P.Baskaran vs. The District Manager / Deputy Collector

Facts

The petitioner, an employee of a TASMAC shop, collected Rs. 4,45,600 on February 7, 2020. As per rules, this amount was to be remitted the next day, February 8, 2020. However, due to bank holidays on February 8 and 9, 2020, the petitioner remitted the amount on February 10, 2020. The respondent, the District Manager/Deputy Collector, Tamil Nadu State Marketing Corporation, Thanjavur, issued an impugned memorandum on March 4, 2020, imposing a penalty of Rs. 2,56,283, which included GST and interest, on the petitioner. The petitioner challenged this order, stating he had remitted the amount on February 10, 2020, and it was credited the next day, thus not violating any regulations. The respondent's order was passed without verifying bank records.

Held

The Court quashed the impugned order dated 04.03.2020 and remitted the matter back to the respondent for reconsideration. The Court found that the impugned order was passed without verifying the bank records, a fact not controverted by the respondent's counsel. The respondent's counsel conceded that the order could be set aside and remitted. The Court directed the respondent to obtain a report from the bank to ascertain if the petitioner had remitted the amount on February 10, 2020, and if it was credited to the respondent's account on the same day. Only after obtaining these reports and if the respondent decided to proceed, an opportunity of hearing must be given to the petitioner. The ratio is that administrative orders imposing penalties must be based on verified facts and adhere to principles of natural justice, including verification of evidence and providing an opportunity to the affected party.

Key Issues

1. Whether the impugned memorandum dated 04.03.2020, imposing a penalty of Rs. 2,56,283 on the petitioner, is illegal and liable to be quashed, considering the petitioner's claim of timely remittance of sale proceeds and the respondent's alleged failure to verify bank records before passing the order? (Question of mixed law and fact, turning on principles of natural justice and procedural fairness). Petitioner's arguments: The petitioner contended that he had remitted the collected amount on February 10, 2020, and it was credited the following day. He argued that he had not violated any regulations and that the respondent passed the impugned order without verifying the bank records, thus violating principles of natural justice. The petitioner sought to quash the penalty imposed. Respondent's arguments: The respondent's counsel fairly submitted that the impugned order could be set aside and remitted back to the respondent for reconsideration. The respondent agreed to verify bank records and pass a suitable decision after hearing the petitioner.