TMI Blog2020 (12) TMI 1338X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerned District Managers, Supervisors, Salesmen and those who did stock verification. Without conducting any such enquiry and giving the opportunity to the petitioner to explain his case, in a personal hearing, it is not proper for the respondents to arrive at a preconceived manner as if that the amount deposited subsequent to the stock taken by the respondents as shortage amount particularly when the petitioner took a stand that the amount already deposited subsequent to the stock verification is only an after sales occurred between 4.00 p.m. to 6.00 p.m. On 24.03.2020. When the petitioner has taken definite stand that it was only an after sale amount and not a shortage amount, the respondents should not have come to the conclusion arbitrarily without conducting the domestic enquiry as shortage amount. This Court is of the opinion that the impugned order was passed in an arbitrary manner and in violation of the principles of natural justice, without conducting any domestic enquiry as contemplated in the Code and the procedure adopted in the course of decision making process is not as contemplated in the Code, thus, this Court find fault on such decision making process and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... safe custody. 2. The petitioner is working as a Supervisor at TASMAC Shop No. 6547, Keeranur, Pudukottai District. On 24.03.2020, the Government of India announced the lock down throughout the country with effect from 6.00 p.m., due to Novel Coronavirus spread, thus, the petitioner has received instructions from the Managing Director/District Manager that he has to close the Shop at 6.00 p.m. In the normal course, the Shop is closed as per the closing time, in which case, the petitioner used to work for more than two hours from the closing time, to take the details of the stocks available and sale during the day and to close the day accounts and the sale amount shall be remitted on the next working day before 4.00 p.m. 3. In the present case, as the petitioner was compelled to shut down the Shop by 6.00 p.m., the petitioner was decided to close the day account by 4.00 p.m., on 24.03.2020 so as to enable the petitioner to count the total sales amount and to intimate the same to the concerned District Managers through SMS, which is the usual practice that would be followed in the normal course. As there was a huge rush in the shop to buy the liquors by the public, due to the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stock, as per the Code of Prevention and Detection of Fraudulent Acts in Tamil Nadu State Marketing Corporation Limited, 2014. 6. The petitioner has sent a detailed reply to the third respondent stating that the amount paid by the petitioner was not a shortage amount as stated by the respondents Corporation, but it was the amount of sale occured between 4.00 p.m. and 6.00 p.m. on 24.03.3030, as the same was not able to remit immediately due to the reason that the petitioner was compelled to shut down the Shop at 6.00 p.m., on 24.03.2020 and hence, the said amount was kept at the Shop in a safe custody. 7. On 28.07.2020, the third respondent has passed the impugned order, arbitrarily, without providing any opportunity to the petitioner to establish his case, imposing penalty as per Clause 7(b) (xiv) of Prevention and Detection of Fraudulent Acts in Tamil Nadu State Marketing Corporation Limited, 2014 (hereinafter called as Code, 2014). 8. The learned counsel appearing for the petitioner would submit that the third respondent has passed the impugned order, dated 28.07.2020, for recovery of penalty along with interest and GST, without conducting a domestic enquiry. The Distri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he pretext of disciplinary action, without giving any opportunity and without conducting the domestic enquiry, construing the deposit of the after sale amount as shortage amount and imposed the penalty of 50% which is against the procedures set out in the Code and violation of the principles of natural justice. Therefore, the impugned order is liable to be set aside on this ground. 13. Secondly, the learned counsel for the petitioner made a strong objection that the respondent is not entitled to impose GST on the penalty amount under the disciplinary proceedings in terms of Section 7(b)(xiv) of the Code in the absence of any provision in the said Section about the collection of the GST. Hence he submitted that the collection of GST was illegal. 14. Further, one of the counsels viz., Mr.Suresh Kumar, who is appearing in the batch of writ petitions also submitted that in a disciplinary action, no GST can be collected in respect of the penalty imposed under the Code, as the respondent is not entitled to collect the same, without any specific provision in the Code. 15. Mr.R.V.Rajkumar, learned counsel appearing for the petitioners in W.P.(MD).Nos.13770, 13773, 13776 and 13779 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce and Investment Company) (iii ) reported in 2011 (5) SCC 729 (Afjal Imam v. State Bank of Bihar) (iv ) reported in AIR 2008 SC 1831 (UCO Bank vs. Rajinder Lal Capoor) (v) reported in 2010 (1) SCC (L S) 1012 (H.S.Vankani vs. State of Gujarat) and (vi ) reported in 2007(4) L.W. 125 (Rasali vs. Talco Bank) 19. Per contra, Mr. H. Arumugam, learned Standing counsel appearing for the respondents would submit that as per the Rules and Regulations, whatever the sales occurred in the previous day, the Supervisor is required to deposit the sale amount in the next working day before 4.00 p.m. In the present case, admittedly, the petitioner has deposited the sale amount in the next working day, after the lock down, only for the sales made up to 4.00 p.m. and he has not remitted any amount with regard to the sales made between 4.00 p.m. and 6.00 p.m. The petitioner has to inform the same to the respondents as per the Rule framed with regard to the sales made on the particular day. However, in the present case, though the petitioner has informed the sales made up to 4.00 p.m., by way of SMS, he has not informed anything about the sales made between 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficient opportunity to the petitioner to explain his case and the admitted fact need not be proved once again and it is the settled principles of law. Accordingly, the third respondent has imposed the penalty on the petitioner. 21. With regard to the GST, the learned Standing counsel appearing for the respondents has admitted the fact that Section 7(1) (d) of the GST Act has been omitted and the said omitted portion has been inserted in the form of Section 7(1A) of the Act. Therefore, though the third respondent has inadvertently issued the show cause notice by referring to Section 7 (1), it would be construed as a show cause notice issued under Section (1A) for the collection of GST. He would further submit that the petitioner is liable to pay GST, because he has not acted upon as per the advise of the respondents. Therefore, the third respondent has imposed the penalty. Further, the learned Standing counsel appearing for the respondents referred to the judgments with regard to the point for admission made on the part of the petitioner and the same need not be proved once again by way of domestic enquiry and on the aspect of imposition of GST on the penalty. In support of his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... option to close the day stock register, the petitioner was compelled to keep entire sale proceeds in the locker which is available in the shop and closed the Shop at 6.00 p.m. and due to the same, the petitioner was not able to inform the total sales made between 4.00 p.m. and 6.00 p.m. to the District Managers. 24. To avoid the theft and further damage to the stocks available in the shop, as per the instructions of the respondents, the entire stock was transferred to a godown/Marriage Hall. When the shop was allowed to open and transfer the stocks to the respective godowns/marriage hall, where the stock audit was conducted by the respondents and found that there was a shortage in the stocks. When the same was informed to the petitioner, he immediately made reply stating that the said amount is not a shortage but it was after sales amount made between 4.00 p.m. and 6.00 p.m. on 24.03.2020. 25. When the respondents opened the shop for the purpose of shifting the stocks and stock verification, the petitioner had an opportunity to enter into the shop and to verify the collections that have been made, out of the sales occurred in between 4.00 p.m. and 6.00 p.m. on 24.03.202 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the domestic enquiry as shortage amount. 29. At this juncture, it is relevant to refer the investigation procedure laid down in Clause 6 of the Prevention and Detention of Fraudulent Acts in Tamil Nadu State Marketing Corporation Limited, 2014 (hereinafter called as Code), which reads as under:- 6(a)......... (b)......... (c) ....... (d). If the charges are grave and if it is found that the continuance of the employee in service is injurious to the interest of fair investigation / disciplinary proceedings, he may be suspended pending enquiry. In such event, he shall be paid subsistence allowance as per rules. (e). When the person does not admit the charges or the Management is not satisfied with the explanation offered by the person and the charges are sufficiently grave and serious to warrant a punishment other than censure, reprimand or warning, the Management shall conduct a domestic enquiry by any person of its choice. (f)...... (g). At the enquiry, the charge sheeted person will be given the fullest opportunity to cross examine the witnesses, examined on behalf of the Management and also examine witnesses, if any, on his behalf. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing the impugned order in the month of September 2020. The said Section was omitted with effect from 01.02.2019. The respondent, in his counter clearly stated that the notice of collection of GST was issued under Section 7(1) (d) alone. Therefore, without any provision/authority, the third respondent has issued the show cause notice to collect the GST, which is totally illegal. 33. Secondly, even assuming that Section 7(1A) of the Act r/w Rule 5(e) of the Rules will be applicable and the show cause notice was issued in accordance with the said provision, as contended by the learned counsel for the respondents, nowhere either in the show cause notice or in the impugned order or in the counter affidavit, the respondents never ever stated about the applicability of Section 7(1A) r/w Rule 5(e). It would be apposite to mention Section 7(1A), which reads as follows:- 'Agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act.' 34. By referring the above said Section, the respondents submitted that the petitioner refrained from performing to prevent the shortage of supply, so that they have imposed the penalty and as such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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