S.Doctor Viswanathan Vs State of Tamil Nadu (Madras High Court)
Conclusion: As a Quasi-Judicial authority, if assessee had fulfilled all the requirements that are provided under the relevant section 54 of the Act and the circular, that by itself was sufficient compliance before passing the order of refund of the tax. There was a clear lack of application of mind on the part of the department in justifying the suspension on the ground that assessee did not check or verify the E-way bills, which was not a requirement under the circular No-1/2019-2020 dated 23.3.2020 and the relevant section.
Held: Assessee was working in the post of Commercial Tax Officer, which had now been re-designated as State Tax Officer. He had been assigned the duty of passing orders for refund claims under the statutory forms. One of the refund claims made by Khan Traders was allotted to assessee in March 2023. Khan Traders filed an online application under statutory form RFD-01 on April 19, 2023, claiming a refund. Along with the claim, he also submitted various other documents. Assessee, after verifying the documents and checking the ICEGATE site, was granted a refund under RFD-02 for up to 90% of the total claim. Thereafter, under RFD-05, the balance of 10% was also refunded. The department noted that assessee failed to verify the e-way bills, which would specifically show the movement of the vehicle when it was crossing various tolls. Khan Traders was also attempting to claim a refund of the accumulated input tax credit by playing fraud, and the Directorate of Revenue Intelligence had been warned to withhold any such application after the claim was made. Assessee was placed under suspension by the department since assessee issued a refund to a fake exporter without properly verifying the relevant details with undue haste and with malafide intention. Assessee had caused revenue loss to the government exchequer to the tune of Rs. 6,90,01,127. Assessee challenged the order of suspension mainly on the ground that there were no strong prima facie materials against assessee. There was a clear lack of application of mind on the part of the department in justifying the suspension on the ground that assessee did not check or verify the E-way bills, which was not a requirement under the circular dated March 23, 2020. It was held that nowhere under the Act or under the circular No-1/2019-2020 dated 23.3.2020 was assessee expected to verify the E-way bills physically. If assessee had to be involved in this exercise, obviously he would not be able to process the application and pass orders within a period of seven days. As a Quasi-Judicial authority, if assessee had fulfilled all the requirements that are provided under the relevant Act and the circular, that by itself was sufficient compliance before passing the order of refund of the tax. If for any reasons, it ultimately turned out to be a fake export by a fraudster, the order passed by assessee by itself could not result in the suspension of assessee. There were no strong prima facie materials against assessee to prima facie come to a conclusion that assessee was involved in an act of moral turpitude or grave misconduct. The court, while considering the public interest involved, stated that it would not be desirable to keep assessee at the same station. Therefore, it will be left open to the department to post assessee in some insensitive post in a different place till the completion of the departmental proceeding.
