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Issues: (i) Whether the State Government could alter, by executive order, the departmental promotion requirements applicable to allocated Assistant Sales Tax Officers without prior approval of the Central Government under the States Reorganisation Act, 1956; (ii) Whether the State Government could fix the inter se seniority of allocated Assistant Sales Tax Officers and Sales Tax Inspectors by treating the former as an isolated category above the latter.
Issue (i): Whether the State Government could alter, by executive order, the departmental promotion requirements applicable to allocated Assistant Sales Tax Officers without prior approval of the Central Government under the States Reorganisation Act, 1956.
Analysis: The promotion rules applicable to the allocated officers from the former States of Madhya Pradesh and Hyderabad were part of their conditions of service. The State Government's directions of 1964 did not create a new rule of service by executive fiat; they corrected the improper application of Bombay rules to officers governed by different pre-existing service rules. The distinction between a mere chance of promotion and an enforceable condition of service was material, and the State could not lawfully place the allocated officers at a disadvantage by applying a test not forming part of their original service conditions.
Conclusion: The impugned executive directions were valid and did not unlawfully alter the conditions of service; the issue is answered in favour of the Appellant.
Issue (ii): Whether the State Government could fix the inter se seniority of allocated Assistant Sales Tax Officers and Sales Tax Inspectors by treating the former as an isolated category above the latter.
Analysis: In integrating services after reorganisation, equation of posts had to be made by reference to the nature and duties of the posts, the powers attached to them, the territorial responsibilities and the prescribed qualifications. The Assistant Sales Tax Officers from Madhya Pradesh and Hyderabad occupied posts materially superior in status and responsibility to the Sales Tax Inspectors from Bombay. The Central Government's decision to keep them in an isolated category and to place them above the Bombay Inspectors was consistent with the governing principles of integration and with the requirement of fair and equitable treatment under the Act.
Conclusion: The seniority arrangement made by the State Government under the Central Government's directions was valid; the issue is answered in favour of the Appellant.
Final Conclusion: The judgment under challenge was set aside because the State Government's actions in integration, seniority fixation and promotional treatment were upheld as consistent with the statutory mandate of fair and equitable treatment.
Ratio Decidendi: In the integration of services under the States Reorganisation Act, 1956, the State Government may act in conformity with Central Government directions to preserve fair and equitable treatment, and pre-existing service conditions of allocated employees cannot be altered to their disadvantage by applying rules of another integrating unit that never formed part of their original service regime.