2025 (8) TMI 642 - HC - VAT / Sales Tax

Departmental proceedings quashed due to lack of material and procedural irregularities under relevant service rules

Sri Haripada Ray Versus The State of Tripura, The Commissioner of Taxes, Tripura, The Superintendent of Taxes, Tripura.

Sri Haripada Ray Versus The State of Tripura, The Commissioner of Taxes, Tripura, The Superintendent of Taxes, Tripura. - TMI 1. ISSUES PRESENTED and CONSIDERED Whether the High Court can exercise writ jurisdiction at the stage when only a show-cause notice and articles of charge have been issued, but the departmental inquiry has not yet commenced. Whether the departmental proceeding initiated against the petitioner is valid in the absence of any imputation of misconduct or misbehavior in the articles of charge. Whether the petitioner can be implicated in the departmental proceeding for alleged distortion of public records when the assessment orders in question were passed by different officers and the petitioner was not holding the relevant posts at the relevant times. Whether the suspension order issued against the petitioner is sustainable, considering the nature of suspension and the authority's power to suspend pending inquiry. The scope and limits of judicial review in interference with departmental proceedings and suspension orders at the preliminary stage. Whether the petitioner was afforded reasonable opportunity of being heard as required under the relevant statutory provisions. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Jurisdiction of the Court to entertain writ petition at the stage of issuance of show-cause notice and articles of charge before commencement of departmental inquiry - Relevant legal framework and precedents: It is a settled principle that ordinarily writ courts do not interfere at the stage of issuance of show-cause notice or framing of charges in departmental proceedings. The courts maintain judicial restraint to allow the disciplinary authority to conduct inquiry and adjudicate on the charges. Exceptions exist only in rare and exceptional cases where the show-cause notice is wholly without jurisdiction or is an abuse of process of law. Precedents emphasize that judicial review is confined to the decision-making process and not the correctness of the decision itself. The courts cannot substitute their opinion for that of the disciplinary authority. - Court's interpretation and reasoning: The Court acknowledged the general rule of non-interference at the show-cause notice stage but found the present case to be exceptional. The departmental proceeding had not fully commenced; only the show-cause notice and articles of charge were issued. The petitioner was not alleged to have committed any misconduct or misbehavior, and the charges appeared to be based on erroneous assumptions regarding the petitioner's role in passing assessment orders. - Key evidence and findings: The petitioner was shown to be not holding the post of Superintendent of Taxes at the time the relevant assessment orders were passed by other officers. The departmental authority's memo initiating inquiry against the petitioner was based on a communication that did not specifically allege distortion of records by the petitioner. The articles of charge did not impute misconduct or misbehavior. - Application of law to facts: Since the departmental proceeding was initiated without any material implicating the petitioner and before inquiry had commenced, the Court found it appropriate to exercise writ jurisdiction to prevent abuse of process and harassment. - Treatment of competing arguments: Respondents argued that the writ petition was premature and that the petitioner had opportunity to defend before the disciplinary authority. They contended that suspension and inquiry orders were appealable and that judicial interference was unwarranted at this stage. The Court distinguished this case on the ground of absence of any prima facie material and the petitioner's non-involvement in the alleged irregularity. - Conclusion: The Court held that it could exercise writ jurisdiction at this stage as an exceptional case and quashed the departmental proceeding initiated by the show-cause notice and articles of charge. Issue 2: Validity of departmental proceeding in absence of any imputation of misconduct or misbehavior in the articles of charge - Relevant legal framework: Under Sub-Rule 14(2) of the CCS (CC&A) Rules, 1965, departmental proceedings cannot be initiated without imputing misconduct or misbehavior. The articles of charge must clearly specify the allegations constituting misconduct. - Court's interpretation and reasoning: The Court noted that the articles of charge merely detailed the allegations set forth by the prosecution without framing a separate charge of misconduct or misbehavior against the petitioner. The absence of such imputation rendered the departmental proceeding unsustainable. - Key evidence and findings: The articles of charge focused on alleged overwriting in an assessment order but did not allege any misconduct or misbehavior by the petitioner. The petitioner was not the assessing officer at the relevant time, and no evidence suggested his involvement in any irregularity. - Application of law to facts: Without a charge of misconduct, initiation of departmental proceeding was contrary to the statutory rules governing disciplinary actions. - Treatment of competing arguments: Respondents did not dispute the absence of misconduct allegations but argued that the inquiry was within the authority's jurisdiction and the petitioner could defend himself during inquiry. The Court emphasized that the absence of any charge of misconduct at the threshold stage vitiated the proceeding itself. - Conclusion: The departmental proceeding was held to be invalid and liable to be quashed on this ground. Issue 3: Implication of the petitioner in the departmental proceeding despite not holding relevant posts at the time of passing assessment orders - Relevant legal framework: Disciplinary proceedings must be based on cogent material and correct identification of the delinquent officer. Wrongful implication without basis amounts to abuse of process and violation of principles of natural justice. - Court's interpretation and reasoning: The Court examined the chronology and found that the assessment orders were passed by different officers, and the petitioner was not Superintendent of Taxes at the relevant times. The departmental authority's memo initiating inquiry was based on erroneous assumptions and a communication that did not implicate the petitioner. - Key evidence and findings: Documents showed the petitioner was Inspector of Taxes when the orders were passed. The orders were passed by other named officers. The communication relied upon by the department did not specifically allege any wrongdoing by the petitioner. - Application of law to facts: The departmental proceeding was initiated without any basis to implicate the petitioner, causing mental agony and harassment unjustifiably. - Treatment of competing arguments: The respondents did not dispute the petitioner's non-involvement but maintained the authority to proceed with inquiry. The Court found no satisfactory defense to the petitioner's submissions. - Conclusion: The Court held that the departmental proceeding was misconceived and liable to be quashed for wrongful implication. Issue 4: Validity and scope of suspension order issued against the petitioner pending departmental inquiry - Relevant legal framework and precedents: Suspension pending inquiry is a recognized administrative action. The power to suspend is either expressly conferred or implied as incident to the power of appointment. Suspension can be interim (pending inquiry) or as a penalty. Payment during suspension depends on statutory or contractual provisions. Precedents clarify that suspension pending inquiry is not a punishment but a temporary measure, and courts generally do not interfere unless there is abuse of power or violation of statutory provisions. - Court's interpretation and reasoning: The Court noted that suspension was ordered by the competent authority and is appealable. However, since the departmental proceeding itself was quashed for lack of basis, the suspension order became unsustainable. - Key evidence and findings: The suspension order dated 26.07.2024 was issued after placing the petitioner under suspension pending inquiry. The inquiry was based on flawed grounds. - Application of law to facts: In view of the quashing of departmental proceeding, the suspension order was also revoked as it lacked justification. - Treatment of competing arguments: Respondents argued that suspension was lawful and the petitioner had remedy of appeal. The Court found that since the inquiry was baseless, continuing suspension would cause unwarranted hardship. - Conclusion: The suspension order was revoked along with quashing of departmental proceeding. Issue 5: Scope and limits of judicial review in departmental proceedings and suspension - Relevant legal framework and precedents: Judicial review in disciplinary matters is limited to examining the legality and procedural propriety of the decision-making process. Courts do not adjudicate on the correctness of charges or findings of disciplinary authorities. Interference is warranted only in cases of jurisdictional error, violation of natural justice, or abuse of process. Precedents cited emphasize that writ courts should generally abstain from interfering at the stage of show-cause notice unless exceptional circumstances exist. - Court's interpretation and reasoning: The Court recognized the general principle of judicial restraint but found the present case exceptional due to absence of any charge of misconduct, wrongful implication, and error apparent on the face of record. - Key evidence and findings: The Court relied on documentary evidence showing the petitioner's non-involvement and absence of any misconduct allegation. - Application of law to facts: The Court exercised judicial review to prevent abuse of process and to protect the petitioner from unwarranted harassment. - Treatment of competing arguments: Respondents urged non-interference and reliance on appellate remedies. The Court acknowledged these but distinguished the case on facts. - Conclusion: Judicial review was appropriately exercised to quash the departmental proceeding and suspension order at the preliminary stage. Issue 6: Compliance with principles of natural justice and statutory provisions regarding opportunity to be heard - Relevant legal framework: Section 74(1) of the TVAT Act, 2004 mandates that no rectification enhancing tax liability can be made without notice and reasonable opportunity of being heard. CCS (CC&A) Rules require departmental proceedings to be initiated only after imputation of misconduct and after giving reasonable opportunity to the government servant. - Court's interpretation and reasoning: The Court noted that the petitioner was given the show-cause notice and articles of charge with opportunity to submit written defense. There was no dispute on supply of charge sheet or denial of opportunity. - Key evidence and findings: Documents showed issuance of show-cause notice and articles of charge with no denial of opportunity to the petitioner. - Application of law to facts: Procedural requirements were complied with but substantive foundation for the proceeding was lacking. - Treatment of competing arguments: Respondents contended that procedural safeguards were followed. The Court agreed but emphasized that procedural compliance alone cannot sustain a baseless proceeding. - Conclusion: Procedural requirements were met but the proceeding was quashed on substantive grounds.