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2024 (8) TMI 703 - HC - GSTChallenge to suspension order of State GST officer - petitioner has issued refund to a fake exporter without properly verifying the relevant details - challenge to order of suspension mainly on the ground that there are no strong prima facie materials against the petitioner and that there was a clear non-application of mind on the part of the respondents in justifying the suspension on the ground that the petitioner did not check / verify the E-way bills, which was not a requirement under the circular dated 23.03.2020. HELD THAT - It must be borne in mind that the threshold while dealing with a suspension order passed against an authority exercising a Quasi-Judicial power or a Judicial power, must be slightly at a higher level than the test applied for the authorities who are performing administrative functions. The act of passing orders on the application filed for refund of the Input Tax, is clearly a Quasi-Judicial function. The relevant provision contemplates that the refund claim must be proceeded within a period of seven (7) days from the date of filing of he application for refund. If it is not complied with, it will attract interest and in which case it will also amount to a misconduct for violation of the provisions of the GST Act. Therefore, the authority has to balance the interest of the exchequer and at the same time must process the refund claim within the time stipulated by the Act. As a Quasi-Judicial authority, if the petitioner has fulfilled all the requirements that are provided under the relevant Act and the circular, that by itself is sufficient compliance before passing the order of refund of the tax. If for any reasons, it ultimately turns out to be a fake export by a fraudster, the order passed by the petitioner by itself cannot result in the suspension of the petitioner. In other words, when the petitioner was exercising his Quasi-Judicial function, unless there was a strong prima facie material against the petitioner involving moral turpitude, grave misconduct, etc., suspension must be the last resort. This Court finds that there were no strong prima facie materials against the petitioner to prima facie come to a conclusion that the petitioner was involved in an act of moral turpitude or grave misconduct. This Court is inclined to interfere with the order of suspension passed by the 2nd respondent - the impugned suspension order issued by the 2nd respondent is hereby quashed - Petition allowed.
Issues Involved:
1. Legality of the suspension order issued against the petitioner. 2. Compliance with statutory duties and regulations by the petitioner. 3. Verification and processing of refund claims. 4. Prima facie evidence against the petitioner. 5. Public interest and potential revenue loss. Issue-wise Detailed Analysis: 1. Legality of the Suspension Order: The petitioner challenged the suspension order issued by the 2nd respondent in Proc.No.CD2/5566023/2023 dated 01.11.2023. The court examined whether the suspension was justified, considering the principles laid down in Union of India and another Vs. Ashok Kumar Aggarwal (2013) 16 SCC 147. The court noted that suspension should not be exercised arbitrarily and must be based on a strong prima facie case involving moral turpitude, grave misconduct, or indiscipline. 2. Compliance with Statutory Duties and Regulations: The petitioner, a State Tax Officer, argued that he processed the refund claim of Rs. 69,01,127/- by Khan Traders in strict compliance with Rule 54 of the CGST Rules and the circular dated 23.03.2020. The petitioner verified the documents and checked the ICEGATE site before granting the refund. The court noted that the petitioner followed the prescribed procedures and verified the necessary documents as per the circular. 3. Verification and Processing of Refund Claims: The respondents contended that the petitioner failed to verify the e-way bills, leading to a fraudulent refund claim. The court highlighted that the circular dated 23.03.2020 did not mandate the physical verification of e-way bills. The petitioner had verified the export invoices, shipping bills, ICEGATE, and EPDMS details, which was deemed sufficient compliance. 4. Prima Facie Evidence Against the Petitioner: The court emphasized that for a suspension to be justified, there must be strong prima facie materials against the petitioner. The court found no evidence of moral turpitude or grave misconduct by the petitioner. The petitioner's actions were in line with the statutory requirements and circular provisions. 5. Public Interest and Potential Revenue Loss: The court acknowledged the public interest and the loss to the exchequer due to the fraudulent refund claim. However, it noted that the petitioner's suspension was not justified as there were no strong prima facie materials against him. The court directed the respondents to post the petitioner in an insensitive post in a different station to ensure the departmental proceedings could continue without disruption. Judgment: The court quashed the impugned suspension order dated 01.11.2023 and directed the respondents to post the petitioner in an insensitive post in a different station. The court instructed the respondents to complete the departmental proceedings within three months, ensuring sufficient opportunity for the petitioner to present his case. The writ petition was allowed, and the connected miscellaneous petition was closed with no costs.
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