Court Rules That Good Faith Alone Does Not Bar Disciplinary Action When Prima Facie Misconduct and Financial Prejudice to State Revenue Are Alleged
In a significant judgment dated October 27, 2026, the Division Bench of the Madras High Court, comprising Justices Dr. G. Jayachandran and E. Manoharan, dismissed the intra-court appeal filed by T. Uma, an Assistant Commissioner of State Tax, thereby allowing disciplinary proceedings initiated against her to continue. The case stems from allegations that the appellant, while exercising powers under Section 161 of the Tamil Nadu Goods and Services Tax Act, 2017, exceeded her jurisdiction by reopening concluded assessment orders and drastically reducing tax demands amounting to Rs. 266.46 crores, causing serious prejudice to state revenue.
The appellant challenged the charge memo issued by the Commissioner of Commercial Taxes, contending that her actions were taken in good faith under quasi-judicial powers and that the department's failure to file an appeal against her orders should shield her from disciplinary action. She argued that the charge memo was baseless as it did not allege any illegal gratification or external influence.
However, the court referred extensively to the precedent set by the Supreme Court in Union of India vs. K.K. Dhawan (1993) 2 SCC 56, which clarified that immunity from disciplinary proceedings is not absolute even when a government servant discharges quasi-judicial functions. Disciplinary action can be initiated if there is prima facie material showing recklessness, misconduct, or excess of jurisdiction, or if the conduct reflects on the integrity or good faith of the officer. The court emphasized that the correctness of the order or the department's decision not to appeal is irrelevant to disciplinary proceedings; what matters is the conduct of the officer.
The charge memo listed four articles of charge against the appellant: willful excess of jurisdiction, usurpation of appellate authority, gross financial impropriety causing prejudice to state revenue, and dereliction of duty with lack of integrity in quasi-judicial functions. The court found that these charges disclosed a prima facie case warranting a departmental enquiry and that the appellant must participate and defend herself in such enquiry.
The judgment also referred to the Supreme Court's recent ruling in Amresh Shrivastava vs. State of Madhya Pradesh (2025 SCC Online SC 693), distinguishing between acts done in good faith without misconduct and those involving excess of power causing prejudice. The court clarified that good faith and non-filing of appeal by the department do not per se invalidate disciplinary proceedings when serious allegations exist.
The High Court directed the disciplinary proceedings to be concluded expeditiously, within four months from the date of receipt of the order, thereby ensuring timely resolution of the matter.
This judgment underscores that government officials exercising quasi-judicial functions must adhere strictly to the scope of their statutory powers. It sends a clear message that disciplinary action is permissible and necessary where there is prima facie evidence of reckless or unauthorized exercise of power, especially when it jeopardizes public revenue.
Bottom Line:
Disciplinary proceedings can be initiated against a government servant for acts done in exercise of quasi-judicial powers where charge memo discloses prima facie recklessness, excess of jurisdiction, gross negligence, financial impropriety or conduct unbecoming of a government servant; plea of good faith and non-filing of departmental appeal against order are not by themselves grounds to quash charge memo at threshold.
Statutory provision(s):
Tamil Nadu Goods and Services Tax Act, 2017 Sections 157, 161; Tamil Nadu Civil Services (Disciplinary and Appeal) Rules, Rule 17(b)
T. Uma v. Commissioner of Commercial Taxes, (Madras)(DB) : Law Finder Doc Id # 3012550
