Iyyappan vs. The Senior Divisional Manager

Facts

The petitioner, a Supervisor at TASMAC Shop No.7739, challenged an order dated 19.05.2020 issued by the second respondent (Deputy Collector/District Manager, TASMAC). The order imposed a penalty of Rs.1,52,000/- for alleged stock shortage and directed the petitioner to pay Rs.96,854/- including 18% GST interest within two days. The petitioner contended that the order was passed without issuing a show cause notice or providing an opportunity to be heard. The respondents, through their Standing Counsel, admitted that the impugned order was issued without a show cause notice and stated that it, along with similar orders, had been withdrawn by a common circular dated 22.06.2020 issued by TASMAC Headquarters. They also submitted that a subsequent show cause notice was issued on the same day as the impugned order.

Held

The Court noted that the impugned order dated 19.05.2020 had been admittedly withdrawn by the respondent TASMAC through a subsequent circular dated 22.06.2020. Therefore, the validity of the impugned order did not require examination by the Court. Regarding the respondents' claim that a subsequent show cause notice was issued, the petitioner denied receiving it. To resolve this controversy, the Court directed the respondent TASMAC to send a copy of the subsequent show cause notice to the petitioner. Upon receipt, the petitioner was granted 15 days to submit a reply. The respondent TASMAC was then directed to pass a further order after considering the petitioner's explanation. The Court disposed of the writ petition with these directions.

Key Issues

1. Whether the impugned order dated 19.05.2020, imposing penalty and GST interest for alleged stock shortage, is liable to be quashed on the ground of violation of principles of natural justice, specifically the absence of a show cause notice and an opportunity to be heard, as per Article 226 of the Constitution of India. Petitioner's Argument: The petitioner argued that the impugned order was passed without providing a show cause notice and an opportunity to present their case, thus violating fundamental procedural fairness. Respondents' Argument: The respondents conceded that the impugned order was issued without a show cause notice. They further submitted that the said order had been withdrawn by a subsequent circular dated 22.06.2020. They also claimed that a show cause notice was subsequently issued to the petitioner regarding the stock shortage.