Laxmi Narayan Gupta v. State Of U.P And 3 Others

What happened

The petitioner challenged an order of 30 June 2026 under section 74 of the SGST Act, 2017 read with section 8 of the GST (Compensation to States) Act, 2017 for 2021-22, made after an earlier order of the Court of 2 April 2026 had set aside orders of 26 December 2025 and 5 January 2026 for violation of section 75(7) and allowed a fresh reply, an application for documents and cross-examination, a hearing and a reasoned order by 30 June 2026. A fresh show-cause notice issued on 10 April 2026; the two panch witnesses were cross-examined on 15 May 2026 and, according to the petitioner, denied that the panchnama was filled in their presence and said they signed blank papers. The report of the search was furnished on 29 May 2026 and showed that the original adjudicator took part in the search, so the proceedings were transferred on 12 June 2026. The petitioner's application of 19 June 2026 for cross-examination of respondents 3 and 4 was not decided, and the final order said they were not cross-examined because they had immunity under section 157.

Questions before the court

• Should the High Court interfere under Article 226 because cross-examination of two revenue officers was denied, or leave the taxpayer to the statutory appeal?

Why the court ruled this way

The petitioner argued that the panch witnesses denied the preparation of the panchnama in their presence and so the contents were not proved without the officers' cross-examination (paragraph 7). The department said the panch witnesses did not consistently deny it, one stating he reached the place where it was prepared, that the officers who performed official duties did not have to be cross-examined, and that the petitioner's own writ petition admitted the panchnama was prepared (paragraphs 9 and 10). The Court found that the defect of the first leg no longer existed, documents had been supplied, and the two panch witnesses had been cross-examined; the conclusions to be drawn from that evidence were a merits evaluation for the appeal (paragraph 13). It accepted that the adjudicator's reasoning for refusing cross-examination was unsustainable, but that did not mean cross-examination had to be granted (paragraph 15). The petitioner was not remediless, since the appellate authority may allow cross-examination or call for a report (paragraph 16). The earlier grant of the request, later denied, was an interlocutory order that conferred no vested right (paragraph 17).

Controlling point

The wrong ground for refusing cross-examination did not justify a writ; the matter was best raised in the statutory appeal.

Order and next steps

The writ petition was disposed of without any observation on the merits or on the requirement of cross-examination of respondents 3 and 4, leaving it open to the petitioner before the appeal authority. Subject to the petitioner filing an appeal within four weeks from 8 October 2026, it is to be entertained and decided on its merits without raising any objection as to limitation.

Practical implications

A taxpayer who is refused cross-examination should record the request and the reasons given, then raise it before the appellate authority, which may allow cross-examination or call for a report; a writ is unlikely where an appeal is available and the facts are disputed.

Limits of this ruling

• The Court expressly made no finding on the merits or on whether cross-examination of the officers was required, and the waiver of limitation applies only to an appeal filed within four weeks.