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2021 (7) TMI 693 - HC - VAT and Sales TaxAllegation of corruption against the Assistant Commissioner (Assessment) - Irregularity in passing the assessment order - Whether an Assistant Commissioner of the Sales Tax Department, who passes an order of assessment of tax under the Kerala Value Added Tax Act, 2003, is entitled to get the protection envisaged under the Judges (Protection) Act, 1985? HELD THAT - Section 79 of the KVAT Act has nexus with official acts done under that statute. The section consists of two sub-sections which operate in two different fields. The first sub-section speaks of bar of suits against any officer or servant of the Government, for any act done or purporting to be done under the KVAT Act, without the previous sanction of the Government. The second sub-section deals with liability of an officer or servant of the Government in respect of any such act in any civil or criminal proceeding, if the act was done in good faith in the course of the execution of duties or the discharge of functions imposed by or under that statute - In the instant case, admittedly, sanction for prosecution against the petitioner under Section 19(1) of the PC Act has been granted by the State Government. Once sanction under Section 19(1) of the PC Act has been granted for prosecution against the petitioner, it is not necessary to obtain any separate sanction of the Government under Section 79(1) of the KVAT Act. There can be no doubt with regard to the fact that the assessment orders dated 04.05.2011 and 31.05.2011 passed by the petitioner are in the nature of definitive judgments in legal proceedings. There is no dispute with regard to the fact that the petitioner was empowered by law to pass the assessment orders. In such circumstances, the petitioner, while passing the assessment orders dated 04.05.2011 and 31.05.2011, had discharged functions as a Judge as envisaged under Section 2 of the Act. Whether passing an assessment order under the KVAT Act constitutes an act in the discharge of judicial functions or duties as envisaged under Section 3(1) of the Act? - HELD THAT - The act of the petitioner, passing the assessment orders dated 04.05.2011 and 31.05.2011, as a quasi-judicial authority under the KVAT Act, was an act done or committed by him in the course of discharge of his official or judicial duty or function. Therefore, he is entitled to get the protection under Section 3(1) of the Act. It follows that the prosecution against him, which is based on the assessment orders dated 04.05.2011 and 31.05.2011 passed by him, is not maintainable. Section 55 of the KVAT Act provides for appeal against an order of assessment. As per Clause (i) of Section 55(1) of the KVAT Act, appeal against an order passed by an authority of the rank of an Assistant Commissioner lies to the Deputy Commissioner (Appeals) - In the instant case, it is alleged that the petitioner, who was in the rank of Assistant Commissioner, did not obey the written directions given by the Deputy Commissioner in the matter of assessment of tax. The petitioner, while acting as a quasi-judicial authority, was not bound to obey such directions. Assessment of tax made by him in violation of such directions cannot make him liable for committing any offence. In the present case, the petitioner was the competent authority under the KVAT Act who had the power to assess the tax due from M/s Nano Excel Enterprises. The assessment orders passed by him were in legal proceedings and, therefore, he would be squarely covered under the definition of Judge in Section 2 of the Act which refers to every person who is empowered by law to give a definitive judgment in any legal proceeding - If a public servant, acting as a quasi judicial authority under a statute, passes an order and if such order is in favour of a person other than the Government, any pecuniary advantage obtained by such person by virtue of such order, cannot be the basis for prosecution of the public servant under the PC Act, unless there is allegation that the public servant was actuated by extraneous considerations or oblique motives in passing the order. The petitioner is entitled to get the protection envisaged under Section 3(1) of the Judges (Protection) Act, 1985 in respect of the assessment orders dated 04.05.2011 and 31.05.2021 passed by him and that the prosecution against him, which is based merely on those assessment orders, is barred and not maintainable in law - Petition allowed.
Issues Involved:
1. Whether the Assistant Commissioner of the Sales Tax Department is entitled to protection under the Judges (Protection) Act, 1985. 2. Whether the petitioner is entitled to protection under Section 79 of the Kerala Value Added Tax Act, 2003 (KVAT Act). 3. Whether the prosecution against the petitioner is maintainable under the Prevention of Corruption Act, 1988 (PC Act) and the Indian Penal Code (IPC). Issue-wise Detailed Analysis: 1. Protection under the Judges (Protection) Act, 1985: The petitioner, an Assistant Commissioner (Assessment) in the Commercial Taxes Department, was accused of passing assessment orders in favor of M/s. Nano Excel Enterprises, allegedly causing a loss of ?50,18,606 to the Government. The petitioner claimed protection under Section 3(1) of the Judges (Protection) Act, 1985, arguing that the assessment orders were passed in the discharge of his quasi-judicial functions. The Court analyzed the definition of "Judge" under Section 2 of the Act and concluded that the petitioner, while passing the assessment orders, acted as a "Judge" since he was empowered by law to give definitive judgments in legal proceedings. The Court emphasized that the term "legal proceeding" includes assessment proceedings under the Sales Tax Act. The Court further explained that the assessment orders were definitive judgments in legal proceedings, and the petitioner, while passing these orders, discharged functions as a "Judge" under the Act. The Court also discussed the nature of judicial and quasi-judicial functions, concluding that the petitioner, in assessing the tax due from a dealer, acted judicially. The Court cited various precedents to support the view that tax authorities exercising assessment powers discharge quasi-judicial functions. Consequently, the Court held that the petitioner was entitled to protection under Section 3(1) of the Judges (Protection) Act, 1985, and the prosecution against him based on the assessment orders was not maintainable. 2. Protection under Section 79 of the KVAT Act: The petitioner argued that the prosecution was based on acts done in good faith in the discharge of his duties under the KVAT Act, entitling him to protection under Section 79 of the KVAT Act. Section 79(1) bars suits, prosecutions, or other proceedings against any officer or servant of the Government for any act done under the Act without the previous sanction of the Government. Section 79(2) provides immunity if the act was done in good faith in the course of executing duties or discharging functions imposed by the Act. The Court noted that the State Government had granted sanction for prosecution under Section 19(1) of the PC Act, making it unnecessary to obtain separate sanction under Section 79(1) of the KVAT Act. However, the Court emphasized that the immunity under Section 79(2) is not absolute and applies only to acts done in good faith. The term "good faith" under the General Clauses Act, 1897, means an act done honestly, whether negligently or not. The Court concluded that whether the petitioner acted in good faith is a question of fact that cannot be determined in a proceeding under Section 482 of the Code of Criminal Procedure, 1973. 3. Maintainability of Prosecution under the PC Act and IPC: The prosecution alleged that the petitioner, in conspiracy with other accused, deliberately omitted to verify necessary documents and passed assessment orders in violation of statutory provisions, resulting in a loss to the Government. The petitioner argued that the prosecution was based on acts done in the course of his quasi-judicial functions and was therefore barred under Section 3(1) of the Judges (Protection) Act, 1985. The Court held that the protection under Section 3(1) of the Judges (Protection) Act, 1985, is not subject to the requirement of "good faith" and is intended to ensure judicial independence. The Court rejected the prosecution's contention that the protection is not absolute and does not apply to acts done not in good faith. The Court emphasized that the protection is granted to ensure that judges can perform their functions without fear of consequences, and any erroneous exercise of judicial power, without more, does not amount to criminal misconduct. The Court also noted that there were no allegations that the petitioner accepted bribes or that the assessment orders were passed on extraneous considerations. The prosecution's case was based solely on the allegation that the petitioner did not verify proper documents. The Court concluded that such allegations, without proof of extraneous considerations or oblique motives, cannot form the basis for criminal prosecution under the PC Act or IPC. Conclusion: The Court allowed the petition and quashed the criminal proceedings against the petitioner in C.C.No.6 of 2020 on the file of the Court of the Enquiry Commissioner and Special Judge (Vigilance), Thrissur. The Court held that the petitioner was entitled to protection under Section 3(1) of the Judges (Protection) Act, 1985, and that the prosecution based on the assessment orders was not maintainable.
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