2017 (1) TMI 867 - HC - VAT and Sales Tax

Punishment of stoppage of increment - it was alleged on petitioner that while he was serving as DCTO at Kottakuppam check-post has accepted the transit passes surrendered by the persons in-charge of vehicles related to movement of oil to Puducherry State without actual movement of vehicle with goods and the said act has been done with the connivance of dealers and thereby caused revenue loss to the Government - there was a collusion between the findings of Enquiry Officer and Disciplinary Authority/respondent. Held that - though the Disciplinary Authority has recorded the finding that the officials have colluded with the tax evaders, the details of the tax evaders and the action taken against him have not been disclosed. In the considered opinion of the Court, the findings recorded by the Disciplinary Authority in the impugned orders are based upon no evidence and as such, the impugned orders warrants interference. In Lav Nigam v. Chairman & MD, ITI Ltd. and another 2006 (4) TMI 538 - SUPREME COURT , it has been held that in case the Disciplinary Authority differs with the view taken by the Inquiry Officer, he is bound to give a notice setting out his tentative conclusions to the delinquent and only after hearing the delinquent, the Disciplinary Authority shall arrive at a final finding of guilt and thereafter, the employee/delinquent would again have to be served with a notice relating to the punishment proposed - Admittedly, the said procedure has been given a complete go-by by the respondent/Disciplinary Authority. Petition allowed - decided in favor of petitioner.

Summary

Issues Involved:
1. Legality of the transfer orders.
2. Validity of the charge memos.
3. Disciplinary Authority's disagreement with the Enquiry Officer's findings.
4. Procedural compliance by the Disciplinary Authority.
5. Reliance on undisclosed documents by the Disciplinary Authority.
6. Inconsistent treatment of similar cases by the Disciplinary Authority.

Issue-wise Detailed Analysis:

1. Legality of the Transfer Orders:
The petitioners challenged the transfer orders dated 07.04.2014, which transferred them from Vellore Division to Trichy Division. The Court noted that the petitioners had filed writ petitions (W.P.Nos.11121 to 11125 of 2014) against these transfer orders, which were stayed by the Court. The transfer orders were ultimately disposed of with certain directions, and the petitioners complied by joining the transferred posts.

2. Validity of the Charge Memos:
The charge memos dated 30.04.2014 alleged that the petitioners, while serving as Deputy Commercial Tax Officers (DCTO) at Kottakuppam check-post, accepted transit passes for vehicles transporting oil to Puducherry without actual movement of goods, causing revenue loss to the Government. The petitioners submitted explanations to these charge memos, and an Enquiry Officer was appointed to investigate the charges.

3. Disciplinary Authority's Disagreement with the Enquiry Officer's Findings:
The Enquiry Officer concluded that the charges were not proved, but the Disciplinary Authority disagreed. The Disciplinary Authority cited reasons for disagreement, including verification of vehicular movement at Anumanthai Toll Plaza and other materials, concluding that the charges were proved. The punishment imposed was the stoppage of increment for one year without cumulative effect.

4. Procedural Compliance by the Disciplinary Authority:
The Court found that the Disciplinary Authority did not follow the established procedure when disagreeing with the Enquiry Officer's findings. According to the Supreme Court's dictum in Lav Nigam v. Chairman & MD, ITI Ltd. [(2006) 9 SCC 440], the Disciplinary Authority must give notice to the delinquent employee setting out tentative conclusions and, after hearing the employee, arrive at a final finding. This procedure was not followed, rendering the Disciplinary Authority's actions procedurally flawed.

5. Reliance on Undisclosed Documents by the Disciplinary Authority:
The Disciplinary Authority's decision was based on certain documents and records not disclosed to the petitioners. The Court noted that no oral evidence was let in, and no documents were marked during the enquiry. The reliance on undisclosed documents and circumstantial evidence without proper disclosure to the petitioners was deemed unsustainable by the Court.

6. Inconsistent Treatment of Similar Cases by the Disciplinary Authority:
The Court observed that three Office Assistants, proceeded against on the same set of allegations, were exonerated by the Disciplinary Authority, who accepted the Enquiry Officer's findings in those cases. This inconsistent treatment, where the petitioners were punished while others were not, further highlighted the arbitrary nature of the Disciplinary Authority's actions.

Conclusion:
The Court concluded that the Disciplinary Authority's findings were based on no evidence and were procedurally flawed. The impugned orders dated 20.07.2016 were set aside, and the respondent was directed to treat the period during which interim stay orders were in force as duty period with all service and monetary benefits. The respondent was also instructed to pass appropriate orders in accordance with the law within six weeks. The writ petitions were allowed, and no costs were imposed.