Writ petition challenging penalty imposition without prior show cause notice. Court quashed the order for violation of natural justice, directed fresh proceedings, and allowed the petition due to non-leviability of GST on penalties.
Impugned order set aside; respondent at liberty to initiate proceedings afresh after issuing fresh show cause notice.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 05.01.2021
CORAM
THE HONOURABLE DR. JUSTICE ANITA SUMANTH
W.P. No.9432 of 2020
and
WMP Nos.11523 & 11525 of 2020
1.K.Selvamani 2. C.Palanisamy 3.S.Lakshmanasami, 4.D.Srinivasan .. Petitioners
Vs 1.The Managing Director, Tamil Nadu State Marketing Corporation Ltd. (TASMAC), Head Office CMDA Tower – II, IV Floor, Gandhi Irwin Road, Egmore, Chennai-600 008.
2.The Senior Regional Manager, Tamil Nadu State Marketing Corporation Ltd., (TASMAC,) Salem Region, Salem- 16.
3.The District Manager/ Deputy Collector, TamilNadu State Marketing Corporation Ltd.(TASMAC), Salem District.
(Cause title amended vide order dated 23.09.2020 in WMP. No.16606 of 2020) … Respondents
Prayer: Writ Petition filed under Article 226 of the Constitution of India praying to Writ of Certiorarified Mandamus to call for the records pertaining to the impugned order passed by the 3rd respondent in Na. Ka.No.196/ 2020 /A-4/ C.V. dated 22.05.2020 and quash the same and consequently direct the 3rd respondent to consider the Petitioners representation dated 24.06.2020.
For Petitioners : Mr.S.Vinothkumar
For Respondents : Mr.K.Satheeshkumar, Standing Counsel
ORDER
The petitioner challenges order dated 18.05.2020 imposing penalty on account of certain shortages of stocks amounting to Rs.7,95,770/- found in shop No.7215 at Semmanatham, Yercaud, Salem District, maintained by the petitioner. Though the petitioner has raised an objection in regard to the determination of shortages itself, admittedly the amount of Rs.7,95,770/- has been remitted. Moreover, no dispute has been raised by the petitioner in this regard, after having paid the amount as early as on 13.04.2020.
W.P.No12657 of 2020 and batch, order dated 22.02.2021 wherein the levy of GST in identical circumstances has been set aside. The reasoning appears to be that the provisions of Section 7(1) (d) of the GST Act, 2017 which imposes GST on activities to be treated as supply of goods or supply of services as referred to in Schedule II, stands omitted with effect from 01.07.2017. Thus, post 01.07.2017, there can be no levy of GST on the amount of penalty.
No costs. Connected Miscellaneous Petitions are closed.
Sd/-
Assistant Registrar (CS VII)
/TRUE COPY/
Sub-Assistant Registrar
Sl/ska
To
1 The Managing Director,
Tamil Nadu State Marketing Corporation Ltd.
(TASMAC), Head Office CMDA Tower – II,
IV Floor, Gandhi Irwin Road, Egmore,
Chennai-600 008.
2 The Senior Regional Manager,
Tamil Nadu State Marketing Corporation Ltd.,
(TASMAC,) Salem Region, Salem- 16.
PMK(CO) KKN 27.04.2021
3 issues framed by the court
Whether penalty imposed without issuing a show cause notice violates principles of natural justice
Whether GST is leviable on penalties imposed under TASMAC regulations post 01.07.2017
Whether the impugned order setting penalties for stock shortages should be quashed
Colour shows how this judgement treated each authority
Madurai Bench of this CourtReferred¶22
W.P. No.10355 2020 order dated 18.12.2020
R.Sivashanmugam vs. Managing DirectorReferred¶22
R.Sivashanmugam Vs. The Managing Director and Others in W.P.No12657 of 2020
3 provisions across 3 enactments
K.Selvamani
The Managing Director, Tamil Nadu State Marketing Corporation Ltd.
The Senior Regional Manager, Tamil Nadu State Marketing Corporation Ltd.
The District Manager/ Deputy Collector, Tamil Nadu State Marketing Corporation Ltd.
DR. JUSTICE ANITA SUMANTH
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
