Justices M.S. Ramesh and V. Lakshminarayanan agreed with the government’s stance that the CAT had overstepped its jurisdiction. The Bench observed that while the Tribunal could have remanded the matter for compliance with natural justice, it could not quash the proceedings altogether and

Taxcan news Failure to Disclose… Failure to Disclose Acquisition of Family Property: Madras HC Sets Aside CAT Order Granting Notional Promotion to Customs Officer It was also clarified if the officer is ultimately exonerated, the Court directed that he must be granted notional promotions and retirement benefits without forcing him to re-approach the Tribunal. The Madras High Court has set aside an order of the Central Administrative Tribunal (CAT), Chennai Bench, which had quashed disciplinary proceedings and granted notional promotions to a senior Customs officer. The Court held that the Tribunal erred in intervening prematurely when the disciplinary process had not yet reached its logical conclusion. Stay Updated with the Latest Audit Report Formats & Audit Trials Requirements! V. Kannathasan, the respondent in the present case, who joined service as an Appraiser in 1994 and rose to the post of Deputy Commissioner by 2010, faced a CBI case in 2009 alleging disproportionate assets under the Prevention ofCorruption Act. Though he was acquitted by the CBI Court in 2018, departmental proceedings were initiated against him through a charge memo issued in December 2016. The charge was that he had failed to disclose acquisition of immovable properties in the names of his close relatives, including his brother, sister, wife, and mother-in-law as well as certain investments, in violation of Rule 18(2) and 18(3) of the Central Civil Services (Conduct) Rules, 1964. The enquiry initially found the charges “not proved”, but upon remand by the disciplinary authority under Rule 15(1) of the CCS (CCA) Rules, 1965, a revised enquiry report partially held the charges proved, particularly with respect to properties acquired by his siblings. Based on this, disciplinary proceedings remained pending. Also Read:GST Dept Must issue Separate Notices for Each Financial Year: Madras HC Strikes Down Bunched Notices for 2018-2024 [Read Order] Despite this, the officer approached the CAT seeking quashing of the charge memo and a direction for notional promotion to the posts of Joint Commissioner (from 2015) and Additional Commissioner (from 2018). The Tribunal allowed his plea, holding that there had been a violation of natural justice and undue delay, and directed that he be extended promotions with consequential benefits. The Union of India challenged this decision before the High Court. The Division Bench of Justices M.S. Ramesh and V. Lakshminarayanan agreed with the government’s stance that the CAT had overstepped its jurisdiction. The Bench observed that while the Tribunal could have remanded the matter for compliance with natural justice, it could not quash the proceedings altogether and substitute its own directions on promotion. The Court clarified that disclosure obligations under Rule 18 of the CCS (Conduct) Rules apply only to family members wholly dependent on the government servant. Since the enquiry report did not establish that the officer’s siblings were dependent on him, the charge required proper consideration by the disciplinary authority, not judicial substitution. The Bench further said that neither the High Court nor the Tribunal can act as a disciplinary authority to impose or negate punishments the matter must be finalized by the competent authority. Accordingly, the High Court set aside the CAT’s order and directed the authorities to complete the disciplinary process within three months, taking into account the CBI Court’s acquittal and the Central Vigilance Commission’s guidelines, which treat non-disclosure as a technical lapse ordinarily warranting only a censure or warning. It was also clarified if the officer is ultimately exonerated, the Court directed that he must be granted notional promotions and retirement benefits without forcing him to re-approach the Tribunal. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates Subscribe Taxscan Premium to view the Judgment Navasree A.M Navasree A M, B.B.A., LL.B. (Hons), a lawyer with over 2.5 years of experience as a researcher and content writer at Taxscan, specializing in Indirect Taxes and Corporate Laws. Madras High Court Central Administrative Tribunal Customs officer Prevention of Corruption Act Next Story Relief for Pidilite: Madhya Pradesh HC Classifies Steel Grip Insulating Tape as ‘Insulator’, Taxable at 5% [Read Order] Madhya Pradesh High Court ruled that Pidilite’s Steel Grip Insulating Tape is an “insulator” taxable at 5%, not under the residuary entry at 12.5-13% By – Kavi Priya | 12 Sept 2025 2:46 PM In a recent ruling, the Madhya Pradesh High Court held that Steel Grip Insulating Tape manufactured by Pidilite Industries Ltd. is to be classified as an “insulator” under Entry 50, Part II, Schedule II of the MP VAT Act and not under the residuary entry attracting a higher rate of tax. Pidilite Industries Ltd., a public limited company engaged in the manufacture and sale of consumer products and specialty chemicals, filed a writ petition challenging the order dated 31 August 2010 passed by the Commissioner of Commercial Tax, Madhya Pradesh. The Commissioner had classified Steel Grip Insulating Tape under the residuary entry of Part IV, Schedule II, thereby levying tax at 12.5 to 13 percent instead of 4 to 5 percent. Also Read:Delhi HC Upholds Exception u/s 40A of Income Tax Act in favour of Mitsubishi Corporation [Read Order] The petitioner’s counsel argued that the product is designed and used only as an insulator to prevent electric shocks and leakage of current, and that it ought to fall under the specific entry for insulators, which attracted the lower rate of tax. They further argued that the Commissioner wrongly relied on a circular without examining the functional character, technical data, and market usage of the product. GST Ruling – A Verdict That Changes Everything – Click Here They also argued that classification under a specific entry must prevail over a residuary entry, and that any determination under Section 70 of the MP VAT Act operates prospectively and cannot justify retrospective demands. The State’s counsel argued that in common parlance insulating tape is understood as an electrical good sold by electrical dealers, not as an insulator, and that classification under VAT should follow commercial understanding rather than technical composition. They pointed out that insulators are a separate category of goods, while insulating tape is only an accessory sold in the general electrical goods market. Also Read:Air Curtains Not Electrical Fans: Madras HC upholds 12% Sales Tax Levy, dismisses Petition of Almonard Limited [Read Order] The Division Bench comprising Justice Vivek Rusia and Justice Binod Kumar Dwivedi observed that the main function of insulating tape is to insulate electrical wires and prevent the escape of current. The court explained that although it also has adhesive properties, these are secondary to its primary insulating function. The court explained that if a commodity falls under a specific entry, classification under a residuary entry must be avoided, and even if there is ambiguity, the entry beneficial to the taxpayer should be applied. The court set aside the Commissioner’s order and held that Steel Grip Insulating Tape is classifiable as an insulator taxable at 5 percent under Entry 50, Part II, Schedule II of the MP VAT Act. The writ petition was allowed with no order as to costs. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates Subscribe Taxscan Premium to view the Judgment Kavi Priya Content writer at Taxscan with a passion for clear, engaging legal content. I simplify tax and law topics while sharpening my research and communication skills. 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