R. Abdul Azeez vs State of Tamil Nadu, Board of Revenue (CT)

S. Mohan, O.C.J.

The case before us illustrates how persons wielding judicial authority are sometimes subjected to rigorous tests; onerous enough to be engaged

in the discharge of judicial functions, but if these persons are called upon to face disciplinary enquiry for passing wrong orders, of course, without

any motivation, that would be a bad day indeed for them. With these prefactory remarks, we pass on to the facts of the case.

The appellant before us was the Joint Commercial Tax Officer, Salem Town (North) at the relevant time. Hotel Vinayaga, Salem was an

assessee on the file of the appellant. The said Hotel Vinayaga was finally assessed on a turnover of Rs. 3,62,862, by way of best judgment

assessment under S. 12 of the Tamil Nadu General Sales Tax Act. The said assessment was based on a D. 3 proposal sent by the Deputy

Commercial Tax Officer, Salem Town (North). The appellant had also levied a penalty of Rs. 14,970, as proposed. At this juncture, it is relevant

to quote that part of the assessment order which runs thus :-

Recovery of 4 quarter - size note book (ABCD) and 4 bundles of slips (ABCD) revealed certain purchase and sales suppressions for the year

1973-74.

With regard to penalty, he stated that in the pre-assessment notice, he made the last sentence as ''Penalty due for the suppressions of 1-1/2

times, the tax due is Rs. 14,970.''

This assessment was appealed against by the assessee. The Appellate Assistant Commissioner (CT) (Salem North) dismissed the best judgment

assessment made by the appellant. He cancelled the penalty on the ground that the assessing officer (appellant) did not record any specific finding

concerning wilful non-disclosure of turnover which had been suppressed by the assessee. As a result of this, the Government lost a revenue to the

tune of Rs. 14,970, in this case.

For these laches, the then Board of Revenue framed the following charges against the appellant under R. 17(b) of the Tamil Nadu Civil Service

(Classification, Control and Appeal) Rules. The charge was as follows :-

That while working as Assistant Commercial Tax Officer, Salem town (North), he has failed to record specific finding as to the wilful non-

disclosure of the turnover while levying penalty under S. 12(3) of the Act. viz, Tamil Nadu General Sales Tax Act, 1959 in the assessment of The

Hotel Vinayaga for the year 1973-74, which resulted in the Appellate Assistant Commissioner, Salem, setting aside the penalty levied and thereby

caused loss of revenues of Rs. 14,970 to the State.

The appellant submitted his statement of defence. He desired to be heard in person. Accordingly, he was personally heard by the Secretary,

Board of Revenue (CT) Madras on 27th June, 1977. He tried to defend his case by stating (i) that it was by oversight; and (ii) that the ''wilfulness''

need not be stated in explicit terms. In support of this, he also cited certain judgments. However, the Board of Revenue discountenanced the

defence and ultimately came to the conclusion that he be awarded the punishment of stoppage of increment for one year with cumulative effect.

Against this order, he preferred an appeal to the Government. The appeal was dismissed in G.O.Ms. No. 1661, Commercial Taxes and Religious

Endowments Dept, dated 22nd October, 1979. However, the stoppage of increment was directed not to affect the pension of the appellant. This

led the appellant to prefer W.P. 6040 of 1979 to quash the order. There also a stand was taken that the omission to record wilful non-disclosure

was not intentional and in any event, there was no necessity for him to do so.

The learned Judge overruled the plea. A further plea was raised that having regard to the fact that there was judicial proceeding, the appellant

ought not to have been subjected to disciplinary proceedings. This plea was also overruled relying on the decision in Govinda Menon Vs. Union of

India (UOI), .

Mr. N. Ganapathi, learned counsel for the appellant, draws out attention to S. 12(3) of the Tamil Nadu General Sales Tax Act, as it stood prior

to the amendment by Tamil Nadu Act 31 of 1972. Accordingly to him, the disjunctive clause in the amendment, namely, the latter half of S. 12(3)

would not apply to the facts and circumstances of the case; even otherwise, and authorities are clear that if he had found suppression, that would

indicate wilfulness on the part of the assessee.

The next point urged is that in a judicial proceeding, assuming that the appellant had committed a mistake without adverting to the relevant

provision of law or without appreciating the scope of the law, he cannot be called upon to explain the same since against an incorrect order there

are remedies by way of appeal and revision available under the Act; such an order could be corrected only in that matter known to law; of course,

it is a different matter if motivation is alleged as against the appellant; that is not so in this case; the decision reported in Govinda Menon, v. Union

of India (supra), would have no application to the facts of this case; therefore, the rulings mentioned by the learned single Judge cannot be said to

be correct.

The learned Government Pleader in supporting the order with regard to stoppage of increment as confirmed by the learned single Judge would

contend that this is a case in which the appellant himself admitted that he had not cared to look into the correct principles of law because of

oversight; under those circumstances, there was no other go than to take disciplinary action, that such disciplinary action could be taken in the ratio

of the judgment in Govinda Menon v. Union of India (supra)

We do not think that we should embark upon a discussion as to whether it is necessary to render a filing under S. I(3) as amended which was

the relevant law that was in force at the time of the assessment and that there ought to have been a wilful non-disclosure of the turnover because

we propose to dispose of the appeal on a larger and important issue. That was why we made prefactory remarks in the beginning of the judgment.

Here is a case where the appellant was exercising judicial functions conferred on him under the Tamil Nadu General Sales Tax Act. As we

have observed earlier, any order of assessment is subject to appeal and further appeal and also revision. In other words, a hierarchy of authorities

is constituted for correction if the original order of assessment is wrong, even if palpably wrong. So long as the doctrine of judicial immunity

remains, it could at best be stated that he cannot be safely entrusted with the discharge of judicial functions. To say that merely because he passed

a wrong order - this is on the assumption that he passed a wrong order or an inappropriate order - the appellant would be exposed to disciplinary

proceedings is something which we find difficult to comprehend. Such disciplinary proceedings would mean a negation of judicial immunity and

independence because it is not that every order of the original authority is upheld by the Appellate Authority invariably. It may be reversed or it

may be set aside. But on that score, to call upon a judicial functionary which the appellant undoubtedly is, to explain for his lapses, which according

to him, have been caused by inadvertence or error of judgment, which is not disputed by the respondent, is something which will be difficult to

support. Of course, if he had passed a bad order or an order even opposed to elementary principles of law, that is a matter for censure. We would

go to the extent of saying that that could be entered in the confidential file, so as to deprive him increment, promotion etc. However, by no stretch

of imagination, according to us, he could be exposed to the peril of disciplinary proceedings. That precisely is the situation here.

The appellant is crying hoarse that he had failed to look at S. 12(3) or as he understood the case law, there was no necessity to record a

specific finding relating to wilful non-disclosure. That plea failed. In this case, no doubt, the Appellate Assistant Commissioner, namely, the

Appellate Authority, corrected the appellant''s order of assessment. Even at that stage, nothing prevented the Appellate Authority to render a

finding on the materials on record as to whether the assessee had wilfully not disclosed, so as to justify a levy of penalty under S. 12(3) by the

appellant. For reasons best (not ?) known, that was not done. It is relevant to state at this stage that the appellant power is as plenary as the

original power. Therefore, it ought to have been exercised or, at any rate, at least a finding could be called for the by the Assessing Authority as to

why no such finding as to the wilful non-disclosure was rendered. That was not even done. The Appellate Authority merely passed the blame to

the assessing authority and then ultimately says that it was the appellant who was responsible for causing loss of revenue to the State to the time of

Rs. 14790. That is not the correct way of looking at matters. After all the Appellate Authority is there to correct mistakes, sometimes obvious and

sometimes caused by inadvertence. That is the very object of providing a hierarchy of authorities in the Judicial set-up because no man is infallible.

Therefore, where a judicial order can be corrected only by another judicial order by a higher authority and merely because the higher authority

finds that a particular provision has not been looked up by the original authority, we cannot subscribe to the proposition that such original authority

could be proceeded against by way of disciplinary action. But while saying so, we are full aware that it would be an entirely different matter if

dishonesty recklessness, negligence, motivation or even want of good faith is attributed. Fortunately for the appellant, that is not the case against

him.

In this background, we shall now look at the decision in Govinda Menon v. Union of India (supra). That was a case in which the power of

Commissioner under the Hindu Religious and Charitable Endowments Act with regard to sanction had to be exercised with regard to the grant of

lease for more than a period of five years or mortgage or sale. S. 29 of Madras Act 19 of 1951 required sanction for the same. In that case, he

sanctioned the lease for a period of five years without any sanction therefor. For this commission, he was proceeded against under R4(1) of the All

India Service (Discipline and Appeal) Rules 1955. The Rules state that acts and omissions liable to be penalised should be such as to reflect on the

reputation of the officer for his integrity or good faith or devotion to duty. In this case, he was not acting first of all judicially. Strictly speaking, there

was no lease. However, the disciplinary proceedings came to he upheld by the Supreme Court. In so doing, it was observed at page 257 of the

said decision as follows :

... The appellant was proceeded against because in the discharge of his functions he acted in utter disregard of the provisions of the Act and the

Rules. It is the manner in which he discharged his functions that is brought up in these proceedings. In other words, the charge and the allegations

are to the effect that in exercising his powers as Commissioner, the appellant acted in abuse of his power and it was in regard to such misconduct

that he is being proceeded against. It is manifest, therefore, that though the propriety and legality of the sanction to the leases may be questioned in

appeal or revision under the Act the Government is not precluded from taking disciplinary action if there is proof that the Commissioner had acted

in gross recklessness in the discharge of his duties or that he failed to act honestly or in good faith or that he omitted to observe the prescribed

conditions which are essential for the exercise of the statutory power. We see no reason why the Government cannot do so for the purpose of

showing that the Commissioner acted in utter disregard of the conditions prescribed for the exercise of his powers of that he was guilty of

misconduct or gross negligence ...

Therefore, these elements that were present in that case, namely, lack of honesty, good faith, misconduct or gross negligence do not arise in

this case and that is clearly distinguishable.

We also find that the Kerala High Court, in C.S. Kesavan Vs. State of Kerala and Others, has also taken the same view that officers

exercising quasi-judicial functions cannot be subjected to disciplinary proceedings. It is sufficient to extract the headnote therein which runs as

follows :

Officers entrusted with quasi-judicial powers to decide issues arising between citizen and the Government should have the freedom to take

independent decisions in accordance with law, without threat of disciplinary action if their decision go against the interest of the Government. An

order passed by such an officer against the interest of the Government must be challenged by the Government before the appellate or revisional

authority. The Officer passing such order cannot be subjected to disciplinary proceedings.

Accordingly, we uphold the second of the arguments advanced by Mr. N. Ganapathi and hold that there is no scope for taking disciplinary

proceedings against the appellant. Once such a conclusion is arrived at obviously, the imposition of penalty, namely, stoppage of increment as

ordered originally by the Board and later on, as not affecting the pension of the appellant as ordered by the Government in the impugned

Government Order, also will have to be quashed. Accordingly, they are quashed.

The writ appeal will stand allowed setting aside the order of the learned single Judge. The appellant will be entitled to costs. Counsel''s fee Rs.

1,000. Consequent to our judgment, whatever benefits the appellant would be entitled to otherwise, he shall be entitled.