D. Raghu and Others vs R. Basaveswarudu and Others etc.

Disposing of the appeals, the Court

HELD: 1.1 ANALYSIS

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 filledup 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, 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 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. 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. 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. [Paras 69-71] [146G-H; 147-A-D; 147-G-H; 148-A-D]

1.2 This communication establishes further, the following aspects:

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. 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 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. 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 Recruitment Rules, after the allotment of the GSR, which means the Notification of the Rules. 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. [Paras 72-75] [148-E-H; 149-A-B; 150-A-C]

2.1 WHEN CADRE RESTRUCTURING TOOK PLACE

Turning back to Note 1 to the 2002 Inspector Rules, it is noticed 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 it is held 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 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. The Court is not oblivious and has 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, the Court, 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 ‘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. The Court 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. 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 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. Further support is found 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 redesignated 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 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. Note 1, in Column 12 of the 2002 Inspector Rules 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 come into existence. It came into existence, indeed, in the future, viz., on 20.01.2003. 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 ‘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. [Paras 81-85] [153-F-H; 154-A-H; 155-A-H; 156-A-B]

3.1 APPELLANTS RIGHTS AS SENIOR

ASSISTNATS ON RESTRUCTURING

TAX

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 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 prestructured 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 merged. [Para 87] [157-A-G]

3.2 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. 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 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, 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. 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 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 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. [Paras 88, 89] [158-C-H; 159-A-D]

4.1 WHETHER STA COULD ADD SERVICE AS DATA

ENTRY OPERATORS AND WHETHER PERSONS IN

CLAUSE (A) HAD AN EXCLUSIVE RIGHT FOR TWO

YEARS?

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, the Court 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. 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 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 the Court would not be gleaning the intention of the Law Giver, if it 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 the Court has 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 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 could have been availed of by persons in Clause (a) from 07.12.2002. 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, little merit is seen 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. 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. [Paras 92-96] [160-G-H; 161-A-H; 162-A-E]

4.2 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, has been found to be erroneous. 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. If so, the question would be the effect of promotion already made as noted by the Tribunal 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. [Paras 97-100] [162-E-H; 163-A-C]

4.3 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. 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. Having regard to the fact that vacancies were not filled-up, 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 would apply. Till 07.12.2002, the STA was not even in Feeder Category. It has also been 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 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. It is also noticed that based on such promotion, further promotions have been given. The appellants were directed to be considered for vacancies, which were filled-up after. The Court 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. [Paras 102-104] [163-G-H; 164-A-H]

5. LEGALITY AND CORRECTNESS OF HIGH COURT

DIRECTING VACANCIES TO BE FILLED WHICH

EXSISTED PRIOR TO 07.12.2002

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 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. The Court bears in mind the principles laid down by this Court in Taherakhatoon (D) By Lrs. v. Salambin Mohammad and would not disturb the direction to fill-up the vacancies which arose prior to 07.12.2002, as directed. [Para 106] [165-D-H]

6. VACANCIES OF INSPECTOR WHICH AROSE

AFTER 07.12.2002

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. [Para 107] [166-CE]

7.1 CIVIL APPEAL NO. 1976 OF 2009

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. 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. 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. 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, 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. [Paras 112-115] [169-B-H; 170A-B]

7.2 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 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. 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. In such circumstances, there is no scope for any ambiguity and the Court is unable to find fault with the order of the High Court. [Paras 116-118] [170-B-G]

8. SUMMARY OF CONCLUSIONS IN C.A. NOS.19701975 OF 2009 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. 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 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 filledup 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. 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.

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 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 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) 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 is rejected. 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]. 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, 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 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, 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. The Court bears in mind the principle laid down in Taherakhatoon (D) By Lrs. 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. [Para 119] [170-G-H; 171-A-H; 172A-H; 173-A-H; 174-A-H; 175-A-D]

9. RELIEF IN CIVIL APPEAL NOS. 1970-1975 OF 2009 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, it is directed that the promotions shall be notional where promotions have already been effected, however, entitling the parties to seniority and pensionary benefits. The above exercise shall be completed at the earliest. [Para 120] [170-D-G]

10. Civil Appeal No. 1976 of 2009 will stand dismissed.

Union of India through Govt. of Pondicherry and Another v. V. Ramakrishnan and Others (2005) 8 SCC

394 : [2005] 4 Suppl. SCR 291 ; Taherakhatoon (D) By LRS. v. Salambin Mohammad (1999) 2 SCC 635 : [1999] 1 SCR 901 – relied on.

Y.V. Rangaiah and Others v. J. Sreenivasa Rao and Others (1983) 3 SCC 284 – held inapplicable. P. Ganeshwar Rao and Others v. State of A.P. and Others (1988) Suppl. SCC 740 : 1988 Suppl. SCR

805 ; P. Mahendran and Others v. State of Karnataka and Others (1990) 1 SCC 411 : [1989] 2 Suppl. SCR

385 ; A.A. Calton v. Director of Education (1983) 3 SCC 33 : [1983] 2 SCR 598 ; N.T. Devin Katti and Others v. Karnataka Public Service Commission and Others (1990) 3 SCC 157 ; K. Ramulu (Dr.) and Another v. (Dr.) S. Suryaprakash Rao and Others (1997) 3 SCC 59 : [1997] 1 SCR 287 ; Deepak

Agarwal and Another v. State of U.P. and others (2011)

6 SCC 725 : [2011] 4 SCR 149 ; M.I. Kunjukunju and Others v. State of Kerala and Others (2015) 11 SCC

440 ; State of Tripura and Others v. Nikhil Ranjan Chakraborty and Others (2017) 3 SCC 646 –

referred to.