Suspension in contemplation of inquiry reversed where charge-sheet existed and adverse report predated misconduct; subsistence payable and inquiry time bound.

Suspension imposed in contemplation of inquiry was set aside where the record showed an adverse report pre-dating the alleged misconduct and a charge sheet had already been issued; continuation of suspension after charge-sheeting was held unjustified. Payment of subsistence allowance from the date of suspension was directed subject to applicable rules. The disciplinary authority was ordered to complete the inquiry within specified time frames-finalise proceedings within three months after supply of certified copy and conclude inquiry within three months from the stated date-with adjournments limited to exceptional circumstances and not beyond seven days at a stretch.

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Issues: (i) Whether the suspension order dated 04.08.2025 placing the writ petitioner under suspension in contemplation of inquiry is sustainable; (ii) Whether the writ petitioner is entitled to subsistence allowance for the period of suspension; (iii) Whether the departmental disciplinary proceedings should be directed to be completed within a specified time frame and whether adjournments should be restricted.

Issue (i): Sustainability of the suspension order dated 04.08.2025 placing the writ petitioner under suspension in contemplation of inquiry.

Analysis: The chronology of events shows deemed GST registration on 12.01.2025, physical verification and adverse report by the writ petitioner on 15.02.2025, alleged fraudulent ITC claim on 18.02.2025, issuance of show cause notice on 09.07.2025, cancellation of registration on 24.07.2025 and suspension order dated 04.08.2025; charge sheet had been issued on 01.08.2025. On prima facie consideration of the sequence, the adverse report preceded the alleged fraudulent claim and the disciplinary process was already engaged by issuance of charge sheet.

Conclusion: Suspension order dated 04.08.2025 is set aside (in favour of Assessee).

Issue (ii): Entitlement to subsistence allowance for the period of suspension from 04.08.2025 until the date of the present order.

Analysis: The writ petitioner was under suspension by order dated 04.08.2025 which has been set aside; payment of subsistence allowance for the period of suspension is directed subject to compliance with applicable rules.

Conclusion: The writ petitioner shall be paid subsistence allowance from 04.08.2025 until the date of this order subject to compliance with the Rules (in favour of Assessee).

Issue (iii): Whether departmental disciplinary proceedings should be completed within a stipulated period and whether unnecessary adjournments should be restricted.

Analysis: Charge sheet having been issued, the Court directed the disciplinary authority to conclude inquiry proceedings within time-bound periods: completion of departmental proceedings within three months from production of certified copy of this order and conclusion of inquiry within three months from 27.02.2026; adjournments to be granted only on exceptional circumstances and not beyond seven days at a stretch.

Conclusion: Departmental proceedings are to be concluded within the prescribed time frames and adjournments are restricted as directed (in favour of Assessee).

Final Conclusion: The collective effect of the decision is to restore the writ petitioner to normal service position by setting aside the suspension, to direct payment of subsistence allowance subject to rules, and to mandate a time-bound completion of the disciplinary inquiry with restricted adjournments.

Ratio Decidendi: Where a suspension in contemplation of inquiry is continued after charge-sheeting and the record prima facie shows the officer had submitted an adverse report before the alleged fraudulent act, continuation of suspension is not justified and the disciplinary proceedings must be conducted expeditiously with subsistence allowance payable subject to rules.

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