High Court Rules CVC Cannot Influence Disciplinary Proceedings Without Statutory Enablement

By: Admin
April 30, 2024
Categories: Income Tax|Income Tax News
4 Min Read

A recent ruling by the high court noted that without explicit statutory authority, the Central Vigilance Commission (CVC) lacks the power to impact decisions during various stages of disciplinary actions. This observation came as part of a verdict by a division bench led by Justices Krishna S Dixit and G Basavaraja, which dismissed a collective petition by the Central Board of Direct Taxes (CBDT) and the Ministry of Finance. The petition was challenging a decision by the Central Administrative Tribunal (CAT) in Bengaluru, which on April 17, 2018, had voided a ‘charge-sheet’ in a disciplinary inquiry against Chandrika, who served as an assistant commissioner of income tax in Bengaluru.

Chandrika had been previously found guilty in July 2011 by a special court for CBI cases on charges of corruption for aiding a company to hide Rs 3 crore of income during 2008 assessment processes. It was alleged she had requested a Rs 10 lakh bribe, accepting Rs 2 lakh as an initial installment. This conviction was overturned in August 2013 by the high court, which acquitted her on the grounds that the evidence of demand and acceptance of the bribe was not conclusively proven. An appeal against this acquittal by the CBI to the Supreme Court was later dismissed.

A disciplinary inquiry was set against Chandrika in 2017. In challenging the proceedings, the CBDT contended that the high court’s acquittal of Chandrika was not ‘honourable’, thus they were justified in continuing disciplinary actions against her. Conversely, Chandrika maintained that following her acquittal in the criminal case, continuing with disciplinary actions based on the same allegations was not legitimate.

After reviewing the provided evidence, the division bench remarked that the disciplinary actions were being conducted at the behest of the CVC, an external entity, which was deemed inappropriate as the disciplinary procedures are governed by the Central Civil Services (Classification, Control, and Appeal) Rules, 1965. The judges further referenced a Supreme Court case, Oriental Bank of Commerce vs S Sheokand, highlighting that the imposition of punishment following a CVC report, which was procured by the management, could not dismiss the employee’s concern of being penalized under duress.