A.Selvaraj vs. The District Manager

Facts

The petitioner, A. Selvaraj, filed a writ petition challenging two orders dated December 17, 2019, and December 30, 2019, issued by the District Manager of Tamil Nadu State Marketing Corporation (TASMAC). The impugned orders were show cause notices alleging that the petitioner had charged Rs. 10/- over the Maximum Retail Price (MRP) for certain liquor bottles. The notices called upon the petitioner to remit a sum of Rs. 11,800/- towards penalty and GST and to provide an explanation within two days as to why disciplinary action should not be imposed. The petitioner sought to quash these orders and prevent further action.

Held

The Court held that the show cause notices were predetermined and therefore could not be sustained. The Court found that the notices explicitly stated that the petitioner was liable to pay a penalty and GST, leaving no room for the petitioner to offer a defense or explanation. The Court reasoned that calling upon the petitioner to provide an explanation to a notice that had already concluded the petitioner's guilt would be a futile exercise and a violation of the principles of natural justice. Consequently, the Court quashed the impugned orders. The Court also noted that if the respondent believed disciplinary action was warranted, they could proceed by adopting the proper procedure and adhering to the principles of natural justice. The issue of the specific amount of penalty and GST was not decided on merits.

Key Issues

1. Whether the show cause notices, which predetermine the petitioner's liability to pay penalty and GST, are sustainable in law, particularly concerning the principles of natural justice? The petitioner argued that the show cause notices were predetermined, stating that the petitioner was bound to pay the penalty for alleged overpricing. Therefore, no useful purpose would be served by requiring the petitioner to provide an explanation to such a predetermined notice, justifying interference by the High Court under Article 226 of the Constitution. The respondent, TASMAC, did not present any arguments on this issue.