2025 (11) TMI 248 - HC - GST

Suspension set aside as unjustified where employee on childcare and medical leave; inquiry to conclude within three-month deadline

Shriddha Kumari Versus The State of Up And Another

The HC set aside the suspension order of the petitioner, finding prima facie that continuation of suspension was unjustified given the petitioner's ... Suspension of petitioner - suspension on the ground that there happened to be a firm found to be bogus but the writ petitioner did not take steps for cancellation of the GST Registration and also accorded set off ITC, resulting to the fact that there was lost to the State exchequer - HELD THAT:- It is not in issue that the complaint regarding the firm being forged came to be submitted on 29.05.2023 and the writ petitioner proceeded on child care leave from 01.06.2023 to 25.06.2023 and from 26.06.2023 to 22.08.2023 under medical leave and on 22.08.2023, she was transferred to Gorakhpur. The set off which was illegally claimed by the firm is of December, 2023, January, 2024, February, 2024 and March, 2024. Since it is claimed that the writ petitioner was not in the office during the said period when office at Prayagraj when the said set off was claimed thus in the facts and circumstances of the case without delving further, prima facie the Court is of opinion that the continuance of the suspension order would be unjustified. The impugned suspension order dated 2309.2025 passed by the Speical Secretary, State Tax Anubagh-1, U.P. Shashan, Lucknow, respondent no. 1 is set aside - passing of the order would not preclude the disciplinary authority (inquiry authority) to conduct and conclude the proceedings within a period of 3 months from the date of presentation of the certified copy of the order. Petition disposed off. ISSUES PRESENTED AND CONSIDERED 1. Whether the order placing the public servant under suspension can be sustained where the alleged omission (failure to cancel GST registration and prevent claim of input tax credit) arose at a time when the public servant was on authorised leave and later posted elsewhere, and the alleged wrongful claim of set-off occurred months after the reported misconduct. 2. Whether suspension is justified as an interim measure in the circumstances of the case, or whether continuance of suspension would be prima facie unjustified and therefore liable to be set aside while permitting disciplinary inquiry to proceed. 3. What remedial course is appropriate where allegations of misconduct exist but facts show temporal and causal disconnection between the officer's absence/transfer and the later alleged loss to the exchequer. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Validity of suspension given the officer's authorised leave and later transfer, and timing of alleged wrongful set-off Legal framework: Principles governing suspension require that suspension be justified by necessity (e.g., to prevent influence on inquiry, tampering with evidence, or to protect public interest) and not be punitive. Administrative action must account for authorized leave and postings; temporal nexus between alleged dereliction and resultant loss is relevant to the legitimacy of immediate suspension. Precedent treatment: The Court did not cite or apply a specific authority in the text; it proceeded on established administrative-law principles that suspension is an exceptional interim measure and must be examined in the light of factual matrix, including periods of authorised absence. Interpretation and reasoning: The Court found the material facts undisputed: (a) the complaint/report that the firm was bogus was dated 29.05.2023; (b) the public servant was on child-care and medical leave from 01.06.2023 to 22.08.2023; (c) transfer occurred on 22.08.2023; and (d) the alleged wrongful set-off was for December 2023-March 2024 - well after the period of leave and the transfer. The Court emphasised that immediate cancellation of GST registration is not an instantaneous administrative act (a show-cause precedes cancellation), and that the public servant was not in office when the impugned set-offs occurred. On that factual matrix, the Court concluded prima facie there was insufficient causal/temporal connection to justify continuation of suspension. Ratio vs. Obiter: Ratio - where an alleged misconduct arises at a time when the officer was on authorised leave and the alleged loss accrued at a much later date after transfer, continuance of suspension is prima facie unjustified absent material showing of necessity. Obiter - observations on the procedural pace of cancellation (show-cause requirement) and that suspension cannot be sustained as punitive in such circumstances. Conclusion: The suspension could not be sustained on the facts; the Court set aside the suspension order as prima facie unjustified given the officer's authorised absence and the lack of temporal nexus to the alleged later claims of input tax credit. Issue 2 - Permissibility of allowing inquiry to proceed despite setting aside suspension, and delimiting the inquiry timeline Legal framework: Administrative authorities retain the power to conduct disciplinary inquiry even where suspension is set aside. Courts may grant relief against suspension while leaving open the disciplinary process, often directing reasonable timelines for conclusion to balance individual liberty of service with public interest in accountability. Precedent treatment: The Court followed the established approach of permitting inquiry to continue and directing expedition, rather than quashing departmental proceedings outright; no prior case law was expressly cited or overruled. Interpretation and reasoning: While continuance of suspension was found prima facie unjustified, the existence of allegations and an investigation report justified completion of disciplinary proceedings. To protect both service interest and public interest, the Court exercised supervisory power to revoke suspension but ordered the inquiry to be concluded within a defined, reasonable period and required cooperation of parties. Ratio vs. Obiter: Ratio - revocation of suspension does not bar the disciplinary authority from conducting and concluding inquiry; courts may impose a limited timeline for completion (three months in the present case). Obiter - the suggestion that parties must fully cooperate is an applicatory direction consistent with supervisory jurisdiction. Conclusion: The Court set aside the suspension while expressly permitting inquiry to proceed and directing that the disciplinary authority conclude the inquiry within three months from presentation of the certified copy of the order; parties were directed to cooperate. Issue 3 - Appropriate disciplinary response where prima facie case appears weak and misconduct, if any, may attract minor penalty Legal framework: Disciplinary matrices and rules (e.g., State discipline and appeal rules) distinguish between minor and major penalties; suspension is typically associated with serious misconduct or necessity pending inquiry. Courts guard against use of suspension where lesser sanctions or mere inquiry would suffice. Precedent treatment: The Court noted conceptually that at best only a minor penalty might be tenable on the given facts, implying proportionality in disciplinary response, but did not adjudicate final penalty (left to inquiry). No precedent was formally followed or distinguished. Interpretation and reasoning: Counsel for the officer argued that absence from office negated misconduct and that suspension was disproportionate; the State accepted that suspension should be set aside while preserving inquiry. The Court's analysis of facts supported the view that immediate punitive removal from service was not warranted and that if misconduct were established, minor penalty avenues remained open. Ratio vs. Obiter: Obiter - the remark that at best a minor penalty could be imposed on completion of inquiry; not a binding determination of penalty but a comment on proportionality. Ratio - where suspension is disproportionate to prima facie evidence of culpability, relief from suspension is appropriate while inquiry continues. Conclusion: The Court indicated that suspension was disproportionate in the factual matrix and, while not precluding departmental adjudication and minor penalty, ordered revocation of suspension and directed an expedited inquiry process. Relief and Directions (operative conclusions) The Court set aside the suspension order; permitted the disciplinary inquiry to continue and directed its conclusion within three months from presentation of the certified copy of the order; and required parties' full participation and cooperation in the inquiry. These operative directions constitute the Court's dispositive relief while preserving departmental adjudicatory authority to determine culpability and appropriate penalty.