the period from the date of issuance of

notice till the date of receipt of certified copy of this judgment, shall

be excluded while computing the period of completion of

proceedings. It is also clarified that, it shall be open for the

petitioners to move appropriate application seeking reliefs before

the adjudicating authority, in the light of the observations in this

judgment.

Sd/-

ZIYAD RAHMAN A.A.
JUDGE
SM/SCS/DG
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WP(C) NO. 19986 OF 2021

APPENDIX OF WP(C) NO. 19986 OF 2021

PETITIONER EXHIBITS

Exhibit P1 TRUE COPY OF THE SHOW CAUSE NOTICE
NO.17/2020 DATED 19.10.2020 ISSUED BY
THE JOINT DIRECTOR, DGGI
Exhibit P2 TRUE COPY OF THE REPLY TO SHOW CAUSE
NOTICE DATED 23.3.2021 SUBMITTED BY
THE 1ST PETITIONER
Exhibit P3 TRUE COPY OF THE ARGUMENT NOTE
SUBMITTED BY THE 1ST PETITIONER DATED
30.6.2021
Exhibit P4 TRUE COPY OF THE ORDER IN ORIGINAL
1/2021-22 GST DATED 12.8.2021
Exhibit P5 TRUE COPY OF THE INTERIM ORDER PASSED
BY IN W.P.(C) .12334 OF 2021 DATED
14.7.2021

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Emas Gold And Diamonds Llp vs The Joint Commissioner on 8 July, 2026

Kerala High Court