SBI cannot misinterpret RBI Circulars and Collection of Cash Handling Charges From Stamp Vendors based on its own assumptions is illegal: Madras High Court [Read Order]

SBI - RBI - Cash Handling Charges - Stamp Vendors - Madras High Court - Taxscan

The Madras High Court held that the SBI cannot misinterpret RBI circulars and the Collection of Cash Handling Charges From Stamp Vendors based on its own assumptions is illegal.

The Petitioners, P.S.Shanmuga Sundaram are in the business of vending stamp papers since 1988 and holding valid licenses. The grievance of the Writ Petitioners is that since January 2015, the Respondent, SBI has been illegally demanding the Petitioners to deposit Rs.15/- for every bundle of currency, i.e., a bundle containing 100 notes by remitting in the name of the account as “Commission Account”, for which no receipts or payment challans are issued. The Respondent viz The Director, Treasuries and Accounts Department, Chennai vide letter dated 28.03.2016 addressed the General Manager, State Bank of India to waive off the cash handling charges collected from the stamp vendors, as the Government is paying separately to the banks. The Petitioners are forced to pay Rs. 150 /- to Rs. 200/- as cash handling charges, which have a severe financial impact on the meager commission earned every day.

Mr. M.R.Uma Vijayan, Counsel appearing on behalf of the Petitioners/ Stamp Vendors submit that the Second and Third Respondents /State Bank of India, by misinterpreting the Master Circular issued by the Reserve Bank of India, collecting cash handling charges from the Petitioners, who all are depositing money through Treasury Challans into the Government account.

The single bench of Justice S.M.Subramaniam noted that the Director/ Commissioner of Treasuries and Accounts long back clarified that the collection of cash handling charges is not permissible. The Principal Secretary to Government, Finance, Government of Tamil Nadu has also filed a counter-statement stating that cash handling charges are collected mistakenly by misinterpretation of the circular of the Head Office of the State Bank of India. On the verification of the Master Circulars relied on by the State Bank of India, issued by the Reserve Bank of India on 01.07.2014 and 01.04.2021, it is seen that both circulars are related to agency commission and there is no specific direction or instruction from the Reserve Bank India. Thus, it is not proper on the part of the State Bank of India to collect cash handling charges from the stamp vendors. Accordingly, the Respondents have failed to establish that they have the authority to collect cash handling charges from the stamp vendors, who all are depositing money through Treasury Challans for the purchase of stamps.

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