Madras High Court
S.Doctor Viswanathan vs The State Of Tamil Nadu on 7 August, 2024
Author: N.Anand Venkatesh
Bench: N.Anand Venkatesh
2024:MHC:3045
W.P.No.33639 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 07.08.2024
CORAM
THE HONOURABLE MR.JUSTICE N.ANAND VENKATESH
W.P.No.33639 of 2023
and W.M.P.No.33480 of 2023
S.Doctor Viswanathan,
State Tax Officer, Commercial Taxes Department,
Pondy Bazaar Assessment Circle,
Chennai (Central) Division, Chennai. .. Petitioner
Vs.
1.The State of Tamil Nadu,
Rep. by its Secretary,
Commercial Taxes and Registration Department,
Secretariat, Chennai – 600 009.
2.The Commissioner of Commercial Taxes,
O/o. the Commissioner of Commercial Taxes,
Chepauk, Chennai – 600 005. .. Respondents
Prayer: Writ Petition filed under Article 226 of the Constitution of India
praying to issue a Writ of Certiorari, calling for the records in connection
with the impugned order bearing Proc.No.CD2/5566023/2023, dated
01.11.2023 issued by the 2nd respondent and quash the same.
For petitioner : Mr.V.Prakash
Senior Counsel
for Mr.K.Krishnamoorthy
For Respondents : Mrs.Vasanthamala
Government Advocate (Tax)
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1/23
W.P.No.33639 of 2023
ORDER
The subject matter of challenge in the present writ petition pertains
to the impugned suspension order issued by the 2nd respondent in
Proc.No.CD2/5566023/2023 dated 01.11.2023.
2.The petitioner is working in the post of Commercial Tax Officer
which has now been re-designated as the State Tax Officer. He is
assigned with the statutory duties under the Goods and Service Tax Act
(GST) with effect from 01.07.2017. Among many other statutory
functions, the petitioner has also been assigned the duty of passing orders
of refund claims under the statutory forms. The further case of the
petitioner is that this task is in the nature of a Quasi-Judicial function. As
per the prevailing regulations, the petitioner has to pass orders within a
week from the date of filing of a refund claim by the tax payer under
Form RFD-01, where 90% of the claim to be refunded is decided.
Thereafter, under RFD-04, the petitioner has to decide the refund of the
balance 10%.
3.In so far as the scrutiny of the application for refund is
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concerned, it is governed by the circular issued which specifically states
as to what are all the documents / sites, the officer should check before
processing the refund claim.
4.The further case of the petitioner is that one of the refund claim
made by Khan Traders was allotted to the petitioner during March, 2023.
The said Khan Traders filed an online applicable under statutory form
RFD-01 on 19.04.2023, claiming a refund of Rs.69,01,127/-. Along with
the claim, he also submitted various other documents. The petitioner on
verifying the documents and after checking the ICEGATE site, granted
refund under RFD-02 upo 90% of the total claim. Thereafter, under
RFD-05, the balance 10% was also refunded.
5.The specific case of the petitioner is that he has passed the
refund order in strict compliance with Rule 54 of the CGST Rules and
the circular dated 23.03.2020. After nearly six months, it came to light
that the goods never crossed beyond the boundaries of India and some
fraud had been committed by the trader. It is under these circumstances,
the impugned suspension order dated 01.11.2023 came to be issued by
the 2nd respondent. The same has been put to challenge in the present writ
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petition.
6.The respondents have filed counter affidavit. The respondents
have taken a stand that the petitioner failed to verify the e-way bills
which will specifically show the movement of the vehicle when it is
crossing various tolls. It is further stated in the counter that the trader
namely Khan Traders was also attempting to claim refund of the
accumulated Input Tax Credit by playing fraud and the Directorate of
Revenue Intelligence had forewarned to withhold any such application
after the claim is made. Based on the record of the Directorate of
Revenue Intelligence dated 11.09.2023, an inquiry was conducted and
the results of the inquiry are as follows:
“1)The refund for the month of March
2023 for Rs.69,01,128/- was filed on
19.04.2023 at 16:53 hrs and RFD 04 for
Rs.62,11,015/- was sanctioned on 24.04.2023
at 04:52 pm. However, RFD 05 was issued on
09.05.2023 at 12:08 pm only. Further, the RFD
06 amount of Rs.6,90,112/- was sanctioned on
09.05.2023 at 12:08 pm for which RFD 05 has
been issued on 09.05.2023 at 12:09 pm by the
said official.
2) From the above, it is seen that,
refunds were sanctioned in undue haste and
non-application of mind, though a statutory
time limit of 7 days from the date of
acknowledgement has been given for 90%
amount sanction and 60 days for the balance
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10% of the refund claimed.
3) Registration Certificate in respect of
Tvl. Khan Traders, details was not verified
properly during the sanction of refunds though
the same was deemed approved.
4)Being a deemed approved Registration
Certificate claiming refund within a month for
sensitive commodity, no efforts were taken for
post verification.
5)No proper efforts were made to verify
the documents like E Way Bills and the
purchases (15.3.2023 – 6 invoices – Rs.4.16
Crores) (10.04.2023 – 12 invoices – Rs.8.07
Crores) Vs Export (sale details (31.03.2023 –
23 Invoices) (24.04.2023 – 21 Invoices,
25.04.2023 – 21 Invoices, 26.04.2023 – 9
Invoices) submitted along with the high value
Refund claims.
6)In this case, though high value refund
claims were filed for 2 months (as detailed
above) wherein Registration was given by
deemed approval and the business activity was
done only on one day during the month
(31.03.2023) – March 23 Invoices, no doubts /
queries were raised by the Officers who were
having quiet good field experience.
7)The Refund claims were sanctioned
with undue haste, without proper application of
mind and without any due regards to statutory
time limit of 7 days from the date of
acknowledgement has been given for 90%
amount sanction and 60 days for the balance
10% of the refund claimed”.
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7.In the light of the above findings that came out of the inquiry, the
petitioner was placed under suspension by the 2nd respondent since the
petitioner has issued refund to a fake exporter without properly verifying
the relevant details with undue haste and with malafide intention and
thereby the petitioner has caused revenue loss to the Government
exchequer to the tune of Rs.6,90,01,127/-. It is also stated in the counter
affidavit that a charge memo has already been issued by the 2nd
respondent dated 05.01.2024 to the petitioner.
8.The respondents have therefore justified placing the petitioner
under suspension pending disciplinary proceedings, considering the
public interest involved and the money that has been lost by the
exchequer and the respondents have sought for the continuation of the
suspension of the petitioner and for the dismissal of this writ petition.
9.Heard the learned Senior Counsel for the petitioner and the
learned Government Advocate (Tax) for the respondents.
10.This Court has carefully considered the submissions made on
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either side and the materials available on record.
11.Section 54 of the CGST Act, 2017 deals with refund of tax. A
circular dated 23.03.2020 has also been issued by the Commissioner of
Commercial Taxes specifically providing the modalities to be followed
for all refund applications filed in form GST RFD-01. It will be relevant
to take note of clause 18 of the circular hereunder:
“Scrutiny of Application
18.In case of refund claim on account of export
of goods without payment of tax, the Shipping
bill details shall be checked by the proper
officer through ICEGATE SITE
(www.icegate.gov.in) wherein the officer would
be able to check details of EGM and shipping
bill by keying in port name, Shipping bill
number and date. It is advised that while
processing refund claims, information
contained in Table 9 of FORM GSTR-1 of the
relevant tax period as well as that of the
subsequent tax periods should also be taken
into cognizance, wherever applicable. In this
regard, TN Circular No.06/2017-TNGST dated
29.12.2017 may be referred, wherein the
procedure for rectification of errors made while
filing the returns in FORM GSTR-3B has been
provided. Therefore, in case of discrepancies
between the data furnished by the taxpayer in
FORM GSTR-3B and FORM GSTR-1, the
proper officer shall refer to the said Circular
and process the refund application
accordingly.”
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12.The petitioner at paragraph No.5 of the affidavit has stated as
follows:
“5.I submit that Tvl. Khan traders filed
an online application under the statutory Form
RFD-01 on 19.04.2023, claiming a refund of
Rs.69,01,127/- along with a statement, GSTR-
2A, Annexure-B, GSTR-3B, GSTR-1, an export
invoice, declaration, shipping bills, and a copy
of the electronic credit ledger in respect of the
export of goods supplied without payment of
integrated tax in accordance with Rule 96A(1)
of the TNGST Rules. The aforesaid documents
are the required documents for granting
refunds as per Circular No-1/2019-2020 dated
23.3.2020. A System-generated
acknowledgement was issued to him under
RFD-02. A provisional refund as per Rule
91(2) up to 90% of the total claim was issued
on 24.04.2023, under RFD-04. Thereafter,
RFD-05 payment order was passed on
09.05.2023, and the balance of 10% as issued
vide RFD-06.”
13.Apart from the above, the petitioner has also specifically listed
the various documents / certificates filed online which has to be verified
before passing orders on a refund. Annexure – A to the circular dated
23.03.2020 is extracted hereunder:
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“Anneure – A
List of all statements / declarations / undertaking /
certificates and other supporting documents to be
provided along with the refund applications
Sl. Type of Declaration / Statement / Supporting documents to be
No. Refund Undertaking / Certificates additionally uploaded
to be filled online
Declaration under second Copy of GSTR-2A of the relevant
and third proviso to Section period
54(3)
Refund of Undertaking in relation to Statement of invoices (Annexure-
unutilized sections 16(2)(c) and B)
ITC on section 42(2)
account of Statement 3 under rule Self-certified copies of invoices
exports 89(2)(b) and rule 89(2)(c) entered in Annexure-B whose
without details are not found in GSTR-2A
payment of of the relevant period
tax
Statement 3A under rule BRC/FIRC in case of export of
89(4) services and shipping bill (only in
case of exports made through non-
EDI ports) in case of goods.
14.The respondents have filed counter to the effect that the
petitioner before passing orders granting refund, failed to verify the E-
way bills and as a result, the petitioner has refunded the Input Tax to a
fraudulent exporter.
15.The scope of interference in a suspension order is very narrow
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and the law on this issue is now too well settled. It will be relevant to
take note of the judgment of the Hon'ble Supreme Court in Union of
India and another Vs. Ashok Kumar Aggarwal reported in (2013) 16
SCC 147 and the relevant paragraphs are extracted hereunder:
“21.The power of suspension should not
be exercised in an arbitrary manner and
without any reasonable ground or as vindictive
misuse of power. Suspension should be made
only in a case where there is a strong prima
facie case against the delinquent employee and
the allegations involving moral turpitude, grave
misconduct or indiscipline or refusal to carry
out the orders of superior authority are there,
or there is a strong prima facie case against
him, if proved, would ordinarily result in
reduction in rank, removal or dismissal from
service. The authority should also take into
account all the available material as to whether
in a given case, it is advisable to allow the
delinquent to continue to perform his duties in
the office or his retention in office is likely to
hamper or frustrate the inquiry.
22.In view of the above, the law on the
issue can be summarised to the effect that
suspension order can be passed by the
competent authority considering the gravity of
the alleged misconduct i.e. serious act of
omission or commission and the nature of
evidence available. It cannot be actuated by
mala fide, arbitrariness, or for ulterior
purpose. Effect on public interest due to the
employee’s continuation in office is also a
relevant and determining factor. The facts of
each case have to be taken into consideration
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as no formula of universal application can be
laid down in this regard. However, suspension
order should be passed only where there is a
strong prima facie case against the delinquent,
and if the charges stand proved, would
ordinarily warrant imposition of major
punishment i.e. removal or dismissal from
service, or reduction in rank etc.
23.In Jayrajbhai Jayantibhai Patel v.
Anilbhai Nathubhai Patel & Ors., (2006) 8 SCC
200, this Court explained:
“18. Having regard to it all, it is manifest
that the power of judicial review may
not be exercised unless the
administrative decision is illogical or
suffers from procedural impropriety or it
shocks the conscience of the court in the
sense that it is in defiance of logic or
moral standards but no standardised
formula, universally applicable to all
cases, can be evolved. Each case has to
be considered on its own facts,
depending upon the authority that
exercises the power, the source, the
nature or scope of power and the
indelible effects it generates in the
operation of law or affects the individual
or society. Though judicial restraint,
albeit self-recognised, is the order of the
day, yet an administrative decision or
action which is based on wholly
irrelevant considerations or material; or
excludes from consideration the relevant
material; or it is so absurd that no
reasonable person could have arrived at
it on the given material, may be struck
down. In other words, when a court is
satisfied that there is an abuse or misuse
of power, and its jurisdiction is invoked,
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it is incumbent on the court to intervene.
It is nevertheless, trite that the scope of
judicial review is limited to the
deficiency in the decision-making
process and not the decision.”
24.Long period of suspension does not
make the order of suspension invalid. However,
in State of H.P. v. B.C. Thakur, (1994) SCC
(L&S) 835, this Court held that where for any
reason it is not possible to proceed with the
domestic enquiry the delinquent may not be
kept under suspension.
25.There cannot be any doubt that the
Rules 1965 are a self contained code and the
order of suspension can be examined in the
light of the statutory provisions to determine as
to whether the suspension order was justified.
Undoubtedly, the delinquent cannot be
considered to be any better off after the charge
sheet has been filed against him in the court on
conclusion of the investigation than his position
during the investigation of the case itself. (Vide:
Union of India & Ors. v. Udai Narain)
26.The scope of interference by the Court
with the order of suspension has been examined
by the Court in a large number of cases,
particularly in State of M.P. v. Sardul Singh,
(1970) 1 SCC 108; P.V. Srinivasa Sastry v.
Comptroller & Auditor General of India, (1993)
1 SCC 419; Director General, ESI & Anr. v. T.
Abdul Razak, AIR 1996 SC 2292; Kusheshwar
Dubey v. M/s Bharat Cooking Coal Ltd. & Ors.,
AIR 1988 SC 2118; Delhi Cloth General Mills
vs. Kushan Bhan, AIR 1960 SC 806; U.P. Rajya
Krishi Utpadan Mandi Parishad & Ors. v.
Sanjeev Rajan, (1993) Supp. (3) SCC 483; State
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of Rajasthan v. B.K. Meena & Ors., (1996) 6
SCC 417; Secretary to Govt., Prohibition and
Excise Department v. L. Srinivasan, (1996) 3
SCC 157; and Allahabad Bank & Anr. v.
Deepak Kumar Bhola, (1997) 4 SCC 1, wherein
it has been observed that even if a criminal trial
or enquiry takes a long time, it is ordinarily not
open to the court to interfere in case of
suspension as it is in the exclusive domain of
the competent authority who can always review
its order of suspension being an inherent power
conferred upon them by the provisions of
Article 21 of the General Clauses Act, 1897 and
while exercising such a power, the authority
can consider the case of an employee for
revoking the suspension order, if satisfied that
the criminal case pending would be concluded
after an unusual delay for no fault of the
employee concerned. Where the charges are
baseless, mala fide or vindictive and are framed
only to keep the delinquent employee out of job,
a case for judicial review is made out. But in a
case where no conclusion can be arrived at
without examining the entire record in question
and in order that the disciplinary proceedings
may continue unhindered the court may not
interfere. In case the court comes to the
conclusion that the authority is not proceeding
expeditiously as it ought to have been and it
results in prolongation of sufferings for the
delinquent employee, the court may issue
directions. The court may, in case the authority
fails to furnish proper explanation for delay in
conclusion of the enquiry, direct to complete
the enquiry within a stipulated period.
However, mere delay in conclusion of enquiry
or trial can not be a ground for quashing the
suspension order, if the charges are grave in
nature. But, whether the employee should or
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should not continue in his office during the
period of enquiry is a matter to be assessed by
the disciplinary authority concerned and
ordinarily the court should not interfere with
the orders of suspension unless they are passed
in mala fide and without there being even a
prima facie evidence on record connecting the
employee with the misconduct in question.”
16.It is quite clear from the above judgment that the order of
suspension is generally interfered where the authority does not have the
jurisdiction to issue such a suspension order or where it is attended with
malafides or in a case where there are no strong prima facie materials
available against the delinquent. The Hon'ble Supreme Court has also
cautioned that in a case where it involves public interest and the
continuation of the employee in the office will be detrimental to the
further proceedings, that is also a ground where a suspension will be
justified.
17.The petitioner in the instant case has challenged the order of
suspension mainly on the ground that there are no strong prima facie
materials against the petitioner and that there was a clear non-application
of mind on the part of the respondents in justifying the suspension on the
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ground that the petitioner did not check / verify the E-way bills, which
was not a requirement under the circular dated 23.03.2020.
18.It must be borne in mind that the threshold while dealing with a
suspension order passed against an authority exercising a Quasi-Judicial
power or a Judicial power, must be slightly at a higher level than the test
applied for the authorities who are performing administrative functions.
The act of passing orders on the application filed for refund of the Input
Tax, is clearly a Quasi-Judicial function. The relevant provision
contemplates that the refund claim must be proceeded within a period of
seven (7) days from the date of filing of he application for refund. If it is
not complied with, it will attract interest and in which case it will also
amount to a misconduct for violation of the provisions of the GST Act.
Therefore, the authority has to balance the interest of the exchequer and
at the same time must process the refund claim within the time stipulated
by the Act. That is the reason why the circular itself provides the
documents / certificates that are to be verified online. It is quite apparent
that whatever documents / certificates / declarations / statements that
have been provided under annexure – A was verified by the petitioner
while passing orders for refund of the Input Tax Credit. A portal is
specifically created only for this purpose and the officer is expected to go
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into the ICEGATE site and check the details of the EGM and shipping
bill by keying in port name, shipping bill number and date. There is no
dispute that the petitioner has followed this procedure. No where under
the Act or under the circular, the petitioner was expected to verify the E-
way bills physically. If the petitioner has to involve in this exercise,
obviously he will not be able to process the application and pass orders
within a period of seven (7) days.
19.The export invoices, shipping bills, ICEGATE, EPDMS that
was verified by the petitioner is grouped by way of a tabular column as
hereunder:
“EXPORT INVOICES, SHIPPING BILLS, ICE
:: GATE, EPDMS COMPARISON TABLE
Sl. Invoice Value (INR) Invoice SB No. SB Page ICE EPDMS
No. No. Page No. Gate Page No.
No. Page No.
1 KT01 948,000.00 70 9144893 96 226 296
2 KT02 955,900.00 71 9144896 101 229 297
3 KT03 963,800.00 72 9144898 106 232 298
4 KT04 971,700.00 73 9144895 111 235 299
5 KT05 979,600.00 74 9144899 116 238 300
6 KT06 987,500.00 75 9144897 121 241 301
7 KT07 995,400.00 76 9144901 126 244 302
8 KT080 948,000.00 77 9144902 131 247 303
9 KT09 955,900.00 78 9144900 136 250 304
10 KT10 963,800.00 79 9144904 141 253 305
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Sl. Invoice Value (INR) Invoice SB No. SB Page ICE EPDMS
No. No. Page No. Gate Page No.
No. Page No.
11 KT11 971,700.00 80 9144903 146 256 306
12 KT12 979,600.00 81 9144906 151 259 307
13 KT13 987,500.00 82 9144905 156 262 308
14 KT14 995,400.00 83 9144909 161 265 309
15 KT15 948,000.00 84 9144907 166 268 310
16 KT16 955,900.00 85 9144908 171 271 311
17 KT17 963,800.00 86 9144910 176 274 312
18 KT18 971,700.00 87 9144911 181 277 313
19 KT19 979,600.00 88 9144913 186 280 314
20 KT20 987,500.00 89 9144912 191 283 315
21 KT21 995,400.00 90 9144915 196 286 316
22 KT22 948,000.00 91 9144914 201 289 317
23 KT23 955,900.00 92 9144916 206 292 318
Total 22,309,600.00
20.As a Quasi-Judicial authority, if the petitioner has fulfilled all
the requirements that are provided under the relevant Act and the
circular, that by itself is sufficient compliance before passing the order of
refund of the tax. If for any reasons, it ultimately turns out to be a fake
export by a fraudster, the order passed by the petitioner by itself cannot
result in the suspension of the petitioner. In other words, when the
petitioner was exercising his Quasi-Judicial function, unless there was a
strong prima facie material against the petitioner involving moral
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turpitude, grave misconduct, etc., suspension must be the last resort.
21.In the light of the above discussions, this Court finds that there
were no strong prima facie materials against the petitioner to prima facie
come to a conclusion that the petitioner was involved in an act of moral
turpitude or grave misconduct.
22.In view of the above, this Court is inclined to interfere with the
order of suspension passed by the 2nd respondent.
23.The learned Government Advocate (Tax) submitted that the
charge memo has already been issued to the petitioner and the
departmental proceedings are underway. The learned counsel also
brought to the notice of this Court the suspension order that was issued
against another officer and which was put to challenge in W.P.No.8203
of 2024. The learned Government Advocate submitted that this Court
was inclined the dismiss the writ petition on the ground that the charge
memo has already been given.
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24.The order that was brought to the notice of this Court will not
apply to the facts of the present case since the ground that was taken in
that writ petition was that no charge memo was served on the petitioner
and the petitioner was kept on a continued suspension. This Court was
informed that the charge memo has already been served on the petitioner
therein and recording the same, that writ petition was dismissed.
25.That order will not become a precedent in the present case
since, the ground that has been taken is completely different and the
same has been dealt with in detail supra.
26.In the instant case, it has come to light that a fake exporter has
taken the department for a ride and he has also received refund of tax to
the tune of Rs.69,01,127/-. To that extent, there is definitely a loss to the
exchequer. Apart from that, some of the other officers have also been
suspended in this case and the respondents want to conduct a detailed
enquiry. Keeping this in mind and also considering the public interest
involved, it will not be desirable to continue the petitioner in the same
station. Therefore, it will be left open to the respondents to post the
petitioner in some insensitive post in a different place till the completion
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of the departmental proceedings.
27.In the result, the impugned suspension order bearing
Proc.No.CD2/5566023/2023, dated 01.11.2023 issued by the 2nd
respondent is hereby quashed. There shall be a direction to the
respondents to post the petitioner in some insensitive post in a different
station. The departmental proceedings shall be proceeded with after
affording sufficient opportunity to the petitioner. It will be desirable to
complete the proceedings within a period of three (3) months from the
date of receipt of a copy of this order.
28.Accordingly, this Writ Petition stands allowed with the above
directions. Consequently, the connected Miscellaneous Petition is closed.
No costs.
07.08.2024
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Index : Yes
Internet : Yes
Neutral Citation : Yes
https://www.mhc.tn.gov.in/judis
To
1.The State of Tamil Nadu,
Rep. by its Secretary,
Commercial Taxes and Registration Department,
Secretariat, Chennai – 600 009.
2.The Commissioner of Commercial Taxes,
O/o. the Commissioner of Commercial Taxes,
Chepauk, Chennai – 600 005.
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N.ANAND VENKATESH, J.
krk
https://www.mhc.tn.gov.in/judis
07.08.2024
https://www.mhc.tn.gov.in/judis
