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Mere Erroneous Exercise Of Judicial Power Sans Extraneous Considerations Not Criminal Misconduct: Kerala HC Grants Relief To Ex-Asst. Tax Commissioner

Hannah M Varghese
12 July 2021 2:54 PM GMT
Mere Erroneous Exercise Of Judicial Power Sans Extraneous Considerations Not Criminal Misconduct: Kerala HC Grants Relief To Ex-Asst. Tax Commissioner
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The Kerala High Court on Monday held that a quasi-judicial order passed by a public servant or a statutory authority which was incorrect or not in favour of the government cannot be sufficient reason to initiate a corruption case or criminal proceedings against them.Justice R Narayana Pisharadi ruled so while quashing the corruption proceedings initiated against a former Assistant Commissioner...

The Kerala High Court on Monday held that a quasi-judicial order passed by a public servant or a statutory authority which was incorrect or not in favour of the government cannot be sufficient reason to initiate a corruption case or criminal proceedings against them.

Justice R Narayana Pisharadi ruled so while quashing the corruption proceedings initiated against a former Assistant Commissioner of Sales Tax on the ground that his orders directing refund to a company as excess tax paid by it caused a loss to the government.

The Court observed in the matter that an erroneous exercise of judicial power, without anything more, would not amount to criminal misconduct. It observed,

"What matters is not the end result of the adjudication. What is of relevance, in attributing criminal misconduct on the part of a public servant who has acted as a quasi judicial authority, is whether he had been swayed by extraneous considerations while conducting the process. The sanctity of decision making process should not be confused with the ultimate conclusion reached by the authority."

It added,

"If the statutory authorities who exercise quasi judicial powers feel that they cannot honestly and fearlessly deal with matters that come before them, then it would not be conducive to the rule of law. They must be free to express their mind in the matter of appreciation of the evidence before them. Unless there are clear allegations of misconduct or extraneous influences or gratification of any kind, criminal proceedings cannot be initiated merely on the basis that a wrong order has been passed by the public servant or merely on the ground that the order is incorrect."

The petitioner was a retired  Assistant Commissioner against whom criminal proceedings were initiated by the Commissioner of Commercial Taxes. The petition was filed with a prayer to quash the said proceedings.

A complaint was filed by the Commissioner on the ground that the the petitioner being the assessing authority deliberately omitted to verify assessment files, audited statement of accounts, revised returns and other records including bank accounts of the private firm before passing the refund order. It was also alleged that he ignored the suppression of turnover made by the company, did not follow the statutory provisions and was violated the directions of the Deputy Commissioner of Commercial Taxes.

The primary question for consideration before the Court was therefore, whether an Assistant Commissioner of the Sales Tax Department, who passes an order of assessment of tax under the Kerala Value Added Tax Act is entitled to get the protection envisaged under the Judges (Protection) Act.

The petitioner argued that since the proceedings were based on acts committed by him in good faith in discharge of his duties under the KVAT Act, he is protected under Section 79 of the Act. Similarly, it was asserted that he was protected under Section 3(1) of the Judges (Protection) Act since the orders of assessment were passed by him as a quasi-judicial authority. 

The Court refused to look into the question of whether the act was committed in good faith, since this was a question of fact, not to be ascertained by the Court in such a proceeding. 

However, the Court examined the second argument of the petitioner in detail. As such, it was initially ascertained that the petitioner qualifies as a `judge` under the Act since the assessment orders he passed are in the nature of definitive judgments in legal proceedings. 

Upon perusal of certain decisions and provisions, the Single Bench also concluded that the assessing authority under the KVAT Act in assessing the tax due from a dealer has to act judicially. His decision does not depend upon his subjective satisfaction.

On the aforementioned grounds, it was established that the petitioner is entitled to get the protection under Section 3(1) of the Judges (Protection) Act, and that the prosecution against him based on the assessment orders passed by him, is theretofore not-maintainable.

The Court additionally observed that "if a public servant, acting as a quasi judicial authority under a statute passes an order and if such order is in favour of a person other than the Government, any pecuniary advantage obtained by such person by virtue of such order, cannot be the basis for prosecution of the public servant under the PC Act, unless there is an allegation that he was actuated by extraneous considerations or oblique motives in passing the order."

The Bench also observed how the prosecution had not raised any allegation of the petitioner accepting a bribe or that assessment orders being passed by him on extraneous considerations. It was held that the "sanctity of decision making process should not be confused with the ultimate conclusion reached by the authority".

Case Title: G. Suresh Kumar v. State of Kerala

Click Here To Read Judgment


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