2019 (12) TMI 1491 - HC - GST

Violation of principles of natural justice - opportunity of hearing not provided - Non-payment of penalty and GST - satisfactory explanation for non-payment also not given - HELD THAT - This Court had an occasion to deal with a similar issue in C. SANKAR VERSUS THE TAMIL NADU STATE MARKETING CORPORATION LTD, REP. BY ITS MANAGING DIRECTOR, THE SENIOR REGIONAL MANAGER, TASMAC, THE DISTRICT MANAGER, TASMAC, THIRU. M.R. RAJESHKANNA, SHOP SUPERVISOR, TASMAC 2019 (2) TMI 1929 - MADRAS HIGH COURT , which squarely apply to the facts of the present case. The petitioner has been punished without even giving an opportunity. Without deciding the charge that has been made against the petitioner, the petitioner has been directed to pay the amount and on non payment, the petitioner has also been suspended from service. This clearly constitutes predetermination of the entire issue. The 3rd respondent cannot compel the petitioner to first pay the penalty and GST, and thereafter participate in the enquiry, and on nonpayment cannot suspend the petitioner. This procedure adopted by the 3rd respondent is like putting the cart before the horse. The petitioner is first punished and thereafter he is asked to attend for an enquiry. This clearly goes against the principles of natural justice. The 3rd respondent is directed to issue a fresh show cause notice to the petitioner setting out all the details, within a period of four weeks from the date of receipt of copy of this order. On receipt of the show cause notice from the respondent, the petitioner is directed to submit his explanation/objection and also the documents relied upon by him, within a period of three weeks from the date of receipt of the show cause notice - petition allowed by way of remand.

Summary

Issues:
Challenge to impugned order suspending petitioner from services for non-payment of penalty and GST; Satisfaction of explanation given by petitioner; Application of mind in passing impugned order; Compliance with principles of natural justice.

Analysis:

1. Challenge to Impugned Order:
The writ petition challenged the impugned order suspending the petitioner from services due to non-payment of penalty and GST, based on a show cause notice. The petitioner contended that the entire exercise was pre-determined and lacked proper application of mind. The petitioner argued that without proving the charge of selling liquor above maximum retail price, he should not be directed to pay the penalty and GST. The respondents, however, asserted that the petitioner was misappropriating funds and enriching himself. The Court considered both sides' submissions and reviewed the available records.

2. Compliance with Legal Procedures:
Referring to a previous judgment, the Court emphasized the importance of following due process before imposing penalties or minor punishments. It noted that the impugned order did not provide the petitioner with a show-cause notice or an opportunity to defend himself before the penalty was imposed. The Court found that the petitioner was punished without a fair hearing, indicating a violation of natural justice principles. Consequently, the Court quashed the memorandum and directed the issuance of a fresh show cause notice to the petitioner, allowing him to submit explanations and documents within a specified timeframe.

3. Principles of Natural Justice:
The Court highlighted that the 3rd respondent's actions were akin to prejudging the issue by demanding payment before conducting a proper inquiry. This approach was deemed contrary to the principles of natural justice, as it required the petitioner to pay the penalty and GST before participating in the enquiry. The Court ruled that such a procedure was unfair and ordered the 3rd respondent to follow a more just process by allowing the petitioner to work during the review period.

4. Final Decision and Directions:
In conclusion, the Court allowed the writ petition, quashed the impugned order, and instructed the 3rd respondent to issue a fresh show cause notice to the petitioner within a specified timeframe. The petitioner was granted the opportunity to present his explanations and evidence, following which the competent authority would make a decision in accordance with the law. The Court's decision aimed to ensure that the petitioner's rights were protected and that the principles of natural justice were upheld throughout the proceedings.