The Additional Chief Secretary (Revenue) vs. Kerala Lok Ayukta

Facts

The petitioners, the State of Kerala and its GST authorities, challenge a report by the Kerala Lok Ayukta. The report set aside an order by the Sales Tax Officer that rejected the complainants' (directors of Welgate Video Pvt. Ltd.) option to settle sales tax arrears under the Amnesty Scheme-2020. The rejection was based on the Tahsildar (RR) having already collected Rs. 1,23,71,421/- through auction and another property auction being processed. The complainants had filed a complaint before the Lok Ayukta seeking to benefit from the Amnesty Scheme and to have the auction proceeds apportioned accordingly. The Lok Ayukta found the rejection discriminatory and illegal, declaring the complainants entitled to the scheme's benefits and recommending apportionment of the auction amount.

Held

The Court held that the Lok Ayukta does not have the jurisdiction to entertain the complaint and adjudicate the correctness of the Sales Tax Officer's order rejecting the option for the Amnesty Scheme-2020. The Court reasoned that the Sales Tax Officer's action in rejecting the application was a quasi-judicial function, and the Kerala Lok Ayukta Act defines 'maladministration' as pertaining only to administrative functions that are unreasonable, unjust, oppressive, or improperly discriminatory. The Court cited previous Division Bench judgments of the Kerala High Court in Sudha Devi K. v. District Collector and State of Kerala v. John Joseph, which established that the Lok Ayukta is not an appellate or supervisory authority over other statutory forums and that erroneous exercise of statutory power does not amount to maladministration. The Court found that the complaint before the Lok Ayukta did not allege or demonstrate maladministration as defined by the Act. Therefore, the Lok Ayukta's report (Ext.P3) was set aside. The Court explicitly stated that it had not adjudicated the correctness of the assessing authority's order, only the Lok Ayukta's jurisdiction.

Key Issues

1. Whether the Lok Ayukta has the jurisdiction to entertain a complaint and adjudicate the correctness of an order passed by the Sales Tax Officer rejecting an option for settling sales tax arrears under an Amnesty Scheme, specifically concerning Section 7(1) read with Section 2(b), 2(h), and 2(k) of the Kerala Lok Ayukta Act, 1999? Petitioner's arguments: The petitioners contended that the Lok Ayukta lacked jurisdiction. They argued that the actions of the GST and Revenue Recovery authorities were not 'maladministration' as defined under Section 2(k) of the Lok Ayukta Act, as they involved statutory and quasi-judicial functions, not administrative ones. They also argued that Section 51 of the Kerala General Sales Tax Act, 1963 (KGST Act) protected officers acting in good faith. Furthermore, they asserted that once revenue recovery proceedings under the Kerala Revenue Recovery Act, 1968, were completed, the complainants could not avail the Amnesty Scheme for the same amount, and that a hierarchy of remedies existed under the KGST Act against the Sales Tax Officer's order. Respondent's arguments: The respondents (legal heirs of the original complainant) argued that the Lok Ayukta had jurisdiction because the Sales Tax Officer's rejection was arbitrary, discriminatory, and resulted in injustice and hardship, constituting maladministration. They contended that the Lok Ayukta could entertain the complaint when the authorities' actions led to such outcomes.