D.Raghu vs R.Basaveswarudu on 5 February, 2020


Supreme Court of India

D.Raghu vs R.Basaveswarudu on 5 February, 2020

Author: K.M. Joseph

Bench: Sanjay Kishan Kaul, K.M. Joseph

                                                                           REPORTABLE



                                  IN THE SUPREME COURT OF INDIA
                                   CIVIL APPELLATE JURISDICTION

                               CIVIL APPEAL NOS. 1970-1975 OF 2009


         D. RAGHU AND OTHERS                                  ...    APPELLANT(S)


                                                 VERSUS

         R. BASAVESWARUDU AND OTHERS ETC.                     ... RESPONDENT(S)

                                                  WITH


                                 CIVIL APPEAL NOS. 1976 OF 2009


                                             J U D G M E N T

K.M. JOSEPH, J.

1. Civil Appeal Nos. 1970-1975 of 2009 and Civil

Appeal No. 1976 of 2009, having been heard together,

and as there are certain common issues, they are

being disposed of by the following common Judgment.

2. In Civil Appeal Nos. 1970-1975 of 2009, the

controversy
Signature Not Verified revolves around the entitlement to
Digitally signed by
ANITA MALHOTRA

promotion to the post of Inspector of Central Excise.
Date: 2020.02.05
18:34:00 IST
Reason:

In Civil Appeal No. 1976 of 2009, on the other hand,

1
the controversy relates to the right to be promoted

to the post of U.D. Clerk and Tax Assistant in the

Central Excise Department. Both these cases arise out

of Original Applications (O.A.s) filed before the

Central Administrative Tribunal (CAT), Hyderabad and

the Orders of the Tribunal in the cases being

questioned in a batch of Writ Petitions. As far as

Civil Appeal Nos. 1970-1975 of 2009 are concerned,

the CAT allowed O.A. 1362 of 2002 and

directed the appellants in Civil Appeal Nos. 1970-

1975 of 2009 to be considered for promotion to the

post of Inspectors. They were originally recruited as

Data Entry Operators (DEOs) Grade ‘A’ and had been

working as Data Entry Operators Grade ‘B’ from the

year 2000. In short, the appellants, as applicants

before the Tribunal, had called in question the

legality of Notice dated 05.11.2002 seeking to

confine the promotion to the post of Inspector, to

category of Tax Assistant, Upper Division

(UD) Clerk, Stenographer Grade-II, etc., with certain

years of experience, for promotion. Six Writ

Petitions came to be filed, including by the Union of

2
India and the official respondents, challenging the

said verdict by which the appellants were also

directed to be considered. A Division Bench of the

High Court proceeded to consider the matter. Justice

G. Bikshapathy wrote an opinion allowing the Writ

Petitions, setting aside the Order of the Tribunal.

The other learned Judge, who constituted the Division

Bench, wrote a separate concurring Judgment, and

thus, the Writ Petitions came to be allowed. What is

found by the High Court is that the Writ Petitioners

were having a legal right, under the erstwhile Rules

which were made in the year 1979, to be considered

for promotion to the vacancies which arose prior to

the Rules which came to be made with effect from

07.12.2002 in regard to the post of Inspector. The

High Court also found that it was only when the Rules

were made in the year 2003 that the restructuring in

the Department, to which the Cabinet gave its

approval on 19.07.2001, came into effect. Regarding

vacancies arising after 07.12.2002, it was left

undecided.

3

3. As far as Civil Appeal No. 1976 of 2009 is

concerned, it arises from O.A. 1040 of 2003, again

decided by the CAT, Hyderabad.

4. The impugned Order of the High Court reveals that

the High Court allowed the Writ Petition filed

against the Order of the Tribunal following the

Judgment of the High Court in the Writ Petitions

which formed the subject matter of the controversy

relating to Inspectors and which is the subject

matter of Civil Appeal Nos. 1970-1975 of 2009. In

other words, following the principle that the

vacancies must be filled-up in accordance with the

extant Rules, the court found that promotions to the

post of U.D. Clerk and Tax Assistant must be effected

on the basis of the rights crystallized under the

1979 Rules, as amended.

A LOOK AT THE RULES
THE 1979 RULES REGARDING POST OF INSPECTOR

5. In 1979, the Rules known as the Central Excise

and Land Customs Department Group ‘C’ Posts

Recruitment Rules, 1979, came to be enacted (in

short, ‘the 1979 Rules’). The Rules were made under

4
Article 309 of the Constitution of India. In the said

Rules, apart from the post of Inspector (Senior

Grade)(inter alia) with a scale of pay of Rs. 550-25-

750-E.B.-30-900, which is shown as a post to be

filled-up by promotion, there is the post of

Inspector (Ordinary Grade). It is this post which has

generated the controversy in Civil Appeal Nos. 1970-

1975 of 2009.

6. The Method of Recruitment is mentioned as

follows: a)75 per cent by Direct Recruitment;

b)25 per cent by Promotion. Column 12, which relates

to the Grade from which Feeder Category for promotion

is shown as follows:

In case of recruitment by
promotion/deputation/transfer
grade from which promotion/
deputation/ transfer to be
made
12
Promotion:

By selection from amongst:

                 (i)    Upper Division
                        Clerks with 5 years
                        service.
                 (ii) Upper         Division
                        Clerks with 13 years
                        of total service as
                        UDC     and    Lower
                        Division Clerk taken

                                   5
      together subject to
      the condition that
      they should have put
      in a minimum of two
      years service in the
      grade     of     Upper
      Division Clerks;
(iii) Stenographers
      (Senior Grade) with
      2 years service.
(iv) Stenographers
      (Senior    Grade)    or
      Steno        (Ordinary
      Grade) with 12 years
      service              as
      Stenographer/ Upper
      Division Clerk and
      Lower Division Clerk
      if      any      taken
      together subject to
      the condition that
      they should have put
      in a minimum of two
      years    service     as
      Stenographer
      (Ordinary Grade) or
      Upper         Division
      Clerk.
(v)   Woman searcher with
      7 years service in
      the grade.
(vi) Draftsman      with    7
      years service in the
      grade.
      Note:       Candidates
      will be required to
      possess            such
      physical      standard
      and      pass      such
      written     test    and
      practical tests and
      confirm to such age
      limits as may be

            6
                             specified   by   the
                             Central   Board    of
                             Excise and Customs
                             from time to time.



THE ELECTRONIC DATA PROCESSING DISCIPLINE                         (GROUP-E

TECHNICAL POST) RECRUITMENT RULES, 1992

7. On 03.04.1992, Rules were made regulating the

method of recruitment for Group ‘C’ (Technical Post)

in the Electronic Data Processing Discipline of the

field formations of the Central Board of Excise and

Customs (CBEC). The posts included the post of Data

Entry Operator Grade ‘A’, Data Entry Operator Grade

‘B’ and the post of Data Entry Operator Grade ‘C’.

Under Rule 5 under the heading “Initial

Constitution”, persons appointed on regular basis as

Key Punch Operator, Terminal Operator and Lower

Division Clerk performing the duties of Terminal

Operator before the commencement of these Rules were

to be deemed to have been appointed as Data Entry

Operator Grade ‘A’ and to rank enblock senior to

those appointed after the commencement of these

Rules. The post of Data Entry Operator Grade ‘A’ was

7
to be filled-up by Direct Recruitment. The

educational qualification was shown as 12th Standard

Pass or equivalent. The post of Data Entry Operator

Grade ‘B’ was to be filled-up by promotion, failing

which, by transfer on deputation. As far as promotion

is concerned, Data Entry Operators Grade-A, with six

years Regular Service in the Grade, were rendered

eligible for being considered for promotion. As far

as Data Entry Operators Grade ‘C’ is concerned, again

the post was to be filled-up by promotion, failing

which, by transfer on deputation, Data Entry

Operators Grade ‘B’, with 3 years Regular Service,

were declared eligible for being considered for

promotion as Data Entry Operator Grade ‘C’. There is

also the post of Data Entry Operator Grade ‘D’, to be

filled-up by promotion, failing which, by transfer on

deputation. Data Entry Operator Grade ‘C’, with four

years regular service, was Feeder Category for

promotion as Data Entry Operator Grade ‘D’.

THE 1996 AMENDMENT TO THE 1979 RULES

8. On 12.07.1996, the 1979 Rules came to be amended.

Under the said amendment, the post of Tax Assistant

8
was included. 1497 posts were shown as the number of

posts, subject to variation dependent on workload.

The scale of pay was indicated as Rs. 1350-30-1440-

40-1800-E.B.-50-2200. The post was to be filled-up by

promotion. The Feeder Category was to be U.D. Clerk,

with three years regular service in the Grade,

subject to their passing of Departmental Examination,

with minimum marks of 40 per cent and above, in each

paper.

THE CENTRAL EXCISE AND LAND CUSTOMS DEPARTMENT
INSPECTOR (Group ‘C’ POSTS) RECRUITMENT RULES, 2002

9. By Notification dated 29.11.2002, Rules were made

in supersession of the 1979 Rules. The Rules are

called the Central Excise and Land Customs Department

Inspector (Group ‘C’ posts) Recruitment Rules, 2002

(hereinafter referred to as ‘Inspector Rules, 2002’,

for short). The Rules were to come into force on the

date of publication in the Official Gazette. It is

not in dispute that the publication of the Gazette is

effected on 07.12.2002.

10. In regard to the post of Inspector (Central

Excise), under Column 11, viz., Method of

Recruitment, the Rules proclaim that 66.23 per cent
9
is to be filled-up by Direct Recruitment and 33.13

per cent is to be filled-up by promotion. Column 12

is significant and we refer to the same. It reads as

follows:

In case of recruitment by
promotion/deputation/absorption,
grade from which promotion/
deputation/ absorption to be
made
12
Promotion:

(a) By selection from those
candidates working in the
following restructured
cadres;

(i) Tax Assistant with 2
years service as Tax
Assistant or 5 years
service as Tax
Assistant and Upper
Division Clerk put
together;

(ii) Upper Division Clerk
or stenographer Grade
III with 5 years
service;

(iii) Upper Division clerk
with 13 years of total
service as Upper
Division Clerk and
Lower Division Clerk
taken together subject
to the condition that
they should have put
in a minimum of 2
years service in the
grade of Upper
Division Clerk;

(iv) Stenographer Grade II

10
with 2 years service;

(v) Stenographer Grade II
or Stenographer Grade
III with 12 years
service as
Stenographer or Upper
Division Clerk and
Lower Division Clerk,
if any, taken together
subject to the
condition that they
have completed a
minimum of 2 years
service as
Stenographer Grade III
or Upper Division
Clerk.

(vi) Woman searcher with 7
years service in the
grade;

(vii) Draftsman with 7 years
service in the grade.

(b) By selection from those
candidates working in the
following restructured
cadre:

(i) Senior Tax Assistant
with 2 years regular
service in the grade;

(ii) Stenographer Grade II
with 2 years regular
service in the grade;

(iii) Women searcher with 7
years service in the
grade;

(iv) Draftsman with 7 years
service in the grade.

(c) Failing the method of
recruitment specified
under Clause (b) above,
by selection from those
candidates working as Tax

11
Assistant and
Stenographer Grade III
having not less than 10
years service including
the service to be
included for this purpose
under the provisions of
the rules regulating the
method of recruitment to
the post of Tax
Assistant:

Note 1 : Promotion under
Clause (a) above shall be
only operative for a period
of two years from the date on
which the restructured cadres
mentioned under Clause (b)
above comes into existence.

The service rendered under
the new grade in the
restructured cadres shall be
counted towards considering
the eligibility for promotion
under Clause (a) above.

Note 2: Candidates shall be
required to pass such written
test as may be determined by
the Central Board of Excise
and Customs from time to
time. The maximum age of
eligibility for the
departmental candidates shall
be 45 years which shall be
relaxable to 47 years in the
case of candidates belonging
to the Scheduled Castes or
Scheduled Tribes category.

However, those of the
officials who were not
considered for such promotion
upto the age of 45 to 47

12
years, as the case may be,
shall be granted the benefit
of relaxation in age limit
upto 50 years in order to
enable a fair opportunity of
a minimum of two chances.

However, those officials who
were considered for promotion
upto the age limit of 45to 47
years, as the case may be, on
two or more occasions and
were not found fit for
promotion shall not be
eligible for this relaxation.

Note 3: Candidates shall be
required to pass physical
tests and confirm the
physical standards as
specified in Column 8.

Note 4: The eligible officers
under Clause (a), (|b) and
9c) above shall be required
to pass through an interview
before promotion.

Note 5: Where juniors who
have completed their
qualifying or eligibility
service are being considered
for promotion, their seniors
would also be considered
provided they are not short
of the requisite qualifying
or eligibility service by
more than half of such
qualifying or eligibility
service or two years,
whichever is less and have
successfully completed their
probation period for
promotion to the next higher

13
grade alongwith their juniors
who have already completed
such qualifying or
eligibility service.

CORRIGENDUM DATED 24TH APRIL, 2003 TO INSPECTOR
RULES, 2002

11. Under the same, in Clause (a) of Column 12, which

we have already extracted, for the word

“restructured” in third line, it was to be read as

“pre-structured”. The result of this amendment is

that Clause (a) under Column 12 of the Inspector

Rules, 2002, was to be read as by selection of those

candidates working in the “pre-structured cadres”.

THE CENTRAL EXCISE AND CUSTOMS DEPARTMENT SENIOR TAX
ASSISTANT (GROUP ‘C’ POSTS) RECRUITMENT RULES,
2003(in short S.T.A. Rules, 2003)

12. The Rules made on 16.01.2003, came into force on

the date of publication of the Gazette and the

publication was effected on 20.01.2003. Rule 5,

around which debate ensued before us, reads as

follows:

“5. Initial constitution.-(i)All
the persons appointed on the
regular basis at the time of
commencement of these rules to the

14
Grade of Assistant, Tax Assistant,
Upper Division Clerk (Special
Pay), Data Entry Operator Grade
‘B’ and ‘C’ shall be deemed to
have been appointed as Senior Tax
Assistants under these rules. The
service rendered by them before
commencement of these rules shall
be taken into account for deciding
the eligibility for promotion to
the next higher grade.

(ii) Assistants(Rs. 5000-8000) and
Data Entry Operator Grade ‘C’ (Rs.
5000-8000) are being redesignated
as Senior Tax Assistants in the
same scale of pay. Therefore, the
Assistants and Data Entry Operator
Grade ‘C’ shall be placed enblock
senior to the other categories.

However, their inter-se-placement
shall be done according to the
date from which they had actually
been appointed to these grades on
regular basis subject to the
condition that their inter se
placement in their respective
category shall not be altered.

(iii) The Data Entry Operator
Grade ‘B’ (4500-7000) and Tax
Assistants (4500-7000) have been
placed in their higher scale of
5000-8000 and they shall be placed
below the Assistant and Data Entry
Operator Grade ‘C’ and their
inter-se placement shall be fixed
in accordance with the date of
regular appointment to the
respective grade subject to the
condition that their inter-se
placement in respective category
shall not be disturbed.

15

(iv) Upper Division Clerk with
special pay shall be placed below
Assistant, Data Entry Operator
Grade ‘c’, Data Entry Operator
Grade ‘B’ Tax Assistants.

(v)The present employees would be
required to pass the required or
suitable departmental examination,
as specified by the Competent
Authority, from time to time, in
Computer Application and relevant
procedures within two years
falling which they would not be
eligible for further increments.”

THE CENTRAL EXCISE AND CUSTOMS DEPARTMENT TAX
ASSISTANT (GROUP ‘C’ POSTS) RECRUITMENT RULES, 2003

13. Lastly, we may notice the Central Excise and

Customs Department Tax Assistant (Group ‘C’ Posts)

Recruitment Rules, 2003, hereinafter referred to as

the 2003, Tax Assistant Rules. Rules are seen to be

made on 02.05.2003 and they came into force on their

publication in the Official Gazette on 05.05.2003.

Rule 4 alone is relevant for our purpose.

“4. Initial Constitution.-(1) The person
appointed on regular basis and holding
the post of Upper Division Clerk and
Data Entry Operator Grade A on the
commencement of these rules shall deemed
to have been appointed as Tax Assistant
under these rules and the service
rendered by such persons in the
respective posts before commencement of
these rules shall be taken into account
as regular service rendered on the post
16
of Tax Assistant for the purpose of
promotion etc.

(2) The person holding the post of Data
Entry Operator Grade -A appointed under
these rules as Tax Assistant shall,
within two years from the date of such
appointment as Tax Assistant, pass the
Departmental Examination as conducted by
the competent authority, falling which
he shall not be entitled to get any
further increment.

(3) Any person, who holds a post of
Lower Division Clerk on regular basis
and falls within the seniority list as
determined by the appointing authority
at the commencement of these rules
shall, on passing the Departmental
Computer Proficiency examination
conducted by the appointing authority,
be deemed to have been promoted with
effect from date of passing such
examination on the post of Tax
Assistant.

(4) The Upper Division Clerks and Data
Entry Operator Grade – A shall be placed
en-block senior and, their inter se
placement shall be fixed in accordance
with the date of regular appointment to
the respective grade subject to the
condition that their inter se placement
in the respective grade shall not
distributed.

(5) Lower Division Clerks shall be
placed below Upper Division Clerks and
Data Entry Operator Grade – A.”

14. The Method of Recruitment is Direct Recruitment

in regard to 90 per cent of the vacancies and 10 per

17
cent posts to be filled-up by promotion. Feeder

categories, in regard to promotion, are shown as

Lower Division Clerks, Head Hawaldars, who had

rendered seven years of service in the Grade on

regular basis and who possesses certain

qualifications which are mentioned therein.
IN-BETWEEN THE RULES

15. On 11.03.1988, one-third of the posts of U.D.

Clerks came to be abolished and a Grade of Tax

Assistant came to be created. Tax Assistants also

became part of the Feeder Cadre to the post of

Inspector, inter alia. On 05.08.1988, Central Board

of Excise and Customs (CBEC) clarified, inter alia,

that Tax Assistants, with two years’ experience in

the Grade or five years’ combined service in U.D.

Clerk and Tax Assistant, were to be eligible for

promotion. Stenographers, Women Searchers, Draftsmen,

etc., were also declared eligible for promotion as

Inspector. They are the old Tax Assistants and not to

be confused with the Tax Assistants under the 2003

Rules.

16. The next crucial development took place in the

following background. The Data Entry Operators

18
performed essentially technical functions and the

very concept was linked with the object of bringing

about computerization in the Department. As noticed

the initial constitution consisted of Key Punch

Operators, Terminal Operators and Lower Division

Clerks performing duties of Terminal Operators, who

were deemed to have been appointed as Data Entry

Operator Grade ‘A’. The Data Entry Operators began to

complain that promotional avenues for Data Entry

Operator Grade ‘A’, which is the entry post, was

limited to promotions as Data Entry Operators Grade

‘B’, ‘C’ and at the top of the pyramid, Data Entry

Operator Grade ‘D’. Persons working in the

Ministerial Cadre, including U.D. Clerks,

Stenographers, etc., were eligible under the 1979

Rules, for being promoted to the Executive Post,

viz., the post of Inspector, inter alia. Data Entry

Operators complained that they would stagnate in the

post of Data Entry Operator for years without

promotion. It would appear that the post of Data

Entry Operator Grade ‘D’ is not available in all the

Commissionerates and only certain Commissionerates

19
had the post of Grade ‘D’. It is pursuant to this

simmering discontent being noticed apparently that

the Union Cabinet decided to go in for cadre

restructuring in the Central Excise and Customs

Department. Since, much may turn on the purport of

the said decision, articulated in letter dated

19.07.2001, we advert to the same:

“I am directed to say that the
Central Government has approved the
restructuring of Customs & Central Excise
Department. As a result of restructuring
there has been a change in the number of
nomenclature of the various grades/ posts.
The revised number and designation of the
various posts at different level in
Customs and Central Excise Department has
been indicated in Annexure – I.

2. All the post at different levels as per
Annexure-I stand sanctioned with immediate
effect. Wherever there is a reduction in
the number of posts at any level, such
reduction will be effective after the
existing incumbents of the posts are
promoted to the higher level or the post
fall vacant on account of retirement etc.
The number of categories of the post other
than those referred to in Annexure ‘I’
have been kept in their existing strengths
and in their existing pay scales only.

3. No direct recruitment may be made to
various grades for the year 2001-2002
without approval of Ministry/ Department
as the Cabinet has approved a one time
relaxation for filling of all vacancies by
promotion in all Cadres.

20

4. The formation-wise distribution of
post at different levels will be notified
separately.

5. The details of the other Posts that
have been included in the restructuring
have not been proposed to be altered on
the scale or strengths are indicated in
Annexure -II.

6. The Cadres/ Post which have not been
included in the Restructuring Proposal are
indicated in Annexure – III.

7. This issue in pursuance to the approval
conveyed vide Cabinet Secretariat note No.
28/CM/2001 (1) dated 16.07.2001.

Yours faithfully

Sd/-

(K.C. Jain)
Dy. Secretary to the Govt. of India

ANNEXURE – I

REVISED NUMBER OF POSTS AT DIFFERENT LEVELS IN THE
CUSTOMS AND CENTRAL EXCISE DEPARTMENT ON
RESTRUCTURING

S.NO. POST EXISTING POST PAY SANCTIONED
PAY REDESIGNATED SCALE STRENGTH
SCALE AS
A’ EXEC

1. Chief 22400- Chief 22400- 47
Commissioner 24500 Commissioner 24500

2. Commissioner 18400- Commissioner 18400- 290
22400 22400

3. Additional 14300- Additional 14300- 300
Commissioner 18300 Commissioner 18300

4. Joint 12000- Joint 12000- 276
Commissioner 16500 Commissioner 16500

5. Deputy 10000- Deputy 10000- 701
Commissioner 15200 Commissioner 15200

6. Assistant 8000- Assistant 8000- 690

21
Commissioner 13500 Commissioner 13500
B’ EXEC

7. SUPDT.CEX/S.I.O 6500- SUPDT. 6500- 9437
/I.O.A.D.D. 10500 10500

8. SUPDT. CUS 6500- SUPDT. 6500- 2520
10500 10500

9. Appraiser 6500- Appraiser 6500- 809
10500 10500
C’ EXEC

10. Inspector/PO/ 6500- Inspectors 5500- 18053
Examiner 9000 9000
A’ MIN

11. CAO 8000- CAO 8000- 155
13500 13500
B’ MIN

12. AO/ACAO/EAO 6500- 6500- 972
10500 10500

13. Sr.PA 6500- Sr.PA 6500-

                        10500                     10500
14.   Programmer        New                       6500-    20
                                                  10500
15.    Others*                                             177
C’ MIN
16.    DOS L-I          5500-        DOS L-I       5500-   631
                        9000                       9000
17.   DOS L-II          5000-        DOS L-II      5000-   1353
                        8000                       8000
18.   DEO-GR. D         5500-        ASTT. PROG    5500-   60
                        9000                       9000
19.   SR. TAX                        NEW           5000-   3152
      Assistant                                    8000
20.   TAX ASSISTANT                  NEW           4000-   5525
                                                   6000
21.   LDC               3050-        LDC           3050-   717
                        4590                       4590
22.   STENO GR. – I     5500-        STENO GR.-I   5500-   244
                        9000                       9000
23.   STENO GR. – II    5000-        STENO GR- II 5000-    490
                        8000                       8000
24.   STENO GR.-III     4000-        STENO    GR.- 4000-   490
                        6000         III           6000
25.   OTHERS*                                              803
C’ EXEC (OTHERS)
26.   DRIVERS – I       4500-        DRIVERS-I    4500-    414
                        7500                      7500
27.   DRIVERS – II      4000-        DRIVERS – II 4000-    526
                        6000                      6000
28.   DRIVERS – III     3200-        DRIVERS-III  3200-    1130
                        6000                      6000
29.   ARMOURER          3200-        ASI (Weapon) 3200-    51

                                22
                      4900                    4900
30.     OTHERS*                                       55
31.     HAVALDAR      2650-        HAVALDAR   2650-   4326
                      4900                    4900
32.     SEPOY         2550-        SEPOY      2550-   9339
                      3540                    3540
33.     OTHERS*                                       1071

TOTAL                                                 65161

           NOTES:

1.The posts in the grade of Supdts. Also
include of S.I.O., A.A.D.I.O. of various
directorates (S.I. No.).

2.The posts in the grade of inspector also
include the post of P.O. and Examiner and
intelligence Officer (S.I. No. 10).

3.The post in the grade of A.O. also include
the post of A.C.A.O. and E.A.O. (Sl. No.

12).

4.The existing post in the cadres of Asst.,
Tax Asst., UDC (Sp Pay), DEO Gr. (C) and
DEO Gr.(B) have been merged into an
redesignated as Sr. Tax Asst. (Sl. No.

19).

5.The existing posts in the cadres of UDC,
DEO(A) and LDC (except 717 posts of LDC
for the promotion of Group D) have been
merged and redesignated as Tax Asstt.
(New) (S.I. No. 20)

6.The cadre of O.S. has been abolished and
the post have been merged in the posts of
A.O. (Sl. No. 19)

7.Other posts which exists in the department
and are not reflected in the above table
have been kept in existing strengths in
the existing pay scales only.

8.Details of Others posts are given in
Annexure II (Sl. No. 15, 25,30 & 33).

Sd…
(K.C.Jain)
Dy. Secretary to Govt. of India”

23

17. On 10.09.2001, the CBEC directed a freeze on

promotion. It reads as follows:

“New Delhi, the 10.09.01

To,

All Chief Commissioners/Commissioners of
Customs and Central Excise,
All Directors Generals/Directors of
Customs and Central Excise
Narcotics Commissioner, C.B.N. Gwalior

Subject: Holding of DPC for promotion to
the grade of Group ‘B’ & ‘C’ in C.B.E.C.
Department – reg.

Sir,

I am directed to say that the issue
of holding of DPCs in respect of Group ‘B’
& ‘C’ posts as well as making direct
recruitment to the various posts pending
distribution of posts of various field
formations is being undertaken by the
Implementation Cell in Pursuant to
sanction issued by Board’s letter F.No.A-
11019/72/99-Ad.IV dated 19.07.2001
conveying the approval of the Cabinet to
the restructuring of Customs and Central
Excise Department has been considered by
the Board.

2. It is felt that if the DPCs for group
‘B’ & ‘C’ are conducted by the cadre
authorities it may lead to widening of
imbalances in promotion prospects or
create imbalances. The Board have,
therefore, decided that the holding of DPC
of group ‘B’ & ‘C’ post may be frozen and
no DPC may be held for Group ‘B’ & ‘C’
post till the distribution of posts under
24
various level is completed and
instructions are issued by the Board in
this regard.

3. As you are aware that Board have
already imposed a ban for filling up of
posts of LDCs and Sepoys vide their letter
F.No. A-11012/27/2000-Ad. IV dated
10.04.2001, it is reiterated that these
instructions may be strictly adhered to
and it is further stated that no direct
recruitment may be made to any grade till
further orders of the Board/ Department of
Revenue.

4. The receipt of this letter may please
by acknowledged.

Yours faithfully,
SD/-

(Y.P. Vashishat)
Under Secretary to the Govt. of India”

18. Thereafter, there is communication dated

19.09.2001, which will be adverted to later on.

19. It is necessary to note what is alleged to be an

Order of the CBEC, lifting the ban on promotion,

dated 03.01.2002:

“New Delhi, the 3rd Jan, 2002
To,
All Chief Commissioners/ Commissioners of
Customs and Central Excise,
All Directors Generals/ Directors of
Customs and Central Excise.

Narcotics Commissioner, C.B.N. Gwalior

Subject: Holding of DPC for promotion to
the grade of Group ‘B’ & ‘C’ in C.B.E.C.
Department – reg.

Sir,

25
I am directed to refer to Board’s
letter of even number dated 10.9.2001
imposing a ban on holding of DPCs for
Group ‘B’ & ‘C’ posts. The Board have
received representations against the
aforesaid ban on promotions.

2. The matter has been considered by the
Board and it has been decided that where
ever the DPC, have already been held, the
panel prepared by the DPCs may be given
effect and the resultant vacancies in the
feeder cadre may also be filled up. Where
the DPCs have not been held, the DPCs may
be held on the basis of pre-revised
strength i.e. the strength existing before
the cadre restructuring and the resultant
vacancies may be filled up.

3. Action may be taken on priority basis
under intimation to the Board.

Yours faithfully,
SD/-

(Y.P. Vashishat)
Under Secretary to the Govt. of India”

20. The communication dated 05.06.2002 by the CBEC

purporting to allocate posts to each zone, and

communicating the sanctioned strength, needs to be

noticed:

“F. No. A-11013/4/2002-Ad.IV

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs

Dated: 05th June, 2002

26
To All Chief Commissioners of Central
Excise and Customs,
All Chief Commissioners of Customs,
All Chief Commissioners of Customs
(Preventive),
All Directors General,
All Directors.

Chief Departmental Representative, CEGAT
Chairman, Settlement Commission.

Subject: Allocation of posts in Group ‘A’,
‘B’, ‘C’ and ‘D’ amongst various
Zones/Commissionerates and
Directorates Gen. / Directorates
– reg.

Sir,

        I   am     directed     to    refer   to
    Ministry’s      letter       F.     No    A-
    11019/72/99-Ad.IV      dated     19th   July
    2001,     notifying        the       revised
    sanctioned     strength     at     different
    levels   in    the    Central     Excise   &
    Customs   department       consequent     to

approval of cadre restructuring of
Central Excise and Customs
departments by the Union Cabinet.

2. I am further directed to say
that the allocation of staff to the
Zones / Commissionerate /
Directorates Gen. / Directorates at
different levels has been decided by
the Board and approved by the
Government has been detailed in the
enclosed Folder. The allocation
indicated herein supersedes all
earlier allocations in respect of the
Cadres/Categories in the enclosed
folder. The number and categories of
posts in the Central Excise & Customs
department other than those referred
to in the enclosed Folder remains
unaltered.

27

3. Separate staff strength has been
allocated for the offices of Chief
Commissioner, Commissioner (Appeals)
and Commissioner (Adjudication) for
which no separate staff had been
allocated till now. The staff
allocated to these formations has
been shown along with the allocation
to the Commissionerate in which city
it is located. The model adopted for
the allocation is indicated in
Annexure – IV of the enclosed folder.

4. I am also directed to request all
Chief Commissioners and other Heads
of Department to carefully study the
details of reorganization of the
Customs and Central Excise formations
and bring to the notice of the Board
any discrepancies or any aspects that
may require review or may not have
been taken into account, to enable
necessary corrective steps may be
taken at an early date with the
approval of appropriate authority.

5. I am further directed to say that
the sanctioned strength now indicated
supersedes all previous sanction
issued so far. The sanctioned
strength now indicated will
accordingly form your sanctioned
strength of Group ‘A’, ‘B’, ‘C’ & ‘D’
posts. As indicated in the preceding
paras, the Chief Commissioners are
requested to study the allocation of
posts within their respective
jurisdiction and send proposal which
are considered necessary within the
overall sanctioned strength provided
to the Commissionerates within their
jurisdiction.

6. I am also directed to inform that
the Cadre Control which is presently
vested with respective Commissioners
in particular Zones will continue to
28
vest with them for the present in
order to ensure that there is no
dislocation in the cadre management
at the field level. Switch over of
cadre control from Commissioners to
Chief Commissioners would be effected
from a date to be specified after the
new formations come into existence.

7. It has been decided to extend the
ban on direct recruitment imposed, in
terms of para 3 of Deptt’s letter F.

No. A-11019/72/99 Ad.IV dated
19.07.2001 upto 31.12.2002. However,
the ban would be applicable only to
the posts that have been included in
the cadre restructuring. It has also
been decided that the ban on direct
recruitment would not apply to
compassionate ground appointments
made with the approval of the Board.

8. The Detailed instructions/ orders/
Recruitment Rules governing the
manner of filling up of the vacancies
at all levels will be issued
separately. No vacancy in respect of
the posts included in the cadre
restructuring should be filled up
till such time as further orders are
issued.

Yours faithfully
Encls.: As above
(Y.P.Vashishat)
Under Secretary to the Govt. of
India”

21. Still further, on 19.09.2002, the CBEC initiated

process for filling-up of vacancies based on the post

restructuring strength and permitting convening of

Departmental Promotion Committees (DPCs) where the

revised Recruitment Rules stood circulated. It was,
29
however, clarified that promotion orders would be

issued only on the directions of the Ministry. That

ban on Direct Recruitment was to continue. The Order

reads as follows:

“New Delhi, Dated 19th September, 2002
To
All Chief Commissioner of Central Excise,
All Chief Commissioner of Customs,
All Chief Commissioners of Customs
(Preventive),
All Director General,
All Directors,
The Chief Department Representative CEGAT
The Chairman, Settlement Commission.

Sir,

Subject: Filling up of posts in Group B, C
and D – reg.

I am directed to refer to Ministry’s
letter F.No.A-11013/4/2002-Ad. IV dated
05.06.2002 on he allocation of posts in
Group ‘A’, ‘B’, ‘C’ and ‘D’ amongst
various Commissionerates and Directoraes
General/ Directorates. So far as Group ‘A’
posts suitable action is being taken by
the Board. As for remaining posts, you
have already been advised o hold DPCs for
promotion to the grade of Superintendents
of Central Excise, Superintendents of
Customs (Prev) vide our letter no.
F.A.600/11/23-2002-Ad. III B dated 26th
June, 2002 and to the grade of AO/ACAO/EOA
Group ‘B’ vide letter F.No.A.32012/3/2002-
Ad.IIB dated 15th July, 2002. The cadre of
O.S. is to be merged with the cadre of
A.O. and all the existing O.S. are only to
redesignated as Administrative Officer.

Since the pay scale of both he cadres is
30
same, the re-designation can be done by an
administrative order.

2. It has now been decided to initiate the
process of filling up of vacancies that
has arisen on account of cadre
restructuring in all remaining cadres up
to Grade ‘B’. You are directed to ensure
that DPCs are converted in respect of all
grades where Recruitment Rules except for
change in the number of posts, as also
grades where revised Recruitment Rules
have been circulated. You may accordingly
hold DPCs immediately for filling up
vacancies in various grades, and ensure
that by 30th September, 2002 the lists are
kept ready. It is clarified that promotion
orders may be issued only on receipt of
further directions from the Ministry.

3. The ban imposed on direct recruitment
in terms of para-3 of letter
F.No.A.11019/72/99-Ad.IV dated 19.07.2001
is applicable up to 31.12.2002. IT is
clarified that this ban applies only to
the posts that have arisen in the cadre
restructuring and that the ban will not
apply to posts in the lower grades which
are not to be filled by promotion, and can
only be filled up by promotion, and can
only be filled up by Direct Recruitment.
Requisite steps for filling up Direct
Recruitment posts may also be initiated
immediately in accordance with existing
instructions on the subject so as to
ensure that Direct Recruitment vacancies
can immediately be filled up after
31.12.2002 of Board’s letter of
05.06.2002.

3. Further, in suppression of the
instruction contained in para 7 & 8 of
Board’s letter of 05.06.2002 the
Commissioners are also permitted to make
compassionate ground appointments as well
as inter Commissionerate transfers, with
the approval of Chief Commissioners, in
31
accordance with existing instructions on
the subject. The instructions contained in
paras (7) & (8) of Board’s letter of even
no. dated 05.06.2002 stand modified to
this extent.

Yours faithfully,
(NISHA MALHOTRA)
Jt. Secy. (Admn.)”

22. The communication dated 28.10.2002 is the next

development. It reads as follows:

“Dated 28th October, 2002

To
All Chief Commissioner of Customs &
Central Excise

Subject: Draft Recruitment Rules –
Circulation of reference and
necessary action-Reg.

        Sir,

            Please     find      enclosed     Draft

Recruitment Rules for Group ‘C’ Posts of
Inspector (Central Excise & Land Customs),
Inspector (Examiner), Inspector
(Preventive Officer) & Senior Tax
Assistant as approved by the Ministry.
Notifications, notifying these Rules will
be issued shortly. Meanwhile you may
initiate the necessary action to start the
process for DPC etc. You may, however,
await issue of notifications before issue
of any orders of promotions based on these
Rules.

Draft of the Recruitment Rules of Tax
Assistants will also be sent shortly as
they are being finalized in consultation
with law Ministry.

Yours faithfully,
Sd……

32
(B.K. Gupta)
O.S.D. (Admn.) CBEC
Enclosures: As above”

23. On 06.11.2002, the Draft Recruitment Rules for

Tax Assistant came to be forwarded with the caveat

that promotion orders be not issued until the Rules

were notified:

“Dated 6th November, 2002

To
All Chief Commissioner of Customs &
Central Excise

Sir,
Subject: Draft Recruitment Rules –
Circulation of reference and necessary
action-Reg.

In continuation of this office letter
dated 28.10.2002 forwarding of Draft
Recruitment Rules of Group “C” Post of
Inspector (Central Excise and land
Customs), Inspector (Examiner), Inspector
(Preventive Officer) & Senior Tax
Assistant, please find enclosed Draft
Recruitment Rules for Tax Assistant (Group
“C”) as approved by the Ministry. The
Notification for notifying these Rules
will be issued shortly. Meanwhile you may
get circulated these Draft Rules to all
the Commissionerates, initiate the
necessary action to start the process for
DPC etc. Confirm the issue of Notification
notifying these Rules before issue of any
order based on these Rules.

Yours faithfully
Enclosures: As above
(B.K. Gupta)
33
O.S.D. (Admn.) CBEC”

24. On 14.11.2002, the CBEC permitted issuance of

promotion orders subject to certain conditions:

“New Delhi the 14th November 2002
To
All Chief Commissioner
All Director General
All Director under CBEC

Subject : Cadre restructuring of
Customer and Central Excise –
regarding promotion in the
Grade ‘B’, ‘C’ and ‘D’ posts.

Sir,
I am directed to refer to Minister’s
letter F. No. A-11013/01/2002-AdIV dated
19th September, 2002 regarding holding of
DPC’s in all grade where Recruitment Rules
Exits, us also in grades where revised
recruitment rules have been circulated. In
terms of Para 2 of the said letter, it was
directed to hold the DPC’s by 30th
September, 2002 and keep the list ready
for issue. It was also clarified that
promotion orders may only be issued on
receipt of further directions from
Ministry.

2. In view of the above, you are
requested to issue the promotion orders in
respect of remaining Group ‘B’, ‘C’ and
‘D’ posts as stated below:-

(i) promotion orders in respect of Sepoy,
Havaldar, Head Havaldar, Tax
Assistant, Senior Tax Assistant and
Inspector of Central
Excise/Preventive Officer/Examiner of
Customs may be issued on the basis of
Recruitment Rules after allotment of
GSR No by the Government of India
Press. Wherever not yet allotted.

34

(ii) DPC in respect of Appraisers and
Administrative Officer may be held on
the basis of existing Recruitment
Rules and promotion orders may be
issued.

(iii)DPC in respect of remaining grades
except DOS L-II may be held on the
basis of existing Recruitment Rules
and Promotion orders may be issued by
25.11.2002.

(iv) Promotion in the grade of DOS L-II
may be made only after the new
recruitment rules are circulated by
the Ministry.

Yours faithfully

(Angra Ram)
Under Secretary to the Government of
India”

25. Thereafter, as already noticed, the Inspector

Rules, 2002 came to be notified on 07.12.2002. We may

further notice that the Senior Tax Assistant (STA)

Rules came to be notified on 20.01.2003. On

21.04.2003, the following decision was taken by the

CBEC:

“New Delhi, the 21st April, 2003
To,
All Chief Commissioners of Central Excise,
All Chief Commissioners of Customs,
All Director Generals,
All Commissioner of Central
Excise/Customs/Directors under CBEC

Subject: Cadre Restructuring of Customs
and Central Excise – Fixation of

35
date of Existence of restructured
cadres-reg.


         Madam,
                I    am   directed    to   say   that

clarification have been sought by field
formations regarding the date of existence
of restructured cadres. The matter has
been examined in the Board and it has been
decided that the restructured cadres would
come into existence from the dates on
which the new/amended rules are notified.

         Accordingly
             (a) The     restructured     cadre    of
                  Inspector     (Central     excise),

Inspector (Preventive Office) and
Inspector (Examiner) came into
effect on and from 07.12.2002
i.e., the date of publication of
Recruitment Rules.

(b) The restructured cadre of Senior
Tax Assistant came into existence
on and from 20.01.2003 i.e. the
date of publication of
Recruitment Rule.

Yours faithfully,
SD/-

(Y.P. VASHISHAT)
Under Secretary to the Govt. of
India”

THE SPATE OF LITIGATION

26. The position, as noticed, led to a scenario where

the erstwhile Data Entry Operators Grade ‘B’ and

‘C’, who came to be re-designated as Senior Tax

Assistants (STAs) and who were not invited to

participate in the promotional exercise for the post

36
of Inspector, launched litigation in various

Tribunals across the country.

THE PROCEEDING IN THE CHANDIGARH TRIBUNAL

27. O.A.1221 of 2002 came to be filed before the

Tribunal at Chandigarh. The applicants were Data

Entry Operators Grade ‘A’, who were promoted in the

year 2000 as Data Entry Operators Grade ‘B’. They

contended that they being Data Entry Operators Grade

‘B’, were deemed to have been appointed as Senior Tax

Assistants and were eligible to be considered for the

post of Inspector. They were also placed in the

higher Grade of Rs.5000 to 8000 and were senior to

the U.D. Clerks. The applicants Complained that

though they were eligible to be considered for

promotion to the post of Inspector, Central Excise

along with the candidates of the pre-structured

cadre, they were not being considered. The Tribunal

found merit in the contention of the applicants and

held as follows:

“10. There is no doubt that the
Data Entry Operators Grade B have now been
redesignated as Senior Tax Assistants
Recruitment Rules, 2002. It is also very
clearly mentioned in the notification in
para 4(i) that the service rendered by
37
them before commencement of these rules
shall be taken into consideration for
deciding the eligibility for promotion to
the next higher grade. According to the
Inspector Recruitment Rules, 2002, under
Clause (b)(i) of schedule to these rules,
Senior Tax Assistants with 2 years regular
service are eligible for consideration for
promotion. In other words, Data Entry
Operators Grade b with 2 years service as
Data Entry Operator and/or Senior Tax
Assistants are eligible promotion. There
is no such condition in the Recruitment
Rules, that the categories of employees
covered under clause (b) under column 12
of the schedule are required to put in 2
years of service exclusively as Senior Tax
Assistant. Their past service as Data
Entry Operators is also required to be
taken into consideration. In fact the
respondents are relying on the provision
made in Note 1 under col.12 to emphasize
that the Senior Tax Assistants will be
considered for promotion only after 2
years from the date of restructured cadres
come into existence. Note 1 reads as
under:

Note 1: Promotion under clause (a) above
shall be operative only for a period of
two years from the date or which the
restructured cadres mentioned under clause

(b) above come into existence.”

A close reading of the above Note would
reveal that it is in respect of employees
covered under Clause (a) and is not
relevant to the employees under Clause

(b). It is therefore, wrong to interpret
the provision made in the above Note that
Data Entry Operators (now redesignated as
Sr.Tax Assistants) are not eligible for
promotion for a period of 2 years. In
fact, Senior Tax Assistant have been given
38
higher grade of Rs.5000-8000 and they are
senior to the UDCs according to the Senior
Tax Assistant Recruitment Rules, 2002,
while UDCs have been considered for
promotion for the post of Inspector, there
does not appear to be any justification
for denying senior Tax assistants their
legitimate right for consideration for
promotion.

11. Note 2 under col.12 specifically
provides that the candidates shall be
required to pass such written test as may
be determined by the Central Board of
Excise and Customs from time to time. The
judgment in the case of Madan Singh & ors
(supra) cited by the learned counsel for
the applicant is, therefore,
distinguishable to the extent that the
departmental examination is prescribed in
the relevant rules in the instant case.
Senior Tax Assistants are, therefore,
required to pass the written test before
they are considered for promotion to the
post of Inspector as has been done in the
case of other categories employees. As Sr.
Tax Assistants are senior to UDCs, they
should also have been given an opportunity
to appear in the departmental written
examination and if they had passed, they
should have been considered for promotion
to the post of Inspector. Non-

consideration of Sr. Tax Assistants for
promotion is, therefore, in violation of
the relevant Rules.”

28. On the basis of the aforesaid discussion, the

Tribunal directed applicants to be considered for

promotion as Inspector, in terms of the relevant

Rules, considering the service rendered by them as

39
Data Entry Operator Grade ‘B’, after giving them an

opportunity to appear in the departmental

examination, as provided in Note 2 in the Schedule to

the Inspector Rules, 2002, inter alia.

29. The next, in the chronological order, is the

Order dated 29.08.2003 passed by the CAT at Bombay.

This decision went against the reasoning adopted by

the Chandigarh Bench, which we have already noted.

However, the High Court of Bombay, by its Judgment

dated 07.10.2003, allowed the Writ Petitions filed

against Order dated 29.08.2003. The High Court found

the reasoning of the Chandigarh Bench appealed to it.

No doubt, it related to filling-up the post of

Inspector (Customs). The Special Leave Petition filed

against the Judgment of the High Court of Bombay came

to be dismissed on 09.02.2004 by this Court. In the

interregnum, CAT, Madras, by Orders dated 04.09.2003

and 12.09.2003, adopted the view accepted by the

Chandigarh Bench. Finally, CAT, Ahmedabad also, by

its decision dated 07.05.2004, accepted the view

propounded by the CAT, Chandigarh.

THE LITIGATION BEFORE US

40
ORIGINAL APPLICATION NO. 1362 OF 2002

30. The applicants, as already noticed, are the

appellants in the Civil Appeal Nos. 1970-1975 of

2009. They approached the Tribunal on the following

allegations, inter alia. They had been appointed as

Data Entry Operator Grade ‘A’ between October, 1993

to March, 1994. On completion of six years’ service,

they came to be promoted as Data Entry Operator Grade

‘B’. After completing the desired computerization,

they were entrusted with regular work relating to the

Executive Side. This included technical work,

statistics, preventive audit and other legal work.

They claimed that they were at par with the existing

Tax Assistants. After the Fifth Central Pay

Commission, they stood equated with the Tax

Assistants. There were grievances raised relating to

promotional avenues not being on par as between the

Data Entry Operators and the Tax Assistants. There

was reference made to the Order dated 19.07.2001. It

was pointed out that the official respondent had

communicated the Draft Recruitment Rules, which

contained “an unconscionable condition”. The
41
unconscionable condition referred to was the

incorporation of Clause (a) that those working as Tax

Assistants with two years of service, etc., were

given preference for promotion over the restructured

categories. They contended that Order dated

19.07.2001 had already come into force. They pointed

out that there was no meaning in considering the pre-

structured Cadre of Tax Assistants and U.D. Clerks,

etc., after the restructuring [Apparently, they felt

aggrieved by the invitation to the Tax Assistants and

U.D. Clerks, based on the provisions contained under

2002 Rules (Column 12, Clause (a))]. The proposed

promotion was dubbed as an attempted backdoor entry.

It was only the restructured Cadre of Senior Tax

Assistant (STA) alone, which was eligible for

promotion as Inspector. The pre-structured Cadre

should not be allowed to steal a march over the

applicants, who were already placed in the higher

scale. The unconscionable part of the Rules was

dubbed as violative of Articles 14 and 16 of the

Constitution of India. In the grounds, they attacked

Note 1 to 2002 Rules found in Column 12. The Note was

42
alleged to have given “leverage to the Tax Assistants

and the U.D. Clerks and Stenographers to count their

pre-structured service”. Being new Cadre, they could

not have required period of two years under the

restructured Cadre. The Draft Recruitment Rules were

impugned as being issued with “malafide intention”

for creating avenues for the “ineligible Lower

Division Cadre”. It is also contended that Draft

Rules had not been finalised, and only after

finalisation, the matter could be proceeded with.

31. The reliefs sought were as follows:

“(a) to set aside the intimation letters
C.No.II/3/21/2002 Con. Sec. C.No.

II/3/16/2003-Con. Sec. & C.No.
II/03/52/2002 Estt. All dated 5.11.2002
conducting physical Test/interviews, in
the absence of finalization of draft
recruitment rules, on the basis of the
unconscionable conditions stipulated in
the draft recruitment rules for the
purpose of promoting the in-eligible
candidates, depriving the applicants from
their due promotion to the posts of
inspector of Customs and Central Excise,
declaring the same as arbitrary, illegal,
unwarranted, misconceived, frivolous and
in violation of Articles 14 & 16 of the
Constitution of India.

(b)to set aside that part of recruitment
rules communicated vide F.No. A
12018/48/2000-Ad. III-B dated 28.10.2002
of R-1, incorporating certain
unconscionable conditions under Clause
43

(a), as confirmed vide Gazette of India
Notification dated 29.11.2002 and note(1)
of clause (b) of column 12 of Group ‘C’
Recruitment Rules 2002, for eligibility
condition for promotion to the cadre of
inspector of Customs and Central Excise,
providing illegal opportunities to the
cadres that were existing prior to the
restructured cadre when the restructured
process has already been affected w.e.f.
19.7.2001, giving leverage to the
ineligible candidates to march over the
eligible candidates of DEOs Grade ‘B’
cadre for promotion to the cadre of
Inspector of Customs and Central Excise,
declaring that part of the said draft
rules as arbitrary, illegal, un-warranted,
misconceived, malafide and against the
principles of natural justice and in
violation of Articles 14 & 16 of the
Constitution of India;

(c) to declare that the applicants who
were working as DEOs in Gr. ‘B’ in the
scale 4500-7000 even before re-structuring
deemed to have been merged into the cadre
of Sr. Tax Assistants in the scale of
5000-8000 as enumerated under the
restructured scheme communicated vide R-1
Letter F. No. A-11019/72/99 Ad. IV dated
19.7.2001 communicating the approval of
restructuring by the Ministry with
immediate effect enclosing Annex. I
therewith showing the cadres and the
strength, duly directing the respondents
to consider the cases of the applicants
for promotion to the cadre of Inspectors,
Customs and Central Excise, by way of 100%
promotion under one time relaxation scheme
on par with those Assistants, DEO Grade
‘C’, Tax Assistants, DEO Grade ‘B’ and
UDC(Special Pay), who were redesignated as
Senior Tax Assistants under the
restructuring of cadres who are only to be
44
considered for promotion to the cadre of
Inspectors of Central Excise & Customs;
with all consequential benefits; and be
pleases to pass such other and further
order, or orders as the Hon’ble Tribunal
may deem fit and proper in the
circumstances of the case.”

32. In the reply by the official respondents, it was,

inter alia, pointed out as follows:

The post of Inspector was covered by 1979

Rules. Feeder categories were, as we had noted

earlier. There was, in other words, reference to

the 1979 Rules as amended in 1996. Regarding the

Order dated 19.07.2001, the stand of the

Government was that it was only approval of the

Ministry for restructuring process. It was

contended that it was incorrect to say that the

new Cadre of Senior Tax Assistants and Tax

Assistants were created from 19.07.2001. The

restructuring became effective only after the

formulation of the Recruitment Rules. The Order

dated 19.07.2001 was silent as regards mode of

restructuring and the process after merger. In

regard to the claim of the appellants of parity

with U.D. Clerks, it was pointed out that the

45
appellants could not compare themselves with the

U.D. Clerks for promotion as Inspector. The

initial scale of Data Entry Operator Grade ‘A’

(Entry Post) was Rs.1150-1500 prior to the Fifth

Central Pay Commission, whereas, the pay of U.D.

Clerk was Rs.1200-2040. The educational

qualification required for being an U.D. Clerk

was Graduation. For a Data Entry Operator Grade

‘A’, on the other hand, the educational

qualification was pass in the Intermediate

Course. It was further contended that the nature

of duty was also different. The U.D. Clerks were

selected on staff selection conducted on all-

India basis. The Data Entry Operators Grade ‘A’

were employed through Employment Exchanges. As

far as conditions in Column 12, which were

challenged by the applicants, viz., the

requirement of two years’ service, which was

dubbed as unconscionable, it was contended that

the condition relating to two years’ service was

necessary to cover fair process for different

categories. The Cadre of Inspector was a basic

46
work force. Promotions were effected on the basis

of promotion to the post of Superintendent, on

all-India basis, leading to large number of

vacancies in the post of Inspector. In the Andhra

Pradesh zone, there were 242 vacancies of

Inspector. The applicants, it was contended, did

not fall in the feeder categories. The contention

of the applicants that they were doing various

other works, was denied and it was contended that

the Data Entry Operators were basically doing the

work of data entry and when they were doing the

other work, the nature of work was typing on

computers.

ORDER OF THE TRIBUNAL IN O.A. NO. 1362 OF 2002

33. After setting out the pleadings, noting the

contentions and also the orders passed by the Central

Administrative Tribunal, Chandigarh, the Madras Bench

and also the Division Bench of the Bombay High Court,

the Tribunal proceeded to enter the following

findings, inter alia:

a. The above decisions referred, viz., by

the Tribunals and the Bombay High Court,

47
were found to have been rendered on

careful considerations of the Rules

notified on 29.11.2002. The Tribunal

agreed with the interpretation.

b. The Tribunal proceeded to, therefore,

express its inability to accept the

contention of the respondents that the

action initiated by sending the impugned

intimation letter dated 05.11.2002,

confining the consideration of selection

for promotion to the post of Inspector

only to candidates in the pre-structured

Cadre, was in accordance with the

provisions of the Rules.

34. It is further held that the further contention

of the respondents that the 1979 Rules entitled them

to fill-up the vacancies, could not be accepted,

since the restructuring of the cadres had coming to

effect on 19.7.2001 itself.

35. The existing Assistants, Tax Assistants, U.D.

Clerks (Special Pay), DEOs Grade ‘B’ and ‘C’ were

found to have been merged and re-designated as Senior

48
Tax Assistants (STAs). It was found that the

restructuring cadres came into effect from the date

of issue of letter dated 19.07.2001. Therefore, any

further promotions to be effected from restructured

cadres was to be only in accordance with the Rules

promulgated under Article 309, viz., the Inspector

Recruitment Rules, 2002. It was done in the

supersession of the 1979 Rules. It was found that the

Authorities were not justified in resorting to fill-

up the existing vacancies in 242 posts in the Cadre

of Inspector by following the old Rules of 1979 which

were superseded by the new Rules, by initiating the

process of selection before the new Rules, came to be

notified in the Gazette after the date of

restructuring of cadres came into force i.e. on

19.07.2001, thereby confining the selection only to

the pre-structured category. The Tribunal did not

agree with the contention of the respondents that the

restructuring of the Cadre came into force only with

effect from 16.01.2003 (apparently the date of

publication of the Senior Tax Assistant (STA) Rules).

The contention of the appellants was accepted that

49
the appellants must be deemed to have been absorbed

into the Cadre of Senior Tax Assistants in the scale

of pay Rs. 5000-8000 under the restructured scheme

with effect from 19.07.2001. Therefore, for the

purpose of promotion to the Cadre of Inspector,

appellants became eligible for consideration under

the new Rules framed which came into force with

effect from 07.12.2002. Therefore, the Authorities

were to consider the appellants for promotion to the

cadre of Inspector of Central Excise and Customs

based on the new Rules and not on the basis of the

old Rules prevailing in respect of pre-structured

cadres. Rejecting the contention of the respondents

that the restructuring did not come into effect on

19.07.2001, as the Rules relating to all the

restructured cadres were formulated subsequently, it

was further found that since in Rule 5 of the Senior

Tax Assistant Rules, it has been clarified that the

service rendered by them before the amendment of the

Rules was to be taken into consideration for

promotion to the next higher cadre, it was found that

in view of the said Rules, the Senior Tax Assistants

50
could take into consideration their service as Data

Entry Operator Grade ‘B’, and therefore, Data Entry

Operator Grade ‘B’ with two years’ service in the

said post was eligible for promotion. There was no

condition in Clause (b) that the employees were to

put in two years’ service exclusively as Senior Tax

Assistants. It is further found as follows:

“The learned counsel for the applicants
has also relied upon a decision of the
Supreme Court reported in 1998 SCC (L&S)
page 1075 in the case of Rajasthan Public
Service Commission Vs. Chanan Ram and
another, in support of his contention that
on cadre restructuring coming into force,
the earlier cadres stand abolished. He
further submitted that after merging of
various cadres into restructured cadre of
Senior Tax Assistant, the uniformity of
restructured cadre of Senior Tax Assistant
alone would be eligible for promotion to
the cadre of Inspector of Customs and
Central Excise. It is also pointed out by
him that it is incumbent on the part of
the respondents to work out the placement
of the categories mentioned under sub para
(3)of para 4 of the Recruitments rules of
Senior Tax Assistants for working out the
inter se seniority from among the
integrated cadres and basing on such
seniority, promotion to the cadre of
Inspector of Customs and Central Excise
has to taken place. According to him, even
for the one time measure standard
relaxation by way of 100% by promotion to
the cadre of Inspector of Excise, the
method shown in the recruitment rules of

51
Senior Tax Assistants for the purpose of
inter se seniority placement of various
cadres has to be followed and promotion to
the next higher cadre of Inspector of
Central Excise has to be given on the
basis of such integrated seniority list as
per sub-para (3) of Para 4 of the said
recruitment rules. We agree with the above
contentions of the learned counsel for the
applicants, since we have taken the view
that with effect from 19.7.2001 the
restructuring of Senior Tax Assistants
came into force ad all the earlier cadres
of Assistant, Tax Assistant/ UDC (Spl.

Pay), DEOs Gr. B and C have been merged
and redesignated as Senior Tax Assistant,
the promotion from the said cadre to the
next cadre of Inspector of Customs and
Central Excise is to be considered only on
the basis of the new recruitment rules
which came into force. In this view of the
matter, we find that all the applicants
became eligible for consideration for
promotion to the post of Inspector of
Customs and Central Excise and the service
rendered by them in the predesignated
cadre for two years is also to be taken
into consideration.

The learned Standing Counsel for the
respondents submitted that the selection
process initiated on 5.11.2002 for
promotion to the post of Inspector of
Central Excise and Customs from the other
categories of employees other than the
DEOs Gr.B and Gr.C has been finalised and
the existing vacancies were filled up.
Since it is now found that the applicants
are also eligible for consideration for
the promotion to the said post, we find it
necessary to dispose of this O.A. by
directing the official respondents to
consider the cases of the applicants also
52
for promotion to the post of Inspector of
Customs and Central Excise in terms of the
relevant rules, taking into consideration
the service rendered by them as DEO Gr.B
after giving them an opportunity to appear
in the Departmental Examination as
notified in Note 2 in the schedule to the
Inspector Recruitment Rules 2002 and in
case they are successful and are finally
selected as Inspectors, as per Rules, they
should be promoted as Inspectors and
assign suitably seniority vis-à-vis other
categories of staff who have already been
promoted.

In the result, this O.A. is allowed in
part. The respondents are directed to
consider the cases of the applicants for
promotion to the post of Inspector of
Customs and Central Excise in terms of the
relevant recruitment rules taking into
consideration the service rendered by them
as Data Entry Operators Gr. B after giving
them opportunity to appear in the
departmental examination as provided in
Note 2 in the schedule to the Inspector.
Recruitment Rules, 2002. In case, they are
successful and are finally selected as
Inspectors, as per rules, they should be
promoted as Inspectors and assigned
suitably seniority vis-à-vis other
categories of staff who have already been
promoted by the revision of seniority as
per the provisions of Rule 5 of Rules
relating to recruitment of Grade C Senior
Tax Assistants in the Central Excise and
Customs Department. The declaration sought
for by the applicants in para 8(C) of the
O.A. is granted as prayed for.”

36. As already noticed, the High Court came to the

conclusion that the decision dated 19.07.2001 was an

approval, in principle, for the restructuring. The

53
restructuring came into force with effect from the

date on which Statutory Rules in 2003 were framed. It

was further found that in regard to the existing

vacancies, the erstwhile Rules of 1979 held the field

and governed the parties.

37. We heard learned Counsel for the parties. Shri

C.U. Singh, learned Senior Counsel, led the arguments

on behalf of the appellants. We also heard Shri P.S.

Patwalia, learned Senior Counsel on behalf of the

party respondents and Shri K. Radhakrishnan, learned

Senior Standing Counsel on behalf of the Government

of India besides Shri Sridhar Potaraju, learned

Counsel on behalf of some of the party respondents.

38. The learned Senior Counsel for the appellants,

undoubtedly, after referring to the Rules and the

Government decisions, contended that this is a clear

case where the High Court was in error in proceeding

on the basis that the vacancies must be filled-up on

the basis of the 1979 Rules. He pointed out that the

principle enunciated in Y.V. Rangaiah and others v.

J. Sreenivasa Rao and others1 is, by no means, a

1 (1983) 3 SCC 284

54
universal or unexceptionable norm. The decision was

rendered in the special facts of the case. He drew

our attention to the body of case law flowing from

this Court, which has enunciated the principle that

despite the fact that there exists Statutory Rules

and unfilled vacancies, it is very much open to the

Government, when it is mulling change, to take a

conscious decision, though supported by reasons, to

leave vacancies unfilled and to take a call at a

relevant point of time.

39. As regards the effect of 2002 Rules and the 2003

STA Rules, it was the contention of Shri C.U. Singh

that the Court may bear in mind the backdrop in which

the restructuring came about as persons who were

appointed as Data Entry Operators were found

stagnating in comparison to their colleagues working

in the ministerial cadre. Perceiving merit in their

genuine grievances, the Government decided to

completely restructure. It is accordingly that

certain categories, which included Data Entry

Operator Grade ‘B’ and ‘C’, were designated as Senior

Tax Assistants. This is evidenced by the proceedings

55
dated 19.07.2001. The restructuring attained

completeness from the said decision, as correctly

found by the Tribunal. The Order of the Tribunal has

not been properly appreciated by the High Court, it

is complained. Our attention has been drawn to the

view taken by the Chandigarh Bench and the High Court

of Bombay, in particular. It is further impressed

upon us that this Court lend its seal of approval to

the view expressed by the High Court of Bombay. He

pointed out, thus, that the Tribunal at Chandigarh,

Madras, High Court of Bombay and the Tribunal at

Ahmedabad, have spoken in one voice about the rights

of the erstwhile cadre of Data Entry Operators to be

treated as Senior Tax Assistants. They were entitled

to count their previous service also for the purpose

of calculating the period of two years’ service as

required in the 2002 Inspector Rules for promotion.

40. Per contra, the learned Senior Counsel Shri P.S.

Patwalia, K. Radhakrishnan, Senior Standing Counsel

and Shri Sridhar Potaraju, learned Counsel stoutly

defended the Order of the High Court. It is their

contention that quite apart from the fact that in

56
terms of the principle laid down in Y.V. Rangaiah

(supra) that existing vacancies should be filled-up

under the old Rules, the Data Entry Operators were

not in the feeder categories for promotion as

Inspector under the 1979 Rules in 2002. They come

into Feeder Category for promotion only when the

Rules were framed in the year 2002, which was brought

into force on 07.12.2002. Even proceeding under the

said Rules, Shri P.S. Patwalia would point out that

they would have to gain experience and work for two

years as STA and they were certainly not eligible for

being considered when the Government decided to fill

the vacancies on 05.11.2002. Therefore, apart from

the principle enunciated in Y.V. Rangaiah (supra),

they would make the mark in terms of the Rules only

on completion of two years’ service from January 2003

as Senior Tax Assistants. Our Attention is drawn to

2002 Inspector Rules to point out that what is

required under the said Rules is that the Senior Tax

Assistants, with two years Regular Service in the

Grade, alone, would be eligible. Having regard to the

pay-scale of a Senior Tax Assistant, it is not open

57
to the appellants to contend that the requirement of

Regular Service in the Grade, would be fulfilled, by

taking into consideration the previous service

rendered by them in the erstwhile Cadre of Data Entry

Operator. It is also contended that the Memorandum

dated 19.07.2001 also embodies a decision, in

principle, in this regard. Our attention is drawn to

Memorandums dated 05.06.2002 and 28.10.2002. It is

only on issuance of the Rules that the restructuring

happened. The Rules were brought into force in the

year 2003. It is further contended that all the Data

Entry Operators Grade ‘A’, ‘B’ and ‘C’ continued as

such and were only re-designated as Tax Assistants or

Senior Tax Assistants upon the enforcement of the

2003 Rules and not before. The pay-scale of Senior

Tax Assistants was Rs.5000-8000. The appellants

belonging to Data Entry Operator Grade ‘B’ did not

draw the pay-scale of a Senior Tax Assistant, though,

the Grade of Data Entry Operator Grade ‘C’ was same

as that of the STA. Reliance was placed on the

Memorandum of the Government of India dated

21.04.2003, which categorically states that

58
restructured Cadre of STA came into force only on

20.01.2003.

41. Under the 2002 Inspector Rules, there is a clear

scheme. The earlier Ministerial Staff, who were

eligible for promotion under the repealed Rules,

continued to remain eligible under the 2002 Rules.

The eligibility was for a period of two years. The

period of two years started from the day on which the

restructured cadres came into force. For the first

two years, the earlier Ministerial Staff were

eligible. During that period, the Rules contemplated

that the restructured Cadres would acquire

eligibility. Rule 5 of the 2003 STA Rules is sought

to be explained away by pointing out, it would only

mean that if any of the Ministerial Staff, who had

been Tax Assistants/U.D. Clerks (Special Pay), who

came into the restructured Cadre of Senior Tax

Assistants, fall short of two years or five years

under Part 12(a) of the 2002 Inspector Rules, then,

their previous service, as also service after

restructuring, would count towards their eligibility.

In this regard, he drew our attention to Note 1 of

59
the 2002 Rules. Distinction is sought to be drawn

between Rule 5 of the Senior Tax Assistant Rules,

2003 and Rule 4 of the Tax Assistant Rules, 2003. The

Grade of Senior Tax Assistant is higher than the

Grade of Data Entry Operator Grade ‘B’, both in terms

of status and pay-scale.

42. Thus, it is contended that the service rendered

by the Officers, prior to there being restructuring,

could not be counted for the purpose of Clause (12)

(b) of the 2002 Inspector Rules. As regards the

question as to whether there was a ban on

appointment, it is contended that though, initially a

ban was imposed vide Memorandum dated 10.09.2001 by

Memorandum dated 03.01.2002, the ban was clearly

lifted. It is contended that the letter dated

05.06.2002 extended the ban relating to Direct

Recruitment but it did not affect letter dated

03.01.2002, which had removed the ban. Reliance is

also placed on letter dated 28.10.2002. It is

contended also that since there was no ban during the

period 2001-2002 and 2002-2003, and seeking to draw

support from the O.M. dated 08.09.1998, which

60
provides for a model calendar for holding of DPCs,

the principle in Y.V. Rangaiah (supra), is pressed

into service. It is pointed out that promotions had

already been made on the basis of the impugned

judgment of the High Court and resultant vacancies

were also filled-up by implementation Orders dated

26.09.2005, 17.05.2006 and 19.07.2006. Even the

erstwhile Data Entry Operator Grade ‘B’, re-

designated as Senior Tax Assistants, have been

promoted as Inspectors. Many of the contesting

parties have further been promoted as

Superintendents. The judgment of the High Court of

Bombay has not been implemented. The Order of the

CAT, Chandigarh Bench, is sought to be faulted. It is

pointed out that the Draft Recruitment Rules dated

28.10.2002 were taken as Final Recruitment Rules and

the entire judgment proceeds on the said basis. It

also failed to examine the scope of Clauses (a) and

(b) in Column 12 as also the Note below Column 12 of

the 2002 Inspector Rules. The High Court of Bombay

also did not refer to and consider the effect of the

2002 Rules.

61

43. The Data Entry Operators were not in the category

on 01.01.2001, for the Recruitment Year 2001-2002

and, on 01.01.2002, for the Recruitment Year 2002-

2003, and therefore, they were not eligible.

AMENDMENT OF LAW AND FILLING-UP OF OLD VACANCIES

44. The appellants would point out that it is not a

universal principle that vacancies must be filled-up

in accordance with the unamended Rules. He would

point out that the view taken by this Court, in this

regard, may be noticed.

45. In Y.V. Rangaiah (supra), this Court was dealing

a case under the Andhra Pradesh Registration and

Subordinate Service Rules. The Rule in question,

inter alia, contemplated preparation of a panel every

year in September. That apart, the Government also

issued very clear instructions, which emphasised

prompt preparation of panels being essential for

increasing administrative efficiency and filling of

vacancies without delay. Instead of filling-up

vacancies on the 01.09.1976, there was delay and the

panel came to be drawn-up in 1977 by which time an

amendment to the Rules purported to take away rights

62
of the Lower Division Clerks for promotion and the

Feeder Category was sought to be confined to the U.D.

Clerks. It was in the said factual context that the

court proceeded to lay down as follows:

“9. Having heard the counsel for the
parties, we find no force in either of the
two contentions. Under the old rules a
panel had to be prepared every year in
September. Accordingly, a panel should
have been prepared in the year 1976 and
transfer or promotion to the post of Sub-
Registrar Grade II should have been made
out of that panel. In that event the
petitioners in the two representation
petitions who ranked higher than
Respondents 3 to 15 would not have been
deprived of their right of being
considered for promotion. The vacancies
which occurred prior to the amended rules
would be governed by the old rules and not
by the amended rules. It is admitted by
counsel for both the parties that
henceforth promotion to the post of Sub-
Registrar Grade II will be according to
the new rules on the zonal basis and not
on the State-wide basis and, therefore,
there was no question of challenging the
new rules. But the question is of filling
the vacancies that occurred prior to the
amended rules. We have not the slightest
doubt that the posts which fell vacant
prior to the amended rules would be
governed by the old rules and not by the
new rules.”

46. It suffices, for our purpose, to note that the

view taken by the Court, in the said case, came to be

followed in subsequent judgments, viz., P. Ganeshwar

63
Rao and others v. State of A.P
. and others2; P.

Mahendran and others v. State of Karnataka and

others3; A.A. Calton v. Director of Education4 and

N.T. Devin Katti and others v. Karnataka Public

Service Commission and others5.

47. On the other hand, there is another line of

decisions which is relied upon by the appellants.

Very briefly, the principle is this:

Despite availability of vacancies, if the

Appointing Authority consciously takes a

decision to keep unfilled the vacancies for

good reasons, the Rules, as on the day of

consideration of the matters relating to

promotion, would govern the situation.

48. The representative of this view would be the

decision by the Bench of three Judges in K. Ramulu

(Dr.) and another v. (Dr.) S. Suryaprakash Rao and

others6 and P. Ganeshwar Rao (supra). In K. Ramulu

(Dr.) (supra), the Government had taken a decision to

amend the Rules in question. It also took a conscious
2 (1988) Supp. SCC 740
3 (1990) 1 SCC 411
4 (1983) 3 SCC 33
5 (1990) 3 SCC 157
6 (1997) 3 SCC 59

64
decision not to fill the vacancies till the amendment.

For the years 1995-1996, there was no panel prepared.

Essentially on the said facts, this Court held as

follows:

“12. The same ratio was reiterated
in Union of India v. K.V. Vijeesh [(1996)
3 SCC 139 : 1996 SCC (L&S) 683] (SCC paras
5 and 7). Thus, it could be seen that for
reasons germane to the decision, the
Government is entitled to take a decision
not to fill up the existing vacancies as
on the relevant date. Shri H.S. Gururaja
Rao, contends that this Court in Y.V.
Rangaiah v. J. Sreenivasa Rao
[(1983) 3
SCC 284 : 1983 SCC (L&S) 382] had held
that the existing vacancies were required
to be filled up as per the law prior to
the date of the amended Rules. The mere
fact that Rules came to be amended
subsequently does not empower the
Government not to consider the persons who
were eligible prior to the date of
amendment. It is seen that the case
related to the amendment of the Rules.
Prior to the amendment of the Rules two
sources were available for appointment as
Sub-Registrar, namely, UDCs and LDCs.

Subsequently, Rules came to be amended
taking away the right of the LDCs for
appointment as Sub-Registrar. When the
vacancies were not being filled up in
accordance with the existing Rules, this
Court had pointed out that prior to the
amendment of the Rules, the vacancies were
existing and that the eligible candidates

65
were required to be considered in
accordance with the prevailing Rules.
Therefore, the mere fact of subsequent
amendment does not take away the right to
be considered in accordance with the
existing Rules. As a proposition of law,
there is no dispute and cannot be
disputed. But the question is whether the
ratio in Rangaiah case [(1983) 3 SCC 284 :
1983 SCC (L&S) 382] would apply to the
facts of this case. The Government therein
merely amended the Rules, applied the
amended Rules without taking any conscious
decision not to fill up the existing
vacancies pending amendment of the Rules
on the date the new Rules came into force.
It is true, as contended by Mr H.S.
Gururaja Rao, that this Court has followed
the ratio therein in many a decision and
those cited by him are P. Ganeshwar
Rao v. State of A.P
. [1988 Supp SCC 740 :

1989 SCC (L&S) 123 : (1988) 8 ATC
957] , P. Mahendran v. State of
Karnataka
[(1990) 1 SCC 411 : 1990 SCC
(L&S) 163 : (1990) 12 ATC 727] , A.A.
Calton v. Director of Education
[(1983) 3
SCC 33 : 1983 SCC (L&S) 356] , N.T. Devin
Katti v. Karnataka Public Service
Commission
[(1990) 3 SCC 157 : 1990 SCC
(L&S) 446 : (1990) 14 ATC 688] , Ramesh
Kumar Choudha v. State of M.P
. [(1996) 11
SCC 242 : (1996) 7 Scale 619] In none of
these decisions, a situation which has
arisen in the present case had come up for
consideration. Even Rule 3 of the General
Rules is not of any help to the respondent
for the reason that Rule 3 contemplates

66
making of an appointment in accordance
with the existing Rules.

13. It is seen that since the
Government have taken a conscious decision
not to make any appointment till the
amendment of the Rules, Rule 3 of the
General Rules is not of any help to the
respondent. The ratio in the case
of Ramesh Kumar Choudha v. State of
M.P
. [(1996) 11 SCC 242 : (1996) 7 Scale
619] is also not of any help to the
respondent. Therein, this Court had
pointed out that the panel requires to be
made in accordance with the existing Rules
and operated upon. There cannot be any
dispute on that proposition or direction
issued by this Court. As stated earlier,
the Government was right in taking a
decision not to operate Rule 4 of the
General Rules due to their policy decision
to amend the Rules. He then relies on para
14 of the unreported judgment of this
Court made in Union of India v. S.S.
Uppal
[(1996) 2 SCC 168 : 1996 SCC (L&S)
438 : (1996) 32 ATC 668] . Even that
decision is not of any help to him. He
then relies upon the judgment of this
Court in Gajraj Singh v. STAT [(1997) 1
SCC 650 : (1996) 7 Scale 31] wherein it
was held that the existing rights saved by
the repealed Act would be considered in
accordance with the Rules. The ratio
therein is not applicable because the
existing Rules do not save any of the
rights acquired or accruing under the
Rules. On the other hand, this Court had

67
pointed out (in Scale para 23) thus: (SCC
pp. 664-65, para 22)
“Whenever an Act is repealed it
must be considered, except as to
transactions past and closed, as if
it had never existed. The effect
thereof is to obliterate the Act
completely from the record of
Parliament as if it had never been
passed; it never existed except for
the purpose of those actions which
were commenced, prosecuted and
concluded while it was an existing
law. Legal fiction is one which is
not an actual reality and which the
law recognises and the court accepts
as a reality. Therefore, in case of
legal fiction the court believes
something to exist which in reality
does not exist. It is nothing but a
presumption of the existence of the
state of affairs which in actuality
is non-existent. The effect of such a
legal fiction is that a position
which otherwise would not obtain is
deemed to obtain under the
circumstances. Therefore, when
Section 217(1) of the Act repealed
Act 4 of 1939 w.e.f. 1-7-1989, the
law in Act 4 of 1939 in effect came
to be non-existent except as regards
the transactions, past and closed or
saved.””

49. In Deepak Agarwal and another v. State of U.P.

and others7, one of the two appellants was a

7(2011) 6 SCC 725

68
Statistical Officer. The other one was a Technical

Officer. The Rules prior to their amendment included

them in the Feeder Category for the promotion to the

post of Deputy Excise Commissioner. The amendment, by

which they stood deprived of their right to be

considered for promotion, was made considering work

experience, duties and qualifications of Statistical

Officer and Technical Officers rendering them unfit to

be considered for the higher post. The question, which

fell for consideration, was posed in paragraph 18 as

follows:

“18. The short question that arises
for consideration is as to whether the
appellants were entitled to be considered
for promotion on the post of Deputy Excise
Commissioner under the 1983 Rules, on the
vacancies, which occurred prior to the
amendment in the 1983 Rules on 17-5-1999.”

50. This Court noticed that there was no statutory

duty cast on the State to complete the selection

process within a prescribed period. It further noted

the statutory provision enabling the State to leave a

particular post unfilled. It was still further found

that the promotion to the vacancies had been made

69
under the amended Rules. The principle laid down in

Y.V. Rangiah (supra) came to be distinguished in the

following words:

“24. We are of the considered opinion
that the judgment in Y.V. Rangaiah
case [(1983) 3 SCC 284 : 1983 SCC (L&S)
382] would not be applicable in the facts
and circumstances of this case. The
aforesaid judgment was rendered on the
interpretation of Rule 4(a)(1)(i) of the
Andhra Pradesh Registration and
Subordinate Service Rules, 1976. The
aforesaid Rule provided for preparation of
a panel for the eligible candidates every
year in the month of September. This was a
statutory duty cast upon the State. The
exercise was required to be conducted each
year. Thereafter, only promotion orders
were to be issued. However, no panel had
been prepared for the year 1976.
Subsequently, the Rule was amended, which
rendered the petitioners therein
ineligible to be considered for promotion.
In these circumstances, it was observed by
this Court that the amendment would not be
applicable to the vacancies which had
arisen prior to the amendment. The
vacancies which occurred prior to the
amended Rules would be governed by the old
Rules and not the amended Rules.”

51. Still further, we may notice the following

statement of the law contained hereunder:

“26. It is by now a settled
proposition of law that a candidate has
the right to be considered in the light of
the existing rules, which implies the
“rule in force” on the date the
consideration took place. There is no rule

70
of universal or absolute application that
vacancies are to be filled invariably by
the law existing on the date when the
vacancy arises. The requirement of filling
up old vacancies under the old rules is
interlinked with the candidate having
acquired a right to be considered for
promotion. The right to be considered for
promotion accrues on the date of
consideration of the eligible candidates.
Unless, of course, the applicable rule, as
in Y.V. Rangaiah case [(1983) 3 SCC 284 :

1983 SCC (L&S) 382] lays down any
particular time-frame, within which the
selection process is to be completed. In
the present case, consideration for
promotion took place after the amendment
came into operation. Thus, it cannot be
accepted that any accrued or vested right
of the appellants has been taken away by
the amendment.”

52. This Court proceeded to follow the judgment in K.

Ramulu (Dr.) (supra).

53. In M.I. Kunjukunju and others v. State of Kerala

and others8, the Court proceeded to lay down that when

Recruitments Rules were amended with retrospective

effect, pending process of selection, the selection

must proceed in accordance with amended Rules. The

Court, inter alia, took the view that a candidate, on

making an application to the post pursuant to the

8 (2015) 11 SCC 440

71
advertisement, do not acquire any vested right of

selection (See paragraph 19).

54. In State of Tripura and others v. Nikhil Ranjan

Chakraborty and others9, the Court, following Deepak

Agarwal (supra), took the view that a candidate only

has a right to be considered in the light of the

extant Rules, on the date of which, the consideration

for promotion takes place and there is no Rule of an

absolute application that vacancies must invariably be

filled-up under the existing law when they arose. We

may only refer to paragraph 9:

“9. The law is thus clear that a
candidate has the right to be considered
in the light of the existing rules,
namely, “rules in force on the date” the
consideration takes place and that there
is no rule of absolute application that
vacancies must invariably be filled by the
law existing on the date when they arose.

As against the case of total exclusion and
absolute deprivation of a chance to be
considered as in Deepak Agarwal [Deepak
Agarwal v. State of U.P
., (2011) 6 SCC 725
: (2011) 2 SCC (L&S) 175] in the instant
case certain additional posts have been
included in the feeder cadre, thereby
expanding the zone of consideration. It is
not as if the writ petitioners or
similarly situated candidates were totally
excluded. At best, they now had to compete
with some more candidates. In any case,
since there was no accrued right nor was
9 (2017) 3 SCC 646

72
there any mandate that vacancies must be
filled invariably by the law existing on
the date when the vacancy arose, the State
was well within its rights to stipulate
that the vacancies be filled in accordance
with the Rules as amended. Secondly, the
process to amend the Rules had also begun
well before the Notification dated 24-11-
2011.”

ANALYSIS

55. The post of Inspector, which is at the centre

stage of the controversy in Civil Appeal Nos. 1970-

1975 of 2009, is mentioned as the post of Inspector

(Ordinary Grade) in the 1979 Rules. The Feeder

Category, in regard to the post of Inspector, was:

a.Upper Division Clerks with five years’ service;

b.Upper Division Clerks with 13 years of total

service as Upper Division Clerk and Lower

Division Clerk, taken together subject to the

condition that they have a minimum of two years’

service in the Grade of Upper Division Clerk;

c.Stenographers (Senior Grade) with two years’

service;

d.Stenographers (Senior Grade) or Stenographers

(Ordinary Grade) with twelve years’ service as

Stenographer/Upper Division Clerk and Lower
73
Division Clerk, if any, taken together subject to

a minimum of two years’ service as Stenographers

(Ordinary Grade) or Upper Division Clerk Grade;

e.The next category, eligible was, Women Searchers

with seven years’ service in the Grade;

f.Draftsmen with seven years’ service in the Grade.

56. Later on, by an amendment, the post of Tax

Assistant was created out of the Cadre of Upper

Division Clerks (This must be referred to as the old

Cadre of Tax Assistants in contrast with the Cadre of

Tax Assistants as a result of restructuring and by

Rules dated 03.05.2003). The old Tax Assistants were

also, by virtue of Order dated 19.03.1988, rendered

eligible for consideration as Inspector.

57. On the other hand, the Data Entry Operators, a

Cadre, which was thought of and created to bring

about computerization in the Excise and Customs

Department, came into being and came to be governed

by the Rules made in the year 1992. There were four

Grades. The Entry Grade was Data Entry Operator Grade

‘A’, and Data Entry Operator Grade ‘A’ with six

years’ service, could aspire for promotion as Data

74
Entry Operator Grade ‘B’. Likewise, Data Entry

Operator Grade ‘B’ could aspire to be entitled as

Data Entry Operator Grade ‘C’. At the top of the

pyramid, was the post of Data Entry Operator Grade

‘D’.

58. It is seen from the above that the Data Entry

Operators were not eligible to be considered for

promotion as Inspector. The post of Inspector is a

Group ‘C’ post. The Data Entry Operators were also

Group ‘C’ but in the technical branch. The Upper

Division Clerks, Stenographers, Women Searchers,

Draftsmen, etc., who constituted the feeder

categories, were holding posts in the Ministerial

Category. The post of Inspector was a Group ‘C’ post

in the Executive Category. The holders of the post in

the Ministerial Cadre were in the Feeder Category for

promotion to the Executive post but holders of posts

of Data Entry Operators, though a Group ‘C’ post, but

being in the technical side, they constituted a

different and separate Cadre. There was no avenue for

them to get further promotions by getting promoted as

an Inspector.

75

59. According to the Data Entry Operators, they were

actually, after the period of computerization was

over, doing various other works and had gained

experience which entitled them to be considered for

promotion as Inspector. This issue apparently engaged

the attention of the Government. Government Decided

to bring about restructuring. Accordingly, the

decision regarding restructuring is seen captured in

the proceedings dated 19.07.2001. As to what is the

effect of the same, will be the heart of the

controversy. Hence, we deem it appropriate to dissect

the said proceedings in detail.

60. The Order dated 19.7.2001, recites that

Government has approved restructuring. It is further

stated that as a result of the restructuring, there

has been a change in number and nomenclature of the

various Grades and posts. The revised pay and

designation of the various posts at different levels,

in both the Customs and Central Excise Departments,

has been indicated in Annexure-1. The post of

Inspector is at Serial No.10. It refers to the post

of Inspector, Preventive Officer and Examiner. The

76
existing pay is shown as Rs.5500-9000. The

restructured post has been shown as Inspector. The

pay-scale remains the same. The sanctioned strength

is shown as 18053. The Notes are significant and they

read as follows:

“Notes:

1.The posts in the grade of Superintendents also
include posts of SIO, AAD, IO of various
directorates (Sl. No. 7).

2.The posts in the grade of Inspectors also
include the posts of P.O. and Examiner and
Intelligence Officers (Sl. No. 10).

3.The posts in the grade of AO also include the
posts of ACAO and EAO (Sl. No. 12)

4.The existing posts in the cadres of Asst., Tax
Asstt. UDC (Sp Pay), DEO Gr(C) and DEO Gr (B)
have been merged into and redesignated as Sr.
Tax Asstt (Sr. No. 19).

5.The existing posts in the cadres of UDC, DEO(A)
and UDC (except 717 posts of LDC for the
purpose of promotion of Group D) have been
merged and redesignated as Tax Asstt. (neew)
(Sl No. 20).

6.The cadre of OS has been abolished and the
posts have been merged in the posts of A.O.
(Sl. No. 12).

7.Other posts which exist in the department and
are not reflected in the above table have been
kept in their existing strength in the existing
pay scales only.

8.Details of other posts are given in Annexure II
(Sl. No. 15, 25, 30 and 33).”

77

61. No doubt, at Serial No.4, the expression used in

existing posts ‘have been’ merged into and re-

designated as Senior Tax Assistant (New).

62. The post of Senior Tax Assistant is shown as

‘New’ with a pay-scale of Rs.5000-8000. The

sanctioned strength is shown as 3152. So also, the

post of Tax Assistant is shown as ‘New’. The

sanctioned strength is shown as 5525. The pay-scale

is Rs.4000-6000. Coming back to the body of the

communication, it is stated that all the posts at

different levels, as per Annexure-1, stand sanctioned

with immediate effect. It is next stated that

whenever there is a reduction in the number of posts

at any level, such reduction will be effective after

the existing incumbents are promoted to the higher

level or the post falls vacant on account of

retirement, etc. For the year 2001-2002, no Direct

Recruitment was to be made without approval of the

Ministry/Department as the Cabinet had approved a

one-time relaxation for filling-up of all the

vacancies by promotion in all the cadres. Next, it is

stated that the formation-wise distribution of posts,

78
at different levels, will be notified separately. The

other posts included in the restructuring proposal

but where there is no proposal for alteration of the

scale or strength, were included in Annexure-2. The

post of Inspector does not figure in Annexure-2.

63. At first blush, on a perusal of the decision, as

embodied in the communication dated 19.07.2001, the

view, we may tentatively take, would be that

Government has not only approved the restructuring,

but it has intended it to be effective. It is not in

dispute that the post of Inspector was formerly the

post of Inspector/Preventive Officer/Appraiser. In

place of these three posts, there was only to be the

post of Inspector. In terms of the sanctioned

strength, it is common case that there was formerly

in excess of 22000 posts of Inspector. The number of

posts, in fact, came down to 18053 as a result of

restructuring. The restructuring has also resulted in

abolishing of certain posts, as for instance, the

post of O.S.. Certain posts came to be merged and new

posts have emerged. Of interest to us, in resolving

the dispute, are the cadres of Assistant, Tax

79
Assistant, U.D. Clerk (Special Pay), Data

Entry Operator Grade ‘C’ and Grade ‘B’, which merged,

and the post of Senior Tax Assistant, emerged. In

place of the enumerated posts, as above, it was

contemplated that the post of Senior Tax Assistant

will take their place. The existing posts of U.D.

Clerk, Data Entry Operator Grade ‘A’ also underwent a

merger and, in their place, emerged the post of Tax

Assistant (New).

64. A perusal of the proceeding dated 19.07.2001 also

drives home the point that the posts in different

levels, consequent upon restructuring, have been

articulated in Annexure-1. What is more, they stood

sanctioned with immediate effect. These

circumstances, undoubtedly, do point to the

restructuring exercise being not one only in

principle but also to have effect immediately. Even

more, in this direction, is the further decision that

as a result of restructuring, there has been

reduction in the number of posts and if there is a

person, holding the post, the restructuring in the

form of reduction, was not to come into force except

80
after the person holding the post was to either

retire or he was promoted to the next higher post. An

illustration would clarify the point. As noticed,

prior to the restructuring, there were more than

22000 posts of Inspector. The number of posts of

Inspector was reduced to a little over 18000. What

would happen to the persons who were holding the

posts of Inspector in excess of 18000, is, what is

provided in the order. The person holding the posts

of Inspector, in excess of the reduced sanctioned

strength, would continue to hold the post till either

retirement or he was promoted, whereafter, the post

would die a natural death. The expression used in

Note 4 also indicates that the posts were merged and

re-designated. Undoubtedly, these aspects do provide

circumstances for us to hold that the decision of the

Cabinet, as provided in the communication dated

19.07.2001, was not just a principle set in motion

towards achieving the target of actual restructuring,

but it itself exhaustively brought about the

restructuring per se.

81

65. The next letter is dated 25.07.2001. Therein

addressing all Chief Commissioners of Customs/Central

Excise and Commissionerate besides Director Generals,

it is stated that the cadre restructuring proposal

has been approved. In addition to the communication,

a number of activities had to be initiated, including

the issuance of Customs and Excise notifications,

indicating jurisdiction and also distribution of

posts in various Grades among the Commissionerates

and Customs House. An implementation Cell was

constituted consisting of seven members. The next

communication is dated 10.9.2001. It reads as

follows:

“I am directed to say that the issue
of holding of DPCs in respect of Group
‘B’ & ‘C’ posts as well as making direct
recruitment to the various posts pending
distribution of posts of various field
formations is being undertaken by the
Implementation Cell in pursuant to
sanction issued by Board’s letter F.No.
A-11019/72/99-Ad.IV dated 19.07.2001
conveying the approval of the Cabinet to
the restructuring of Customs and Central
Excise Department has been considered by
the Board.

2. It is felt that if the DPCs for
group ‘B’ & ‘C’ are conducted by the
cadre authorities it may lead to
widening of imbalances in promotion
82
prospects or create imbalances. The
Board have, therefore, decided that the
holding of DPC of group ‘B’ & ‘C’ post
may be frozen and no DPC may be held for
group ‘B’ & ‘C’ post till the
distribution of posts under various
level is completed and instructions are
issued by the Board in this regard.

3. As you are aware that Board have
already imposed a ban for filling up of
post of LDC and Sepoys vide their letter
F.No.A-11012/27/2000-Ad.IV dated
10.04.2001. It is reiterated that these
instructions may be strictly adhered to
and it is further stated that no direct
recruitment may be made to any grade
till further orders of the Board/
Department of Revenue.

4. The receipt of this letter may please
be acknowledged.”
(Emphasis supplied)

66. It may be noticed that by the said letter the

holding of DPC for Group ‘B’ and Group ‘C’ posts was

frozen till the distribution of posts under various

levels was completed and instructions were received.

The next communication is dated 19.09.2001.

“As you are aware, some reports have
earlier been called from the field
formations by this Directorate with
regard to sanctioned and working
strength of different cadres and
additional requirements, if any, keeping
in view the model structure of the new
Commissionerates which was circulated
(copy again enclosed for ready
83
reference). It is observed that either
reports have not been received of where
received, there are some deficiencies.
Many commissionerates have still
projected requirements of OS, UDCs,
Examiners, DEO etc. which cadres have
already been merged into new cadres and
will not exist under the new
dispensation. Similarly some of the
Commissionerates have accepted the model
structure without considering the actual
requirement. As stated in earlier
communications, the model structure
indicates average requirement for one
Commissionerate and it may not be
possible to apply it across the board.

Airport and Preventive Customs
Commissionerates may not require 19 or
12 Appraisers whereas they may need more
Supdts. and Inspectors than indicated in
the model structure. It is therefore,
necessary to adjudge the actual
requirement of staff of different cadres
keeping in view the quantum and nature
of work handled by the particular
Commissionerates and the principles
governing the cadre restructuring
proposals which envisage the deptt. To
be officer-oriented, technology driven
with reduced manual processing of
documents by greater use of computers
and reducing interface with tax-payers.
This means a reduction in man-power in
general.

2. It is, therefore, requested that
precise information in the proforma I to
III annexed to this letter may please be
provided. Proforma I relates to existing
sanctioned strength prior to cadre
review for each cadre. In case, any
cadre which is existing but has been
left out in the proforma the same may be
added at the end of proforma. This

84
proforma has to be in reference to
cadres existing prior to the cadre
restricting exercise. Proforma II seeks
information on actual requirement of
staff of each cadre which will exist
after the coming into effect of the
cadre restructuring proposal. While
providing information in this proforma
the following points should be carefully
considered:

(i) Since new Zones are being created by
bifurcating or trifurcating the existing
Zone, the staff proposed in this
proforma will be for the same overall
jurisdiction for which staff indicated
in proforma I was sanctioned. Any
deviation may please be indicated as
footnote to this proforma. This means
where one zone has been divided into
three zones, the staff strength of
cadres not affected by the restructuring
exercise would remain same for all three
zones i.e. total strength of such cadre
in three zones would be equal of
strength in earlier combined zone.

(ii) Requirement in this proforma should
be in the reference to cadres which will
exist henceforth. For example,
requirement of Sr. Tax Assistants should
be adjudged with reference to the work
earlier handled by Tax Assistants,
Special Pay UDCs, DEOs Grade B and C as
all these cadres have been merged into
the cadre of Sr. Tax Assistants.

Similarly requirement of AOs should
include the requirement for work earlier
handled by OS as the cadre of OS has
been merged with cadre of AO. Similarly,
all POs/Examiners/Inspectors will be
designated as Inspector only. A chart
showing the merger/abolition of cadres
and increase/decrease in the no. of
posts is enclosed.

85

(iii) While indicating requirements for
the Zone, it may be ensured that where
no. of posts have been reduced the
requirement of staff has to reduce
proportionally for the Zone. For
example, the number of Inspector level
posts having been reduced from 21222 to
18053, the Zones’ sanctioned strength
has also to be reduced in the same
ratio. Similarly where posts have been
increased (for example, superintendents
and Appraisers), the requirement can be
increased proportionately. In case of
any deviation required in any Zone in
this regard, full justification should
be provided in a separate note. Since
total no. of posts in any cadre cannot
be more than posts approved for the
country as a whole, the Chief
Commissioners should consider the
requirements projected work carefully.
It may please be noted that purpose of
this exercise is to allocate the staff
already sanctioned to
Zones/Commissionerates and not to
consider sanction of additional staff.
Proposals for additional staff should
not therefore be made while furnishing
the information.

(iv) Staff required for the Chief
Commissioners’ office and for
Commissioner(Appeal)/Adjn. should also
be adjudged keeping in view the modern
tools of administration available.

(v) Wherever requirement of any cadre
for the new Zones/Commissionerates
exceeds the staff managing the same
jurisdiction at present, the proposal
for additional staff should be supported
by the study conducted by the S.I.U. If
in any formation S.I.U. has recommended

86
reduction in staff, the same should also
be indicated.

3. Proforma III seeks information on
staff sanctioned and required for
handling Customs work falling in the
jurisdiction of Central Excise
Commissionerates under the proposals for
re-organization forwarded by the Chief
Commissioners. Requirement of staff
projected must be supported by the
statistics of work being handled by the
Customs Division/ICD/CFS etc. The staff
sanctioned/required this work should not
be included in the data provided in
proforma I and II and a confirmation to
this effect recorded in the proforma.
However, if no staff has been sanctioned
for customs work earlier and the work
was being managed by staff sanctioned
for Central Excise work, this may be
indicated in this proforma and staff
sanctioned should be included in
proforma I with suitable remarks. The
staff required should be only with
reference to designations which will be
functional after implementation of the
proposal.

4. In respect of each Commissionerate,
the name of the cadre controlling
Commissionerate should also be informed
alongwith details of cadres controlled
by them.

5. Since giving effect to the proposal
of restructuring including promotions
etc., is dependant on the information
being sought, you are requested to
ensure that carefully compiled
information complete in all respects is
made available within a week’s time.”
The chart is omitted.

87

67. On 03.01.2002, the following communication is

seen sent:

“I am directed to refer to Board’s
letter of even number dated 10.09.2001
imposing a ban on holding of DPCs for
Group ‘B’ & ‘C’ posts. The Board have
received representations against the
aforesaid ban on promotions.

2. The matter has been considered by
the Board and it has been decided that
wherever the DPCs may also be filled
up. Where the DPCs have not been held,
the DPCs may be held on the basis of
re-revised strength i.e. the strength
existing before the cadre
restructuring and the resultant
vacancies may be filled up.

3. Action may be taken on priority
basis under intimation to the Board.”

68. In proceeding dated 02.04.2002, promotion was

effected to the post of Tax Assistant from the post

of U.D. Clerk. According to Shri C.U. Singh, this was

by way of filling-up the posts in terms of Order

dated 03.01.2002. Further proceedings to be noticed

is dated 05.06.2002. Therein reference is made to

19.07.2001 while notifying the revised sanctioned

strength at different levels consequent to approval

of cadre restructuring. It is further stated that the

allocation of staff to the zones Commissionerates,

88
Director General and Directorate at different levels

has been decided by the Board and approved by the

Government as detailed in the enclosed folder. The

allocation superseded all earlier Notifications in

respect of Cadre categories in the enclosed folder

separately. All the Chief Commissioners and other

Head of Departments were required to carefully study

the detail of reorganisation of the formation and to

bring to the notice of the Board any discrepancy that

may require review or may not have been taken into

account for corrective action. Cadre control was to

vest to the respective Commissioners in the

particular zones and it is further stated that the

ban on direct recruitment was to continue till

31.12.2002. The ban was to applicable only to posts

including in the cadre restructuring. Finally, in

paragraph 8, it is stated as follows:

“The detailed instructions/orders/
recruitment rules governing the manner of
filling up of the vacancies at all levels
will be issued separately. No vacancy in
respect of the posts included in the cadre
restructuring should be filled up till
such time as further orders are issued.”
(Emphasis supplied)

89

69. It may be noted at once that though there is

case for the respondents that the ban on

restructuring was lifted by letter dated 03.01.2002,

such contention appears to be categorically belied by

the prohibition against filling-up of any vacancy in

respect of posts included in the cadre restructuring,

till such time, as further orders are issued. Though

vacancies may have arisen, which could be filled-up

under the 1979 Rules, this appears to be a case where

a conscious decision was taken not to fill-up the

vacancies in the wake of the restructuring process

which was undertaken by the Government. Though a

contention is taken that the post of Inspector is not

part of the cadre restructuring, we are of the view

that there may not be merit in the said contention.

The post of Inspector emerged as re-designated post

in place of the erstwhile post of

Inspector/Preventive Officer/Appraiser. More

importantly, that it was a part of the restructuring,

is clear from the fact that the number of posts fell

from a little over 22000 to a little over 18000.

Therefore, the post of Inspector was a post which can

90
be treated as included in cadre restructuring. The

taboo against filling-up of the vacancy, is clearly

reflected in the communication dated 05.06.2002.

On 26.6.2002, urgent direction is issued to hold DPC

to the post of Superintendent of Central Excise and

Superintendent of Customs. Therein, it is, inter

alia, stated as follows:

“I am further directed to say that
while drawing up the panel for
promotion to the cadre of
Superintendents of Central Excise from
the Grade of Inspectors of Central
Excise and Superintendents of Customs
(Preventive) from the grade of
Preventive Officers, the vacancies
arising on account of the cadre
restructuring scheme as also regular
vacancies arising on account of
retirement etc., during the year 2002-
2003 may be taken into account after
observing the procedure for DPC etc.
However, posts indicated in the cadre
restructuring scheme shall be filled up
only after necessary orders are issued
by the Ministry in this regard.
I am also directed to draw your
attention to this Ministry’s letter
F.No.A. 32012/9/89-Ad.II B dated
26.06.1990 (Copy enclosed) and to say
that this year orders of promotion
instead of being issued on the last
working day of June may issued on the
1st working day of July 2002.”

91

70. The next letter to notice is the letter dated

19.09.2002. Therein, after referring to letter dated

26.06.2002, it is stated that it was decided to

initiate the process for filling-up vacancies that

have arisen on account of cadre restructuring in all

remaining cadres up to Grade ‘B’. It was directed to

ensure that apparently DPC was convened in respect of

all Grades for the change of number of posts, as also

Grades, where revised Recruitment Rules have been

circulated. On 23.09.2002, promotion

orders in respect of Superintendents were allowed to

be issued. On 28.10.2002, the

Draft Recruitment Rules for Group ‘C’

post of Inspector and Senior Tax Assistant was

communicated to all Chief Commissioners, both, Customs

and Central Excise. It was further stated that

Notifications notifying the Rules will be issued

shortly. Direction was given to start the process of

DPC. Thus, it could be said that by the issuance of

this communication, the Government decided to proceed

with the recruitment by promotion to the post of

Inspector.

92

71. A perusal of the communication dated 28.10.2002,

reveals the following:

All chief Commissioners were favoured with

Draft Recruitment Rules for the Group ‘C’ post

of Inspector (Central Excise and Land

Customs), Inspector (Examiner) and Inspector

(Preventive Officers). Besides the Draft

Recruitment Rules for the post of Senior Tax

Assistant, as approved by the Ministry, was

also dispatched to the Chief Commissioners. It

is specifically stated that the Notifications,

notifying the Rules, will be issued shortly.

The Chief Commissioners were told that they

may initiate necessary action to process for

DC (apparently DPC). The next sentence is of

crucial significance. It reads as follows:

“You may however await issue of

notification before issue of any order

of promotion based on these Rules.”

72. This communication establishes further, the

following aspects:

93
Restructuring the post of Inspector,

contemplated under the order dated 19.07.2001,

had not yet come into being. This is because

there is reference to the post of Inspector

(Central Excise & Customs), Inspector

(Examiner) and Inspector (Preventive Officer).

If the post of Inspector, as contemplated

under the Order dated 19.07.2001, had already

come into existence with the issuance of the

Order dated 19.07.2001, there was no occasion

to continue to refer to pre-designated posts

from which the post of Inspector emerged.

73. Still further, what was obviously contemplated

was that the post of Inspector was to be filled-up

after the process of restructuring was over. In

other words, the Rules relating to Inspector and the

Rules relating to recruitment of Senior Tax

Assistants, was to be brought into force

simultaneously. This conclusion appears inevitable

from the circumstance that the Chief Commissioners

were directed to await issuance of Notification

notifying the Rules before orders of promotions were

94
issued based on the Rules which were the Draft

Recruitment Rules. It is not indicated in the Order

dated 28.10.2002 that promotion to the post of

Inspector was to be made under 1979 Rules. What was,

in fact, contemplated was that the process, viz., the

holding of the DPC for the post of Inspector, was to

begin and operationalised under the Draft Rules but

the actual orders of promotion were to be issued only

after the Rules were actually brought into force. The

Draft Recruitment Rules for the Tax Assistant was

also sent by letter dated 06.11.2002. By letter dated

14.11.2002, it is directed as follows:

“I am directed to refer to Minister’s
letter F.No.A-11013/01/2002-AdIV dated
19th September 2002 regarding holding of
DPC’s in all grade where Recruitment
Rules exist, as also in grades where
revised recruitment rules have been
circulated. In terms of Para 2 of the
said letter, it was directed to hold the
DPC’s by 30th September, 2002 and keep
the list ready for issue. It was also
clarified that promotion orders may only
be issued on receipt of further
directions from Ministry.

2. In view of the above, you are
requested to issue the promotion orders
in respect of remaining Group ‘B’, ‘C’
and ‘D’ posts as sated below:-

95

(i) promotion orders in respect of
Sepoy, Havaldar, Head Havaldar, Tax
Assistant, Senior Tax Assistant and
Inspector of Central Excise/Preventive
Officer/ Examiner of Customs may be
issued on the basis of Recruitment Rules
after allotment of GSR No by the
Government of India Press, Wherever not
yet allotted.

(ii) DPC in respect of Appraisers and
Administrative Officer may be held on
the basis of existing Recruitment Rules
and promotion orders may be issued.

(iii) DPC in respect of remaining grades
except DOS L-II may be held on the basis
of existing Recruitment Rules and
Promotion orders may be issued by
25.11.2002.

(iv) Promotion in the grade of DOS L-II
may be made only after the new
recruitment rules are circulated by the
Ministry.”
(Emphasis supplied)

74. In the Order dated 14.11.2002, it is

specifically, inter alia, ordered that promotion

orders in respect of the post of Inspector (Central

Excise)/Preventive Officer/Examiner of Customs may be

issued on the basis of the Recruitment Rules after

the allotment of GSR Number by the Government of

India Press. Thus, the green signal was given to go

ahead with the issuance of promotion order for the

post of Inspector, inter alia, based on the

96
Recruitment Rules, after the allotment of the GSR,

which means the Notification of the Rules.

75. What actually happened was, however, as follows:

The Inspector Rules and the Senior

Tax Assistant Rules were not published and

brought into force on the same date. The

Inspector Rules came to be finalised and

published on 29.11.2002. It is brought

into force on 07.12.2002. The STA Rules,

though published on 16.01.2003, was

brought into force on 20.01.2003.

WHEN CADRE RESTRUCTURING TOOK PLACE

76. The next question, however, which would arise as

to when was the cadre restructuring actually

effectuated. In this regard, we have already noticed

the contents of the communication dated 19.07.2001.

We have also pointed out the circumstances which

tends to indicate that not only the Cabinet took a

decision to bring about restructuring in the Central

Excise and Customs Department in principle but

evidencing an actual sanctioning of posts with

immediate effect in various cadres. We have also

97
noticed how the Government has provided that in case

of reduction in strength, as a result of the

restructuring, persons holding posts in excess of the

revised and reduced strength, were permitted to

continue till their promotion or retirement, etc.. We

have noticed the language used in Note 4 also. The

time is now ripe for us to have a look at the

Statutory Rules. The contention of the respondents

and the finding of the High Court is that

restructuring came into effect only with the issuance

of the Statutory Rules in the case of Senior Tax

Assistants on 16.01.2003, which was published in the

Official Gazette on 20.1.2003. Therefore, the actual

restructuring became a reality only on 20.01.2003,

runs the argument of the respondents.

77. Inspector Rules, 2002 came into force on

07.12.2002. The Senior Tax Assistant Rules came into

force with effect from 20.01.2003. In Column 12 to

the Schedule to the 2002 Inspector Rules, which deals

with how promotion is to be effected; Clause (a)

contains, apparently, those categories, which were

among the feeder categories under the 1979 Rules. In

98
fact, Clause (a) itself recites by selection

from those candidates working in the pre-restructured

cadre. No doubt, the words ‘pre-structured’ is added

by Corrigendum in 2003. Clause (b) provides for

selection from those candidates working in the

restructured cadre. The third Feeder Category is to

operate, failing the method of recruitment specified

under clause(b). It is apposite that we notice, at

this juncture, Note 1. For the purpose of

convenience, it is recapitulated again. It reads as

follows:

In case of recruitment by promotion/
deputation/absorption, grade from
which promotion/deputation/absorption
to be made.

12

Promotion: (a) By selection from those
candidates working in the following
restructured cadres:

Note 1: Promotion under Clause (a)
above shall be only operative for a
period of two years from the date on
which the restructured cadres
mentioned under Clause (b) above comes
into existence.

The service rendered under the new
grade in the restructured cadres shall
be counted towards considering the
eligibility for promotion under Clause

(a) above.

78. It is strenuously argued before us on behalf of

the respondents that Note 1 reveals the Legislative

99
intent that the feeder categories, mentioned in

Clause (a), would be given the right exclusive in

nature, thereby excluding those categories in Clause

(b). This exclusive right, it is pointed out, was to

last only for a period of two years. We may shift

focus also to the STA Rules of 2003. We may advert

to it as much may turn on its purport:

“5. Initial constitution.-(i) All the
persons appointed on the regular basis
at the time of commencement of these
rules to the Grade of Assistant, Tax
Assistant, Upper Division Clerk (Special
Pay), Data Entry Operator Grade B’ and
‘C’ shall be deemed to have been
appointed as Senior Tax Assistants under
these rules. The service rendered by
them before commencement of these rules
shall be taken into account for deciding
the eligibility for promotion to the
next higher grade.

(ii) Assistants (Rs. 5000-8000) and Data
Entry Operator Grade ‘C’ (Rs. 5000-8000)
are being redesignated as Senior Tax
Assistants in the same scale of pay.
Therefore, the Assistants and Data Entry
Operator Grade ‘c’ shall be placed
enblock senior to the other categories.
However, their inter-se placement shall
be done according to the date from which
they had actually been appointed to
these grades on regular basis subject to
the condition that their inter se
placement in their respective category
shall not be altered.

100

(iii) The Data Entry Operator Grade ‘B’
(4500-7000) and Tax Assistants (4500-
7000) have been placed in their higher
scale of 5000-8000 and they shall be
placed below the Assistant and Data
Entry Operator Grade ‘C’ and their
inter-se-placement shall be fixed in
accordance with the date of regular
appointment to the respective grade
subject to the condition that their
inter-se-placement in respective
category shall not be disturbed.

(iv) Upper Division Clerk with special
pay shall be placed below Assistant,
Data Entry Operator Grade ‘C’, Data
Entry Operator Grade ‘B’ Tax Assistants.

(v) The present employees would be
required to pass the required or
suitable departmental examination, as
specified by the Competent Authority,
from time to time, in Computer
application and relevant procedures
within two years falling which they
would not be eligible for further
increments.”

79. We may notice that under the 2003 STA Rules, Rule

5 contemplated the initial constitution of the Cadre

of Senior Tax Assistants. It was to consist of the

former categories of Tax Assistant, U.D. Clerk

(Special Pay), Data Entry Operator Group ‘B’ and ‘C’.

The future method of recruitment was by way of 100

per cent promotion from Tax Assistants, as provided

in Column 12 of the said Rules. It is also necessary

101
to notice Rule 4 of the Tax Assistant Rules 2003,

which was brought into force with effect from

05.05.2003.

“4. Initial constitution:- (1) The
person appointed on regular basis and
holding the post of Upper Division
Clerk and Data Entry Operator Grade A
on the commencement of these rules
shall deemed to have been appointed as
Tax Assistant under these rules and
the service rendered by such persons
in the respective posts before
commencement of these rules shall be
taken into account as regular service
rendered on the post of Tax Assistant
for the purpose of promotion etc.
(2) The person holding the post of
Data Entry Operator Grade-A appointed
under these rules as Tax Assistant,
shall, within two years, from the date
of such appointment as Tax Assistant,
pass the Departmental Examination as
conducted by the competent authority,
failing which he shall not be entitled
to get any further increment.

(3) Any person, who holds a post of
Lower Division Clerk on regular basis
and falls within the seniority list as
determined by the appointing authority
at the commencement of these rules
shall, on passing the Departmental
Computer Proficiency examination
conducted by the appointing authority,
be deemed to have been promoted with
effect from date of passing such
examination on the post of Tax
Assistant.

(4)The Upper Division Clerks and Data
Entry Operator Grade -A shall be
102
placed en-block senior, and their
inter se placement shall be fixed in
accordance with the date of regular
appointment to the respective grade
subject to the condition that their
inter se placement in the respective
grade shall not be disturbed.

(5) Lower Division Clerks shall be
placed below Upper Division Clerks and
Data Entry Operator Grade -A.”

80. The dispute, as to when the restructuring was

completed, must be resolved on a conspectus of the

decision dated 19.07.2001 and the subsequent

decisions, as expressed in communications which we

have adverted to, and the combined effect of all

these Rules.

81. Now, turning back to Note 1 to the 2002 Inspector

Rules, we notice that promotion under Clause (a) was

to be operative for a period of two years from the

date on which the restructured Cadre in Clause (b)

comes into existence. If the interpretation sought to

be placed by the appellants is accepted, and we are

to hold that the restructured cadre of Senior Tax

Assistant came into force with effect from

19.07.2001, the result would be that promotion under

Clause (a) would be limited by a period of two years

103
from 19.07.2001. In other words, no promotion could

be ordered from the Feeder Category mentioned in

Clause (a) in Column 12 of the 2002 Inspector Rules

after 18.07.2003. This also means that promotions

could be, therefore, effected during the period

commencing from 19.07.2001. This produces the

anomalous result that promotions are to be

countenanced under the 2002 Rules, retrospectively

from 19.07.2001. What is more, according to the

appellants, promotions were banned during the period.

This, in our view, completely militates against the

idea that the restructured Cadre came into being from

19.07.2001. We are not oblivious and we have indeed

expressly articulated the circumstances from

communication dated 19.07.2001 which probablised the

appellant’s contention that restructuring became a

reality from 19.07.2001. But, we, at this juncture,

must also notice that the actual distribution of

posts in different formations was postponed. It may

not be in apposite, at this juncture, to also notice

another factual aspect. There is a definite case for

the respondents that the Data Entry Operator Grade

104
‘B’ and ‘C’ continued as such and they were only re-

designated as Senior Tax Assistant or Tax Assistant

on the enforcement of the 2003 Rules and not before

such enforcement. In fact, it was also not seriously

disputed before us that this was indeed the case on

the ground. We may also find light from the STA

Rules. Rule 5 declares that “all the persons

appointed on regular basis at the commencement of the

Rules in the Grade of Assistant, Tax Assistant, U.D.

Clerk (Special Pay), Data Entry Operator Grade ‘B’

and Grade ‘C’, shall be deemed to have been appointed

as Senior Tax Assistant under these Rules”. No

doubt, the Rule contemplated that the persons to be

deemed to have been appointed as Senior Tax Assistant

under the 2003 Rules, were the categories, which we

have already indicated. What is more relevant is,

they are referred to as the persons appointed at the

commencement of “these Rules”. The words used are

“persons appointed”. The intention appears to be to

indicate that the persons were appointed and working

on the commencement of the Rules, which is on

20.01.2003. It is those persons, who were referred

105
to by the designation, which were the posts which

were held by them prior to the restructuring. In

other words, appellants, who were working as Data

Entry Operator Grade ‘B’, upon being promoted in the

year 2000, were indeed persons who were appointed on

regular basis as Data Entry Operator Grade ‘B’ as on

20.01.2003, when the Rules, admittedly, were brought

into force.

82. We find further support for the view that the

appellants became Senior Tax Assistant upon Rules

being brought into force from the further limbs of

Rule 5. Sub-Rules (ii), (iii) and (iv) deal with the

issue of inter se seniority of the different

erstwhile restructured categories from which the

designated category of Senior Tax Assistant was born.

Those Assistants, who were drawing salary of pay

scale of 5000-8000, and Data Entry Operator Grade

‘C’, drawing the same pay scale, were re-designated

as Senior Tax Assistants in the same scale. They were

to rank at the top of the seniority list of the newly

created posts of Senior Tax Assistants. Just below

them were put the categories of Data Entry Operator

106
Grade ‘B’ and Tax Assistants, both drawing the pay

scale of 4500-7000, and they have been placed in the

higher pay scale of 5000-8000 and they were to be

placed below the Data Entry Operator Grade ‘C’.

Similarly, at the bottom of the pyramid, there is the

post of Upper Division Clerk with special pay, who

were to be placed below all the above categories as

aforesaid.

83. We also bear in mind that the language used in

Note 1, in Column 12 of the 2002 Inspector Rules. It

provides that the promotion in Clause (a) was to be

operative for a period of two years from the date on

which the restructured cadres, mentioned under

Clause (b) above, comes into existence. Had it been

the case where the restructured cadre in Clause (b)

had already come into existence, by virtue of order

dated 19.07.2001, the Law Giver would have used

language indicating the past tense. The Law Giver,

thus, contemplated that the restructured cadre in

Clause (b), which includes cadre of Senior Tax

Assistants, had not come into existence and it was to

107
come into existence. It came into existence, indeed,

in the future, viz., on 20.01.2003.

84. We are, thus, of the view that on a consideration

of the Government Orders and, more importantly, the

Statutory Rules that the conclusion appears to be

inevitable that restructured cadre actually came into

force in the cadre of Senior Tax Assistant with the

Rules being brought into force on 20.01.2003. Quite

apart from the fact that this is the legal

interpretation that flows, we are also supported by

the fact on the ground that the appellants appeared

to continue till after the Rules were brought into

force with the designation as Data Entry Operators

Grade ‘B’.

A perusal of Rule 5(v) of the STA Rules 2003 would

also show reference to ‘present employees’ and they

were to pass the departmental examination ‘within two

years’. Failure was to result in their being rendered

ineligible for future increments. Certainly, the

period of two years would commence only from

20.01.2003. If so, the ‘present employees’, including

the appellants continued as Data Entry Operator Grade

108
‘B’ till 20.01.2003. The view that the STA Cadre

emerged only on 20.01.2003, is supported by official

understanding, as reflected in proceedings dated 21-

04-2003. The principle of contemporanea expositio is

apposite in the facts.

APPELLANTS RIGHTS AS SENIOR TAX ASSISTNATS ON
RESTRUCTURING

85. Having found that restructuring was effective

from the date of the promulgation of the Statutory

Rules in case of Senior Tax Assistant w.e.f.

20.01.2003, and also having found that there was a

ban on carrying out promotions under the earlier

Rules, as evident from a perusal of communications

dated 10.09.2001, 03.01.2002 and 05.06.2002, and

thus, it manifested a conscious decision on the part

of the Government not to fill the vacancies in

accordance with the earlier Recruitment Rules, viz.,

1979 Rules, the question arises as to what is the

nature of the right which the appellants had. It must

be remembered that the appellants filed the Original

Application before the Tribunal taking exception to

the Notice dated 05.11.2002. Now, let us analyse the

reasoning of the Tribunal with reference to the case
109
set up by the parties. The case of the appellants

must be understood as follows:

 The restructured cadre has come into

existence on 19.07.2001.

 Promotion to the post of Inspector could be

made only from the restructured cadres while

so the draft recruitment rules came to be

issued on 28.10.2002.

86. In the said Rules, preference was sought to be

given to the pre-structured cadres, which included

the old tax assistants with a certain number of

years. It was Clause (a) to Column 12 of the 2002

Inspector Rules, which was alleged as unconscionable

and violative of Articles 14 and 16 of the

Constitution of India. It was the further complaint

that Note 1 in Column 12 of the 2002 Inspector Rules

was also flawed insofar as the persons in the pre-

structured cadre, viz., those falling in Clause (a),

were enabled to steal a march by being promoted,

taking into consideration their service in the new

Grade in the restructured Cadre for the eligibility

for promotion under Clause (a). The only Cadre, which

110
was eligible for promotion after the order dated

19.07.2001, was the restructured Cadre, including the

Cadre of Senior Tax Assistants, ran the argument.

87. The Tribunal proceeded on the basis that the

restructuring became complete with the issuance of

the order dated 19.07.2001. It must be noted that the

Original Application came to be filed on 19.11.2002

at a time when the Inspector Rules had not even been

finalized as the Rules came to be finalized only on

29.11.2002 and, in fact, brought into force till

later on 07.12.2002. Undoubtedly, the Note

contemplated, giving persons in Clause (a), viz.,

those falling in the pre-restructured cadre, the

benefit of taking into consideration the service

rendered in the restructured Cadre, for being

promoted as Inspector. The persons falling in the

restructured Cadre, were not conferred with such

advantage. However, by the time the Original

Application came to be heard, the Senior Tax

Assistants Rules 2003 came into force with effect

from 20.01.2003. Under Rule 5 of the 2003 Rules, the

persons working as Data Entry Operator Grade ‘B’,

inter alia, stood re-designated as Senior Tax
111
Assistants and they were also given the benefit of

reckoning the past service and calculating the

qualification of experience of two years under the

Inspector Rules, 2002. In fact, the Tribunal has also

taken note of the 2003 Rules. Both the persons in the

pre-structured cadre and those in the restructured

cadres, were, by virtue of Note 1 to Column 12 to the

2002 Rules and Rule 5(i) of the Senior Tax Assistants

Rules 2003, respectively, were given the benefit of

counting service as provided therein. The Tribunal,

in fact, has gone on to find that the Senior Tax

Assistants under Rule 5(i) of the 2003 Rules were

entitled to reckon their service as Data Entry

Operator Grade ‘B’ for eligibility for promotion as

Inspector. The Tribunal goes on to find that the

unified restructured cadre of Senior Tax Assistants

alone would be eligible for promotion as Inspector.

The integrated seniority is to be worked out in terms

of Rule 5 of the 2003 Senior Tax Assistant Rules.

This is based on the premise that with effect from

19.07.2001, the restructuring of Senior Tax Assistant

came into force and all the earlier Cadres stood

112
merged. We notice also the following findings by the

Tribunal:

The Tribunal noticing the contention of

the respondents that the selection process

initiated on 05.11.2002 has been finalized

from categories other than of the employees

i.e. Data Entry Operator Grade ‘B’ and ‘C’ and

the existing vacancies were filled-up, it was,

thereafter, found by the Tribunal as it is now

found that the appellants were also eligible,

the Original Application was to be disposed of

by directing the appellants be considered

eligible for promotion after considering the

service rendered by them as Data Entry

Operator Grade ‘B’. The Original Application

was accordingly disposed of directing the

appellants be considered for promotion based

on the years of service on the post of Data

Entry Operator Grade ‘B’ after allowing them

to appear for the examination contemplated in

Note 2 under the 2002 Inspector Rules. The

further relief granted was to direct to

113
promote them if they were successful and to

fix the seniority based on Rule 5. The

declaration which was sought for by the

appellants in paragraph 8(c) of the Original

Application, which we have already extracted,

was granted.

88. Thus, the Original Application has been allowed

in part. It is necessary to notice that the effect of

granting the said relief and also the effect of not

granting the reliefs in paragraph 8(b). Granting of

the Relief 8(c) would mean that this Court would also

have to accept that under the 2002 Inspector Rules,

it is only the restructured Cadre, which would be

entitled for promotion to the cadre of Inspector. To

put it differently, the persons falling in Category

(a), which corresponds to feeder categories, under

the 1979 Rules, would not be entitled for promotion

as Inspector.

89. It is now necessary to look at their prayer,

i.e., 8(b) and the effect of not granting any relief

thereunder. Prayer 8(b) was sought by the appellants

to set aside the Recruitment Rules communicated vide

114
28.10.2002, as confirmed vide Gazette of India

Notification dated 29.11.2002, incorporating the

unconscionable conditions under Clause (a) and Note 1

of Column 12 of the 2002 Inspector Recruitment Rules.

This prayer is also based on the restructuring

process, having effect from 19.07.2001. The Tribunal

has not granted the relief in paragraph 8(b) of the

Original Application. This means that the persons in

Category (a) of Column 12 of the Inspector Rules,

cannot be affected. The result is that it exposes the

fallacy in grant of Relief 8(c). In fact, there are

two basic flaws. In the first place, as we have

noticed, the restructuring did not come into effect

on issue of communication dated 19.07.2001. The

restructuring came into effect only with the issuance

of Rules, for reasons, which we would have already

explained. This by itself takes away the entire basis

of the Tribunal’s Order. Secondly, the Tribunal has

not declared the Statutory Rule infirm, which was the

specific relief sought for by the appellants in

Relief 8(b). In other words, Clause (a) of Column 12

and the Note, in the 2002 Inspector Rules impugned on

115
the one hand, continues on the Statute Book, whereas,

the declaration is purportedly granted under

paragraph 8(c), which necessarily involves declaring

that only persons re-designated under the

restructured cadres in Clause (b) as Senior Tax

Assistants, inter alia, would be entitled to be

considered for promotion as Inspector of Central

Excise and Customs. In fact, the Order of the

Tribunal at Chandigarh also did not involve granting

any exclusive right to the persons in the

restructured Cadre falling in Clause (b). The

decision of the Bombay High Court also does not

reflect any such reasoning. It is well-settled that

when Statutory Rules are challenged, they are upheld,

or if warranted, declared ultra vires or read down,

if possible. The Order of the Tribunal is specific

that what is granted, is the relief contained in

paragraph 8(c) of the Original Application.

Resultantly, Clauses (a) and (b) continued to be on

the Statute Book. The Tribunal has rather allowed the

Original Application partly and found that the

appellants are also entitled to be considered for

116
promotion as Inspector. In Arriving at this

conclusion, the Tribunal has drawn support

undoubtedly from the views expressed by the Central

Administrative Tribunal, Chandigarh, the Central

Administrative Tribunal, Madras and the High Court of

Bombay.

WHETHER STA COULD ADD SERVICE AS DATA ENTRY OPERATORS
AND WHETHER PERSONS IN CLAUSE (A) HAD AN EXCLUSIVE
RIGHT FOR TWO YEARS?

90. What is to be the eligibility condition flowing

from the requirement in Clause (b) that Senior Tax

Assistants should have put in two years’ service in

the Grade. It is the contention of the respondents

that what is contemplated by the Law Giver is that

only persons mentioned in Clause (a) to Column 12,

who were incidentally persons, who fell in the feeder

category under the 1979 Rules, are to be considered

for filling-up vacancies for a period of two years,

and it is therefore their contention that the right

of persons mentioned in Clause (b) arises only after

the expiry of two years, and till then, the persons,

who are qualified in Clause (a), are alone to be

considered during these two years. It is also seen

117
that the use of the word ‘Grade’ is referred to, to

contend that appellants, who were working as Data

Entry Operator Grade ‘B’, were not in the same Grade,

in terms of the pay-scale to which they became

entitled upon the restructuring coming into effect

w.e.f 20.01.2003. In other words, appellants, who

were on a lower pay-scale than the Senior Tax

Assistants, and thus only after 20.01.2003, when the

actual restructuring became a reality, the appellants

would commence working in the Grade, meaning the post

with the scale of pay attached to the post of Senior

Tax Assistant.

91. On the other hand, the case of the appellants is

that a perusal of the Rule 5 of Senior Tax Assistant

Recruitment Rules, 2003, would show that the

appellants were entitled to take into consideration

the service which was rendered by them prior to 2003.

We also notice another aspect, viz., there is the

case for the respondents that Note 1 to Column 12

contemplates that the service rendered by persons,

falling in Clause (a) in the restructured cadre,

could be considered for the purpose of calculating

118
the period required under Column 12. Therefore, an

attempt is made to contend that the provisions of

Rule 5 must also be understood in the said vein. Let

us look at the issue with concrete examples:

(i) An U.D. Clerk is eligible to be considered

for promotion as Inspector under Clause (a).

He has to, however, put in certain number of

years.

(ii) The U.D. Clerk, who has less than requisite

service as on 20.01.2003, in order that he be

considered for promotion as an eligible

person under Clause (a), it is quite clear

that he can add the service after 20.01.2003

as Senior Tax Assistant to the previous

service and make a claim for being

considered. The latter part of Note 1 to

Column 12, in our view, is only to clothe

persons falling in Clause (a) with the right

to add the service in the restructured Cadre.

But that is not to say that Rule 5 of the

Senior Tax Assistant Recruitment Rules, 2003,

has the same object.

119

92. Coming back to the issue, as to whether a person

falling within the four walls of Rule 5 of the 2003,

Rules can stake a claim for counting the previous

service prior to 20.01.2003, we are of the view that

the appellants are right that they are entitled to

count the previous service. The words used in Rule 5

are unambiguous and clear. In this regard, we must

also deal with the yet another contention based on

the differences between Rule 5 of the Senior Tax

Assistant Recruitment Rules, 2003 and Rule 4 of the

Tax Assistant Rules, 2003. It may be true that there

is some difference but, in our view, the words used

differently in the two provisions, are not meant to

take away the right, which was conferred on persons

who were on restructuring to be designated as Senior

Tax Assistants and Tax Assistants.

93. In Rule 5, what is contemplated is that the

service rendered by Data Entry Operators Grade ‘B’

and ‘C’, inter alia, before commencement of the Rules

is to be taken about for eligibility for promotion to

the next higher grade. No doubt, in Rule 4, of the

Tax Assistant Rules, the Rule Maker has become more

120
articulate. They have referred to the words like

‘respective post’, before commencement of Rules and

‘regular service’ which expressions are conspicuous

by their absence in Rule 5 of the Senior Tax

Assistant Rules. Better wisdom prevailed on the Law

Giver in the course of few months to attain clarity

in thought and expression but we would not be

gleaning the intention of the Law Giver, if we were

oblivious to the context and the object with which

the entire exercise of restructuring was carried out.

They would also amount to introducing an element of

discrimination between the Senior Tax Assistants and

the Tax Assistants in the conferring of benefits.

Of foremost importance is that the view we have taken

is warranted by even the plain words used in Rule 5.

Rule 5 clearly indicates that the service which was

rendered by a Data Entry Operator Grade ‘B’ and ‘C’,

inter alia, prior to the commencement of the Rules,

would be considered for promotion. This leaves us in

no doubt that the intention was to allow the Data

Entry Operator both Grade ‘B’ and ‘C’, inter alia, to

tag their previous service that is prior to

121
20.01.2003 for the purpose of calculating the

requisite period of service under the 2002 Inspector

Rules. It would appear that what was contemplated was

that the Inspector Rules and the STA Rules would be

brought into force at the same time. If it had so

happened, the following consequences would have

followed. Not only would STA would be a feeder

category but STA would have been able to count their

previous service as Data Entry Operator Grade ‘B’,

inter alia. Still further, under Note 1, promotion

under Clause (a), was to be operative for a period of

two years, from the date the restructured cadre,

under Clause (b), was to come into existence. Apart

from indicating that the restructured cadre ‘was to

come into force’ and, therefore, it had not come into

force as on 19.07.2001 as contended by the Data Entry

Operators, the promotion from Clause (a) being

predicated on the point of time when the restructured

cadre came into force, if the STA Rules were also

brought into force from 07.12.2002, the service

rendered by persons under the restructured Grade

122
could have been availed of by persons in Clause (a)

from 07.12.2002.

94. As regards the argument that under the 2002

Inspector Rules, persons in Clause (a) were given an

exclusive right to be promoted for a period of two

years, we see little merit in the same. Clause (c) of

Column 12 provides for promotion from the categories

thereunder, in the absence of persons falling in

Clause (b). No such rider is found in Clause (b). If

the STA Rules had been brought into force on

07.12.2002, then, it is clear that adding two years

as Data Entry Operator Grade ‘B’, the appellants

would certainly be eligible, particularly, keeping in

mind the intent in Order dated 28.10.2002. There can

be doubt that nothing stands in the way of appellants

and others similarly situated being considered from

20.01.2003 by adding the service as Data Entry

Operator Grade ‘B’. Both, persons in Clause (a) and

persons in Clause (b),

subject to being possessed of qualifications, could

compete for the vacancies. The right of those in

Clause (a), would come to an end from 19.01.2005.

123

95. The effect of STA Rules, 2003 coming into force

only on 20.01.2003 qua vacancies that existed prior

to 20.01.2003, the effect of promotion made from

other categories, and the direction by the Tribunal

to consider appellants for promotion and apply Rules

as to seniority.

96. There can be no doubt that the STA Rules came

into effect on 20.01.2003. The restructured cadre of

STA became a reality from 20.01.2003.

97. The problem, however, arises as what is to be

done qua vacancies of Inspector which were

purportedly filled-up as on 20.01.2003 pursuant to

Notice dated 05.11.2002 which was impugned in O.A.

1362 of 2002. The Tribunal has not interfered with

the notice dated 05.11.2002 but it has found that it

was not in accordance with the Rules (apparently

Inspector Rules 2002 which superseded the 1979

Rules). But this is again premised on the

restructuring becoming a reality with effect from

19.07.2001. This, we have found to be erroneous.

98. The Tribunal notices the contention of

respondents that selection has been finalised for

124
categories other than Data Entry Operator Grades ‘B’

and ‘C’ and existing vacancies were filled-up.

Thereafter, the Tribunal, on the basis that it found

appellants were also eligible, directed appellants to

be considered taking into consideration their service

as Grade ‘B’ and with opportunity to take the exam.

If they were found successful and selected as

Inspector, suitable seniority was to be assigned

based on Rule 5.

99. Here, it is necessary to notice that persons in

Clause (a), under the 2002 Rules, could be promoted

for a period of two years from the date the

restructured categories under Clause (b) came into

force. Thus, the promotion involving 2002 Rules from

Clause (a) could be for a two year from 20.01.2003 as

the restructured category came into force only on

20.01.2003, even according to the respondents. Thus,

for both categories in Clauses (a) and (b) (STAs),

their eligibility under 2002 Rules, commenced only

from 20.01.2003.

100. If so, the question would be the effect of

promotion already made as noted by the Tribunal

125
itself. As on 05.11.2002, the 1979 Rules governed

promotions. The status of the draft Recruitment Rules

is no longer res integra. While, promotion can be

based on draft Recruitment Rules, it cannot be done,

if the draft Rules are in the teeth of existing

Statutory Rules. In this regard, we may notice the

following discussion in Union of India through Govt.

of Pondicherry and another v. V. Ramakrishnan and

others10:

“28. Valid rules made under proviso
appended to Article 309 of the
Constitution operate so long the said
rules are not repealed and replaced. The
draft rules, therefore, could not form
the basis for grant of promotion, when
Rules to the contrary are holding the
field. It can safely be assumed that the
principle in Abraham Jacob; (1998) 4 SCC
65 : 1998 SCC (L&S) 995, Vimal Kumari;
(1998)4 SCC 114: 1998 SCC(L&S) 1018 and
Gujarat Kishan Mazdoor Panchayat;
(2003)4 SCC 712 : 2003 SCC (L&S) 565
that draft rules can be acted upon, will
apply where there are no rules governing
the matter and where recruitment is
governed by departmental instructions or
executive orders under Article 162 of
the Constitution.”

101. The Tribunal granted relief by giving the

declaration under 8(c), which we have found

10 2005(8) SCC 394

126
unwarranted. The High Court has found that regarding

the vacancies prior to 07.12.2002, it is to be

filled-up as per the 1979 Rules.

102. Thus, it is clear that vacancies were filled- up

as per notice dated 05.11.2002 from persons falling

under Clause (a), who corresponded to the feeder

category in the 1979 Rules. The appellants have not

laid any challenge to the Order of the Tribunal.

103. It is to be remembered that the ban on direct

recruitment was to come to an end on 31.12.2002.

There were 242 vacancies of Inspectors in Hyderabad

Commissionerate. It is true that under letter dated

28.10.2002, and even read with letter dated

14.11.2002, what was contemplated was promotion under

the draft Recruitment Rules for Inspector and STA.

Promotion orders were to be made only after GSR

Number were made for the Draft Rules, meaning

thereby, after it was finalised. They were intended,

as already found, to be operated at the same time,

thus, rendering both categories in Clauses (a) and

(b), to be considered. We are of the view that having

regard to the fact that vacancies were not filled-up,

127
as can be seen from communications dated 10.09.2001

and 05.06.2002, in the light of the restructuring

that took place in the Department, it would appear

that a conscious decision was taken to not fill-up

the vacancies arising from the restructuring based on

1979 Rules. Instead, communication dated 28.10.2002

clearly would show that the vacancies were to be

filled-up, based on the proposed new Recruitment

Rules. This being the case, the High Court was in

error in proceeding on the basis that the principle

in Y.V. Rangaiah (supra) would apply.

104. Till 07.12.2002, the STA was not even in Feeder

Category. We have also held that the STA Cadre is

born on 20.01.2003. There is a case for the

respondents that the ban on direct recruitment (which

is also a method of appointment) was to come to an

end. There was a need to have Inspectors in a larger

number of vacancies. The STA Cadre could not have

been used to fill the vacancies. The finding that

from 19.07.2001, the restructured Cadre came into

being, is unsustainable. In such circumstances,

though it may be true, intention was to fill-up the

128
vacancies after both sets of Rules were

operationalised, promotions were made. As to whether

it is legal, the answer can be that promotion, as per

extant Rules, given in vacancies prior to the new

Rules, is recognized. This is not a case where the

Authority was denying promotion to vacancies based on

the earlier Rules. We also notice that based on such

promotion, further promotions have been given. The

appellants were directed to be considered for

vacancies, which were filled-up after. We cannot, in

the circumstances, be persuaded to hold that the

Tribunal was right in directing the respondents to

revise the seniority qua promotion made earlier.

LEGALITY AND CORRECTNESS OF HIGH COURT DIRECTING
VACANCIES TO BE FILLED WHICH EXSISTED PRIOR TO
07.12.2002

105. The High Court has left open the question about

entitlement to promotion to vacancies after

07.12.2002. It has directed all vacancies, which are

prior to 07.12.2002, to be filled-up as per the 1979

Rules. While, we agree that the STA cadre was born on

20.01.2003, clearly, the whole purpose was to

simultaneously operate the Rules, both relating to

129
Inspector and STAs. This would have resulted in STA

being considered with the experience they had as Data

Entry Operator Grade ‘B’ also. This, as already

noticed, was a case where the Authority clearly

intended to fill-up the vacancies of Inspector under

the new Recruitment Rules. However, the vacancies,

which were filled-up, cannot be subjected to a review

based on Rules relating to seniority in Rules 5(i) of

the STA Rules, based on promotion orders on dates,

when on the dates, on which the vacancies stood

filled-up, the appellants were not even in the cadre.

106. But the High Court was not right in directing

filling-up of vacancies prior to 07.12.2002, based on

the 1979 Rules, as after the 2003 Rules came into

force, going by the intention of the Authority, the

right to promotion would be based on the new Rules,

even if the vacancies arose prior to the new Rules.

That is to say, when the High Court disposed of the

matter, if any vacancy remained to be filled-up in

the Cadre of Inspector, then, as the STA Rules had

come into existence on 20.01.2003, the STAs armed

with the right to add service as Data Entry Operator

130
Grade ‘B’, were entitled to be considered. However,

it is here that the impact of the matter, having been

pending in this Court for more than a decade, and, in

the meantime, the judgment being implemented and

further promotions being made, cannot be lost sight

of, even in an Appeal, which is maintained by grant

of Special Leave, as in this case. It is open to the

Court to decline to interfere. We bear in mind the

principles laid down by this Court in Taherakhatoon

(D) By Lrs. v. Salambin Mohammad11 and would not

disturb the direction to fill-up the vacancies which

arose prior to 07.12.2002, as directed.

VACANCIES OF INSPECTOR WHICH AROSE AFTER 07.12.2002

107. As noted, the High Court has left open the

question about entitlement to vacancies after

07.12.2002. The STA rules came into force on

20.01.2003. The restructured cadre of STA came into

force on that said day. We have already found that

STAs are entitled to count their previous service as

Data Entry Operators Grade ‘B’ for the purpose of

promotion under 2002 Inspector Rules. Even, persons

11 (1999) 2 SCC 635]

131
in Clause (a) of the 2002 Inspector Rules, would be

entitled to be considered for promotion under 2002

Rules from the date on which the restructured cadre

in Clause (b) came into force. Thus, both persons in

Clauses (a) and (b)(STA Cadre) became entitled to be

considered for promotion under the two sets of Rules

with effect from 20.01.2003. Certainly, the

appellants having worked as Data Entry Operator Grade

‘B’ are entitled to add the period of service as Data

Entry Operators Grade ‘B’. Thus, vacancies of

Inspector, to be filled-up by promotion, must be

filled-up by considering both on the basis of the

seniority, under Rule 5 of the 2003 STA Rules. The

appellants would be entitled also to be considered

for promotion based on the same on the basis of the

entitlement, as aforesaid.

CIVIL APPEAL NO. 1976 OF 2009

108. The appellants challenge the common judgment

passed by the High Court in Writ Petition No. 2378 of

2005 and Writ Petition No. 45 of 2005. The appellants

filed this Appeal with the leave of the Court as they

were not parties to the Writ Petitions. The Writ

132
Petitioners, two each in the two Writ Petitions, were

the four applicants (hereinafter referred to as ‘the

applicants’) in O.A. 1040 of 2003 filed before the

CAT, Hyderabad.

109. The case in brief, set up by the four applicants

before the Tribunal, was as follows:

Applicant nos. 1 and 2 were appointed as

Lower Division Clerk (L.D.) and they were working

as such. Applicant nos. 3 and 4 were appointed as

L.D. Clerks and were working as U.D. Clerks.

Applicant nos. 1 and 2 set the claim for

promotions as U.D. Clerk under the Recruitment

Rules of 1979. Applicant nos. 3 and 4, on the

other hand, claimed promotion as Tax Assistant

under the said Rules. There is reference to the

various orders, which we have already referred to

in connection with the post of Inspector,

including order dated 19.07.2001. It is the

further case that the respondents who, it may be

noted, were official respondents, had conducted

DPC for all other cadres upto Inspectors and

issued promotion orders. Only with regard to the

133
post of Inspector, promotion orders were not

issued before 31.12.2002 in view of the stay

passed in O.A. 1362 of 2002. The stay was vacated

on 31.12.2002 and the promotion orders were

issued on the same day. It is further stated that

promotions were given to the extent of 214 on

31.12.2002. Due to the delay, U.D. Clerks were

not being considered for promotion as Tax

Assistants and L.D. Clerks for U.D. Clerks. There

is discrimination. Meanwhile, new Recruitment

Rules, i.e., STA Rules 2003 and Tax Assistant

Rules 2003, which we have already referred to,

have come into force in the process of

restructuring and re-designating of the posts.

The said Rules are prospective in nature. The old

Rules prevailed till the new Rules came into

force. Even if the DPC is conducted after

31.12.2002, the vacancies that will be considered

would be only those which have arisen on or

before 31.12.2002. The restructuring cannot take

away the accrued rights. They sought promotion as

per the old Rules. A direction was sought to

134
promote them under the Rules as U.D. Clerks and

Tax Assistants from the date of their eligibility

and availability of vacancies with all

consequential benefits.

110. In their reply, the stand taken by the

respondents to the O.A. was as follows, inter alia:

Since restructuring was directed, it was

further directed that no vacancy included in the

restructuring, should be filled-up. The STA Rules

2003 and the Tax Assistant Rules 2003 came into

force. On the publication of the said

Notification of the STA Rules of 2003 on

20.01.2003, further promotions were regulated as

per the Notification. Under the Tax Assistant

Rules 2003, under Section 4, all the U.D. Clerks

were deemed to have been re-designated as Tax

Assistants and their promotions have to be

regulated further in the said cadre only. As far

as L.D. Clerks were concerned, under the 2003 Tax

Assistant Rules, on passing departmental

examination, they were to be deemed to have been

promoted as Tax Assistants. Thus, the stand was

135
that Applicant nos. 1 and 2 would, on passing

departmental examination under the 2003 Rules,

become Tax Assistant, whereas, Applicant nos. 3

and 4, who were U.D. Clerks, were deemed to have

been appointed as Tax Assistants in the very same

pay-scale and they have to work out the

promotions under the said cadre. Delay was

attributed to court cases. It was denied that

Department has not followed instructions in Order

dated 19.07.2002 as all the vacancies, which

arose before the restructuring, were duly filled-

up under the old Rules. It is lastly pointed out

that the chain vacancies in the Inspector cadre,

upon filling up the post of 373 posts of

Superintendent, were filled-up by following the

Recruitment Rules notified on 29.11.2002

superseding the earlier Recruitment Rules.

Filling-up of the post was done by from those

candidates working in the pre-structured cadre.

The consideration of the pre-structured cadre was

to be operative for two years from the date on

which the restructured cadre came into force. The

136
said promotions were part of restructuring

following the amended Rules. The Draft

Recruitment Rules were also notified for the

restructured Cadre and, as such, the contention

of the applicants that the said promotions were

done following the earlier Rules and as such they

were entitled to be considered based on the

earlier Recruitment Rules, was pointed as

untenable and liable to be rejected (Thus, it may

be noted that the stand taken in this O.A. by the

official respondents was the persons who were

promoted as Inspectors, were give promotions in

terms of their being part of the pre-structured

cadre). The Tribunal dismissed the O.A. by Order

dated 10.12.2004 after noticing the contentions

and noticing the arguments based on Y.V. Rangaiah

(supra) among the other decisions and found that

there is no case for grievance. Noticing that

with regard to one of the grievances, viz., need

to pass ministerial staff examination, it was

already redressed by deleting this requirement

for promotion as Senior Tax Assistant. Through

137
proceedings dated 04.06.2001, the further

contention relating to seniority was also dealt

with by noticing that since the date of their

entry into the feeder cadre would be one of the

relevant factors and it had not been finalised,

the applicants could represent against the

seniority. It also drew support from another

order passed by Tribunal in two other O.A.s dated

15.10.2004 (O.A.s 834-835 of 2009) and found that

the issue involved was one and the same and

agreed with it. It was found that the applicants

had been placed on the higher pay-scale.

111. The High Court, in the two Writ Petitions, filed

by the four Applicants, allowed the same drawing

support from the judgment rendered in the case

relating to the Inspectors and it found that

promotions to the post of U.D. Clerk and Tax

Assistant was to be made as per the old Rules in

respect of the vacancies which arose prior to

05.05.2003. Substantially, the contention, appellants

have taken, is based on Dr. Ramulu (supra). The

contention is also that the intention and the

138
conscious decision of the Government was not to fill-

up any vacancies by way of 100 per cent promotions

until the amended Recruitment Rules were notified in

the Official Gazette. There is also a case for the

appellants that the order of the High Court runs

counter to the judgment of the Bombay High Court and

the orders of the Tribunal which we have already

referred to in connection with other cases.

112. Under the 1979 Rules, on the basis of an

amendment, the post of Tax Assistant (old) was

incorporated by GSR 314 dated 12.07.1996. Thereunder,

post of Tax Assistant (old) was included in the 1979

Rules. Promotion to the post was to be from the post

of U.D. Clerk with three years’ service subject to

their passing a departmental exam with minimum marks

of 40 per cent. There are other rights given to

Senior Clerks under the Note. We have already

extracted the Tax Assistant Rules 2003. It is the

appellants case that it is established law that

vacancies created due to cadre restructuring shall be

filled in accordance with new Recruitment Rules.

There is reference, in fact, to order dated

139
26.09.2005, implementing the orders of the High

Court.

113. Under the 1979 Rules, the post of U.D. Clerk was

to be filled-up 50 per cent from direct recruitment

and 50 per cent by promotion. One of the feeder

categories was L.D. Clerks with seven years’ service

which was relaxable up to five years. The second

Feeder Category was Women Searchers recruited prior

to 09.05.1975 with five years’ combined service as

Women Searcher and L.D. Clerk and who have passed

departmental or promotional exam.

114. It may be noted that the 1979 Rules, insofar as

it related to the post of U.D. Clerks and Tax

Assistants, continued to remain in force even after

the promulgation of the Inspector Rules, 2002 and the

Senior Tax Assistant Rules. It is when the Tax

Assistant Rules were made in supersession of the 1979

rules so far as it related to the post of U.D. Clerk

and L.D. Clerk that the 1979 Rules ceased to apply.

Thus, 1979 Rules continued to be in force in regard

to the post of U.D. Clerk and L.D. Clerk till

05.05.2003.

140

115. Under the 2003 Tax Assistant Rules, brought into

force w.e.f. 05.05.2003, as contended by the official

respondents before the Tribunal, the persons working

as U.D. Clerks, were to be established as initial

cadre of Tax Assistants. So also, the L.D. Clerks,

upon passing the examination, were to become Tax

Assistants. The posts of U.D. Clerk and L.D. Clerk

are Group ‘C’ posts. No doubt, the ban, which was

imposed on direct recruitment, was to continue till

31.12.2002 (See Order dated 19.09.2002). By Order

dated 28.10.2002, which we have already extracted,

the draft Recruitment Rules for Inspector and Senior

Tax Assistants was communicated and the process was

to be set in motion and promotion was to await the

issue of Notification.

116. As far as the post of Tax Assistant is concerned,

by the order dated 06.11.2002, all the Chief

Commissioners were forwarded the draft Recruitment

rules for Tax Assistants which was approved by the

Ministry. The Commissioners were to initiate

necessary action for the process of DPC, etc. The

issue of any order passed under the draft Tax

141
Assistant Recruitment Rules was to await issue of

Notification of the said Rules. However, on

14.11.2002, it ordered, inter alia, that DPC in the

remaining Grades except DOSL-222 may be held on the

basis of the existing Recruitment Rules and the

promotion orders issued by 25.11.2002.

117. As far as the post of L.D. Clerks and old Tax

Assistants is concerned, the vacancies, which existed

as on 06.11.2002, were to be filled-up under the

existing Recruitment Rules (See letter dated

14.11.2002). The orders were to be issued by

25.11.2002. By 25.11.2002, the Tax Assistant Rules

were not even finalised, leave alone brought into

force. The Tax Assistant Rules came into force only

by publication on 03.05.2003 and brought into force

two days thereafter, i.e., on 05.05.2003. Going by

letter dated 14.11.2002, the principle that vacancies

must be filled-up in accordance with the existing

Rules, would appear to apply. The intention of the

Authority would also appear to be the same as is

evident from Clause (3) of Order date

14.11.2002.

142

118. In such circumstances, there is no scope for any

ambiguity and we are unable to find fault with the

order of the High Court.

SUMMARY OF CONCLUSIONS IN C.A. NOS.1970-1975 OF 2009

119. Summary of Conclusions in C.A. Nos. 1970-1975 of

2009, is as follows:

1)Promotion to the post of Inspector was governed

by the 1979 Rules till 07.12.2002.

2) Under the 1979 Rules, Data Entry Operators were

not among the feeder categories for promotion as

Inspector.

3)By 19.07.2001, Cabinet approved restructuring of

certain posts including the post of Inspector.

The number of posts of Inspector fell from a

little over 22000 to a little over 18000.

Thereunder, the post of Data Entry Operator Grade

‘B’ among other categories, were merged and the

cadre of Senior Tax Assistants emerged. However,

the restructured cadre of Senior Tax Assistants,

did not come into being.

4) The restructured Cadre of Senior Tax Assistants

was born with the bringing into force of the

Senior Tax Assistant Rules 2003, on 20.01.2003.

143
Data Entry Operators Grade ‘B’, among other

categories, were re-designated as Senior Tax

Assistants under Rule 5.

5) The Inspector Rules 2002, was brought into force

on 07.12.2002 superseding the 1979 Rules relating

to Inspectors.

6) The post of Senior Tax Assistant, which was not

among the feeder categories under the 1979 Rules,

became one of the feeder categories for promotion

as Inspector, under Inspector Rules, 2002 under

Clause (b) of Column 12.

7) There was a ban of promotion to the posts of

Inspector. This is clear from communications

dated 10.09.2001, 03.01.2002 and 05.06.2002. The

communication dated 28.10.2002 read with

communication dated 14.11.2002, establish that

the

Draft Recruitment Rules which were finalized on

29.11.2002 and brought into force on 07.12.2002

as far as Inspectors are concerned and Draft

Recruitment Rules finalized and brought into

force on 20.01.2002 as far as Senior Tax

144
Assistants are concerned, were to be basis for

promotion to the post of Inspector. As per Order

dated 28.10.2002, Departmental Promotion

Committee (DPC), was to operate, based on the

draft rules but no promotion orders were to be

issued till the draft rules were finalized. With

order dated 04.11.2002 even the promotion orders

were permitted. The authority apparently

contemplated simultaneous bringing into force of

the Inspector Rules and the STA Rules.

8)The High Court was in error in holding that it

has to be necessarily held that the vacancies

which arose prior to the revised Recruitment

Rules coming into force has to be filled-up under

then existing Rules (the 1979 Rules) relying upon

case law including Y.V. Rangaiah (supra). There

was a conscious decision taken to not fill-up

vacancies based on the restructuring, and what is

more, letters dated 28.10.2002 and 14.11.2002

show that promotion to the post of Inspector was

to be effected based on the new recruitment

rules.

145

9) It is while so, that in the Hyderabad

Commissionerate, by Notice dated 05.11.2002,

persons falling under Clause (a) of Column 12 of

the ‘Draft Inspector Rules’ who also corresponded

to the feeder categories under the ‘extant’

Statutory Rules, the 1979 Rules, alone were

called for selection as Inspector.

10) The benefit of reckoning service under Note 1 to

categories in Clause (a) would be available only

after the restructuring came into effect which

was on 20.01.2003. This also indicates that the

powers that be contemplated simultaneous

operation of the ‘Inspector Rules’ and the Senior

Tax Assistant Rules.

11) However, the Inspector Rules and the Senior Tax

Assistant Rules were enforced with a gap of about

six weeks.

12) The appellants even proceeding on the basis that

they were to be treated as Senior Tax Assistant

as on 07.12.2002, were not having the two years’

experience required under the 2002 Inspector

Rules.

146

13) With the 2003 Senior Tax Assistant Rules brought

into force on 20.01.2003 under Rule 5(1), the

appellants who were working as Data Entry

Operators Grade ‘B’ could take into consideration

their service as Data Entry Operators Grade ‘B’

for reckoning the period of two years stipulated

under the 2002 Inspector Rules. In this regard,

the finding of the Tribunal is correct.

Appellants in O.A. have stated that they were

promoted as Data Entry Operator Grade ‘B’ in

April 2000. If so, their service as such would

count and even as on 07.12.2002, they would have

2 years’ service as contemplated under the 2002

Rules. As on 20.01.2003, certainly, they would be

eligible to be considered for promotion as

Inspectors.

14) The Tribunal not having granted prayer 8(b), the

Draft Recruitment Rules, 2002 relating to

Inspectors as finalized which was impugned

remained intact. The Tribunal clearly erred in

granting the declaration, as sought for in

147
paragraph 8(c), recognizing exclusive right to

the restructured Cadre.

15) The restructuring Order under letter dated

19.07.2001, fructified and became complete and

effective relating to the post of Senior Tax

Assistant only on 20.01.2003. The findings to the

contrary by the Tribunal stood correctly set

aside by the High Court.

16) The Tribunal has not interfered with the

promotion already granted to persons drawn from

the categories other than the Senior Tax

Assistant pursuant to Notice dated 05.11.2002.

17) Ban of Direct Recruitment was to end on

31.12.2002. In respect of promotion made earlier

and not interfered with, the Tribunal could not

have directed review of seniority based on later

promotions as Inspector. The appellants cannot be

given seniority based on later promotions qua

promotions given, which cannot be termed illegal,

when as on the date of earlier promotions,

appellants were not even in the cadre. Promotion

from Senior Tax Assistant could have been made

148
only 20.01.2003 at the earliest. Even the

categories in Clause (a) could have been promoted

under the 2002 Inspector Rules, vide Note 1 only

for two years starting from the date the

restructured Cadre in Clause (b) come into force,

i.e., 20.01.2003.

18) We reject the contention that persons in Clause

(a) of Column 12 of the Rules, who were also in

the feeder categories for promotion under 1979

Rules, had an exclusive right to be considered for

promotion for a period of two years.

19) While promotions can be made based on Draft

Recruitment Rules, it cannot be so made, if the

Draft Rules are in the teeth of existing Statutory

Rules [V. Ramakrishnan and others (supra)]. In

this case, however, under Orders dated 28.10.2002

and 14.11.2002, what was contemplated was

processing by DPC under the Draft Recruitment

Rules and issue of the promotions orders after the

Draft Rules were finalized.

20) However, till 07.12.2002, under the 1979 Rules,

being also feeder categories under the said rules,

149
those in Clause (a) Column 12, 2002 Inspector

Rules could be promoted. While it may be contrary

to what was contemplated by the Central Authority

(as evident from letters dated 28.10.2002 and

14.11.2002) promotions were made, which could not

be termed illegal. Even the Tribunal has not set

aside the promotions.

21) The High Court has directed the filling-up of

vacancies prior to 07.12.2002 as per the 1979

Rules. In this regard, having regard to the fact

that the vacancies were not filled-up as per the

ban, as can be seen from 10.09.2001 and

05.06.2002, and it was specifically contemplated

under letter dated 28.10.2002 that vacancies

arising from restructuring be filled-up, as per

the new Recruitment Rules, the principle in Y.V.

Rangaiah (supra) may not apply and it was the

Rules as on date of filling-up the vacancies,

that would count. As on the date of the High

Court Order, the STA Rules 2003, had come into

force on 20.01.2003. Thus, vacancies existing

prior to 07.12.2002 and which were not filled-up,

150
must be filled-up by considering STA (Appellants)

including their service as Data Entry Operators

Grade ‘B’.

22) But it is here that the impact of the matter

remaining pending, and in the meantime,

implementation of the judgment and what is more,

further promotions being made cannot be lost

sight of. We bear in mind the principle laid down

in Taherakhatoon (D) By Lrs. (supra) and would

not disturb the directions to fill-up vacancies

which arose prior to 07.12.2002, as directed.

23) However, in case of vacancies of Inspector,

which arose after 07.12.2002, the appellants

would, undoubtedly, have a right to be

considered as explained hereinbefore. In regard

to such vacancies, the matter must be looked

into and seniority fixed, based on Rule 5 of the

STA Rules. The persons working in Clause (a) are

also entitled to be considered for a period of

two years from 20.01.2003 under the Inspector

Rules to be considered for promotion.

RELIEF IN CIVIL APPEAL NOS. 1970-1975 OF 2009

151

120. Civil Appeals Nos. 1970-1975 of 2009 are disposed

of as follows:

The restructured cadre of Senior Tax Assistants

came into force on 20.01.2003. Appellants are not

entitled to have seniority determined in respect of

vacancies of Inspector which arose prior to

07.12.2002. The appellants are eligible to be

considered for promotion from 20.01.2003 and they are

entitled to add their service as Data Entry Operator

Grade ‘B’ for the purpose of the 2002 Inspector Rules

and considered for vacancies to be filled by

promotion, which arose after 07.12.2002. The persons

in Clause (a) under Column 12 of the 2002 Rules, are

also entitled to be considered for two years from

20.01.2003. Seniority is to be considered based on

Rule 5 of the STA Rules. The exercise, as above, if

not carried out already shall be carried out. Further

promotions based on the above will be granted.

However, we direct that the promotions shall be

notional where promotions have already been effected,

however, entitling the parties to seniority and

152
pensionary benefits. The above exercise shall be

completed at the earliest.

121. Civil Appeal No. 1976 of 2009 will stand

dismissed.

122. There shall be no order as to costs in all the

appeals.

…………………..J.

(SANJAY KISHAN KAUL)

………………….J.

(K.M. JOSEPH)
NEW DELHI,
FEBRUARY 05, 2020.

153



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