State Of Maharashtra And Ors. vs Nivruti G. Ahire
2006 Latest Caselaw 831 Bom

JUDGMENT

R.M.S. Khandeparkar, J.

1. Heard. The petitioners challenge the judgment and order dated 18th June, 1999 passed by the Maharashtra Administrative Tribunal in Original Application No. 108 of 1995. By the impugned judgment and order, the Tribunal while allowing the Original Application has quashed the charge-sheet dated 30th November, 1994 issued against the respondent herein.

2. Few facts relevant for the decision are that the respondent was employed in the Sales Tax Department of the Government of Maharashtra as a Deputy Commissioner of Sales Tax for a period from 31st March, 1989 to 26th November, 1993, and in that capacity, he had administrative control of the Division under his jurisdiction, apart from the other duties attached to the said office. The Assistant Commissioner of Sales Tax, Assessing Officers and Tax Officers were subordinate to the post of Deputy Commissioner held by the respondent. During the said tenure, the respondent was required to pass orders relating to refund of the excess payment of the sales tax on the consideration of the report submitted in that regard by the Sales Tax Officer or the Assistant Commissioner.

3. It is the case of the petitioners that during the relevant period, in six cases, the refund orders were issued for a total amount of Rs. 95,57,681/- under the signature of the respondent. Out of the six cases, three cases of refund orders were issued on the same day on which the proposals were received by him from the Sales Tax Officer. In one case, it was issued on the day following the day on which the proposal was placed before the respondent. In the 5th case, it was issued after a week, and in the 6th case it was issued after a period of fortnight from the date of submission in that regard by the subordinate officer. It is further case of the petitioners that the respondent without taking due care to verify and/or scrutinise the proposal submitted by the Sales Tax Officer issued the refund orders and thereby caused loss to the tune of Rs. 95,57,681/- to the public exchequer. It is their further case that considering that as the amount which was ordered to be refunded was a huge amount, it was expected from the respondent to observe due care and caution and to have the proposal properly scrutinised before issuance of the refund orders, but the respondent failed to perform his duties in that regard diligently and vigilantly. The respondent was not vigilant and did not take care to ascertain the genuineness of the claim for refund and the proposals submitted in that regard by the Sales Tax Officer and issued the said orders. Having brought the said fad to (he notice of the concerned authorities, the order dated 30th November. 1994 was issued for initiating departmental inquiry against the respondent. Consequently, the memo Was issued to the respondent. The respondent sought to challenge the said order and the memo before the Maharashtra Administrative Tribunal by the Original Application No. 108 of 1995 which came to be allowed by the impugned order quashing the said order and Memo dated 30th November, 1994. Hence the present petition.

4. It is to be noted that the respondent retired on attaining the age of superannuation on 30th November, 1994.

5. The learned AGP appearing for the petitioners, while assailing the impugned order, submitted that the Tribunal merely on the basis of a circular dated 20th January, 1988 which requires the concerned authority to attend the refund claim promptly, by misconstruing the said circular, erred in quashing the order dated 30th November, 1994 along with the Memo issued against the respondent. He further submitted that the order apparently discloses that the preliminary inquiry revealed failure on the part of the respondent to perform his duties diligently resulting in losses of Rs. 95,57,681/- to the public exchequer and that therefore it was a clear case for necessary departmental inquiry to ascertain and fix the responsibility, if any, of the respondent in relation to the said loss. The Tribunal having totally ignored the same and having proceeded to quash the said order solely on the basis of misconstruction of the circular has clearly acted illegally, and therefore, the impugned order needs to be quashed and set aside.

6. The learned advocate appearing for the respondent, on the other hand, submitted that the respondent was merely a signing authority and verification regarding refund claim was required to be done by the subordinate officer, and based on such verification the respondent was required merely to affix his signature to the report submitted to him in relation to the refund claim and that is apparent from the circular dated 20th January, 1988 on which the Tribunal has placed reliance while quashing the order of 30th November, 1994. The respondent having duly complied with the directions given under the said circular cannot be said to have failed in performance of his duties or being not diligent in performance of his duties, nor he can be held to be responsible for any loss alleged to have been suffered on account of the said refund orders. In case of loss in that regard, nothing prevents the Government from challenging the loss by filing proper appeals against the orders or taking appropriate steps in that regard but that cannot be a justification to contend that the respondent had failed in performance of his duties.

7. Section 20 of the Bombay Sales Tax Act, 1959 deals with the authorities under the said Act. Sub-section (1) thereof provides that the State Government shall appoint an officer to be called the Commissioner of Sales Tax. Under Sub-section (2), the State Government may appoint Additional Commissioner of Sales Tax and such number of Deputy Commissioners, Senior Assistant Commissioner, Assistant Commissioners, Sales Tax Officers, and other officers and persons, and give them such designations, if any, as that Government may think necessary. Sub-section (3) of the Section 20 of the said Act provides that the Commissioner shall have jurisdiction over the whole of the State of Maharashtra and an Additional Commissioner of Sales Tax, if any be appointed, shall have jurisdiction over the whole of the State, or where the State Government so directs, over any local area thereof, and all other officers shall have jurisdiction over such local areas as the Stale Government may specify. The Sub-section (4) provides that the Commissioner shall have and exercise all the powers and perform all duties, conferred or imposed on the Commissioner by or under the said Act, and an Additional Commissioner, if any be appointed, shall, save as otherwise directed by the State Government, have and exercise within his jurisdiction all the powers and perform all the duties, conferred or imposed on the Commissioner by or under the said Act.

8. Section 43 of the said Act deals with the subject of refund of excess payment under the said Act. Sub-section (1) thereof provides that subject to the other provisions and the rules made thereunder, the Commissioner shall refund to a person the amount of tax, penalty and interest, if any, paid by such person in excess of the amount due from him. The refund may be either by cash payment or, at the option of the person by deduction of such excess from the amount of tax, penalty and interest due in respect of any other period, provided that the Commissioner shall first apply such excess towards the recovery of any amount due in respect of which notice under Sub-section (4) of Section 38 has been issued and shall then refund the balance, if any. Sub-section (2) thereof provides that when any refund is due to any dealer according to the return furnished by him for any period, such refund may provisionally be adjusted by him against the tax due and payable as per the returns furnished under Section 32 for any period, provided that the amount of tax, penalty or interest or of all of them due from and payable by, the dealer on the date of such adjustment shall first be deducted from such refund before making adjustment.

9. Section 74 of the said Act empowers the Government to frame rules to carry out the purposes of the said Act and accordingly the Government has framed the Bombay Sales Tax Rules, 1959.

10. Rule 48 of the said Rules provides that when the Commissioner is satisfied that a refund is due, he shall record an order showing the amount of refund due and shall communicate the same to the dealer. Rule 49 deals with the refund according to revised return, and the Rule 50 provides that when an order for refund has been made under Rule 48 or 49, the Commissioner shall if the applicant desires payment in cash issued to him a refund payment order in Form 34 or in Form 34A. Rule 52A makes provision for sanctioning interest on delayed refunds and it provides that whereupon an application by any person claiming interest on any delayed refund or otherwise the Commissioner is satisfied that such interest is due and payable to the applicant or any person under Section 44A, the Commissioner shall record an order specifying therein the amount of refund the payment of which was delayed, the period of delay for which interest is payable and the amount of interest payable by the State Government therefor, and shall communicate the same to the applicant or person concerned.

11. The provisions of the said Act and the Rules referred above, therefore, evidently disclose that the powers of the Commissioner under Section 43 can also to be exercised by the Deputy Commissioner in relation to the area of his jurisdiction. This position in law is not in dispute.

12. Section 43 of the said Act nowhere discloses that the Commissioner or a Deputy Commissioner to be a mere postman or a courier of the report of refund prepared either by the Sales Tax Officer or an officer subordinate to Commissioner or Deputy Commissioner, to carry the same to the dealer or the refund claimant. On the contrary, the provisions clearly impose an obligation on such authority to ensure that the dealer or the refund claimant is entitled for refund and whatever proposal is prepared by a subordinate officer regarding refund is in accordance with the provisions of law and as per the entitlement of the dealer or the refund claimant in relation to the refund. This is further clarified by the rules and in particular the Rule 48 of the said Rules which clearly says that the authority must be satisfied that a refund is due. In other words, no refund order can be issued unless the refund is really due and payable to the claimant. The concerned officer, therefore, cannot act mechanically and without application of mind to sanction the refund solely on the basis of the report submitted by the subordinate officers. Undoubtedly, it is primarily for such officer to verify that the claimant's claim for refund and to ascertain whether he is factually and legally entitled for refund or not, and to what extent the refund is to be approved. Any failure in that regard by the concerned officer would amount to failure in performance of the obligation and duty cast upon such officer under Section 43 of the said Act read with the Rule 48 of the said Rules. Plain reading of the order of the Tribunal nowhere discloses any application of mind to this most important aspect of the matter, more particularly when the Tribunal was dealing with a matter where the authority had issued such order prima facie disclosing the failure on the part of the concerned officers to perform his duty enumerated under the statutory provisions and that too in relation to the public money. Obviously, therefore, the petitioners are justified in contending not only about the failure on the part of the Tribunal to apply its mind while deciding the matter but also illegality of the impugned order. It appears that the Tribunal has disposed of the matter too casually without dealing with the issue which was required to be addressed and the same clearly justifies interference in the impugned order in writ jurisdiction.

13. The order dated 30th November, 1994 which was followed by the Memo to the respondent apparently discloses that the refund orders were issued by the respondent in his capacity as Deputy Commissioner of Sales Tax without due diligent and in utmost hurry resulting in loss of Rs. 95,57,681/- to the public exchequer. The order also discloses that the refund orders were issued on the proposals submitted by only one Sales Tax Officer viz. Shri M.V. More. It is not in dispute that there were disciplinary proceedings against the said officer and it is a matter of record. It is also a matter of record that such disciplinary proceedings were initiated in relation to the very orders and the amount disclosed in the impugned order. Totally ignoring this aspect, the Tribunal proceeded to give a clean chit to the respondent by merely referring to a circular dated 20th January, 1988. The learned advocate for the respondent has also placed heavy reliance on the said circular to justify the impugned order. Attention was drawn to the following paragraph from the said circular. The same reads thus:

Care is to be taken that there is no undue delay in issue of refund payment orders and advice notes to the bankers. For this purpose, it is necessary that immediately after the assessment order is passed, the A.O. and demand notice have been dispatched to the dealer, the assessing officer will send the proposal for refund to the next higher authority. The next higher authority will not have time for verifying whether the amount of refund worked out by the Assessing Officer is correct or not and will depend on the recommendations of the Assessing Officer in this regard. Therefore, the responsibility for deciding the quantum of R.P.O. will continue to be with the assessing officer himself and he will not be able to transfer this responsibility merely because the R.P.O. is being issued by some higher authority.

14. At the outset, it is to be noted that no circular or executive fiat can override the statutory provisions. Any circular or executive fiat has to be read along with the statutory provision and any provision in any such circular or executive fiat contrary to the statutory provision cannot have enforceability and no right can be claimed by any one based on such circular or executive fiat contrary to the statutory provision.

15. In any case, above quoted paragraph from the said circular dated 20th January, 1988 nowhere discloses any provision contrary to the statutory liability imposed upon the Commissioner and Deputy Commissioner under Section 43 of the said Act read with Rule 48 of the said Rules. The provision in the said circular merely contemplates that in addition to the responsibility of the Commissioner and Deputy Commissioner under the said statutory provision, it would also be the responsibility of the subordinate officers preparing proposals for refund. In case of any proposal prepared by the subordinate officer, if it contains mistake, it would be responsibility of the said officer also. The said circular nowhere provides and cannot provide that it will relieve the higher authority from its responsibility as provided under Section 43 of the said Act and the Rule 48 of the said Rules. The provision under the said circular nowhere provides nor it can provide that the authority exercising powers under Section 43 of the said Act and the Rule 48 of the said Rules can mechanically issue refund orders without ascertaining whether the refund is really due or not. Being so, the circular nowhere assists the respondent to contend that the authorities had no power to issue the order dated 30th November, 1994 or to initiate departmental proceedings against the respondent. Without considering this aspect, the Tribunal, mechanically referring to the said circular, held the order dated 30th November, 1994 to be bad-in-law and set aside the order and the Memo issued to the respondent, in an arbitrary manner.

16. The contention on behalf of the respondent that the circular required expeditious disposal of the refund claims and the same are to be disposed of without "undue delay", and therefore, they must be disposed of on the very clay when the proposal was submitted by the authority is totally devoid of substance. It cannot be disputed that the refund claims are to be disposed of as expeditiously as possible and without unnecessarily delay. But that does not mean that the refund orders are to be issued mechanically and without ascertaining whether the claim is genuine or not and without ascertaining whether the amount is really due for being refunded or not. A proper balance has to be struck by the concerned authority in that regard. While there should not be undue delay, at the same time, there should not be unwarranted haste in disposal of such claims, and the authorities shall always have to act diligently with the public money as any mistake in that regard would amount to unwarranted burden on the public exchequer. Almost care has necessarily to be taken by the concerned authority while dealing with the claim for refund. Being so, merely because the circular says that there should not be undue delay, that does not mean that the authorities should act hastily. The expression used in the circular is that there should not be "undue delay". The prefix that 'undue' to the term "delay" clearly discloses the intention of the framers of the circular that the officers have to act diligently, and to act diligently does not mean acting hastily. It has to be necessarily with care, caution and diligence.

17. In the facts and circumstances of the case narrated above, therefore, it is apparent that there was no justification for the Tribunal to interfere in the order dated 30th November, 1994 and the Memo issued to the respondent nor it could have quashed the departmental proceedings against the respondent.

18. The order dated 30th November, 1994, as already stated above, prima facie discloses failure on the part of the respondent to perform his duties as enumerated under Section 43 of the said Act read with the Rule 48 of the said Rules resulting in losses of Rs. 95,57,681/- to the public exchequer, and therefore, the petitioners were justified in initiating departmental proceedings against the respondent.

19. Needless to say that since the respondent had retired on attaining the age of superannuation on 30th November, 1994, the proceedings against the respondent could be now proceeded in terms of the Rule 27(2)(a) of the Maharashtra Civil Services (Pension) Rules, 1982. The Rule 27(2)(a) thereof clearly provides that the departmental proceedings referred to in Sub-rule (1), if instituted while the Government servant was in service whether before his retirement or during his re-employment, shall, after the final retirement of the Government servant, be deemed to be proceedings under this rule and shall be continued and concluded by the authority by which they were commenced in the same manner as if the Government servant had continued in service. It is also not in dispute that during the pendency of the Original Application No. 108 of 1995, the departmental proceedings were stayed, and ultimately, they were quashed by an order dated 18th June, 1999. The proceedings in the said original application were initiated immediately after the issuance of the order dated 30th November, 1994. Being so, the respondent is entitled for exemption of the said period for continuation of the due proceedings against the respondent in terms of the Rule 27(2)(a) of the said Maharashtra Civil Services (Pension) Rules, 1982. As the matter relates to the period from 1989 to 1993 and the respondent having already retired and the amount involved is Rs. 95,57,681/-, the petitioners are expected to proceed with the proceedings and to take appropriate decision in accordance with the provisions of law as expeditiously as possible.

20. For the reasons stated above, therefore, the impugned order cannot be sustained and is liable to be quashed and set aside and the order dated 30th November, 1994 against the respondent is to be restored along with the Memo, which would entitle the petitioners to proceed with the necessary departmental inquiry bearing in mind the observations made hereinabove.

21. In the result, the petition is allowed with costs of Rs. 2,000/- by the respondent to the petitioners. The rule is made absolute in above terms.