TaxTMI 
TaxTMI 
2009 (9) TMI 79
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...., who were present in the Court, felt that the issue was complex and would, therefore, require to be first decided, before deciding the merits of appeal. It was argued before the Division Bench that it was inherent duty of the ITAT in the light of the provisions of section 254 of the Income-tax Act, 1961, first to dispose of the preliminary issues, such as this, before disposing of the appeal on merits. The Division Bench also felt that, in the interest of justice, it is necessary that this matter receives uniform treatment so that one may avoid unnecessary and avoidable multiple litigations. Prima facie, the Division Bench was of the opinion that the issue required reference to Special Bench and therefore, drew a reference to the President, ITAT ('President' in short), on 10-7-2009. The Division Bench also suggested the President to explore the possibility of the Ministry of Law and Justice being given a notice of hearing so that they may make a representation as regards the exact objectives and implications of the said Rule 13E and also to represent the Government in support of the said Notification. It appreciated the fact that the Departmental Representatives may not po....
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....on behalf of the Ministry, Sr. Central Government Counsel, Shri A.K. Bhardwaj, put in the appearance. 4. At the out set, a preliminary objection was taken by the Sr. Central Government Counsel that this Tribunal has no jurisdiction to go into rule 13E, which is the part of the I.T.A.T. (Recruitment and Conditions of the Service) Rules, 1963 and pleaded that no further hearing is necessary on this issue and that the issues be directed to Central Administrative Tribunal ("CAT" in short), who according to him, is the proper forum for disposing of such matter. 5. The assessee's counsel as well as the interveners vehemently argued that ITAT is the only proper forum to adjudicate preliminary issues, such as, capacity of the parties' representative or as to their qualification or disqualification to appear before the Tribunal. It is very fundamental issue that requires adjudication before the appeal is taken up on merits. If ITAT were to wrongly permit a person who is not qualified to appear in a case or a qualified person is denied his right of opportunity to argue the matter, a grave injustice is caused and, therefore, it is absolutely necessary as a part of its incidental....
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....r and proper that they should be directed to go before the CAT and not argue their entitlement before the ITAT. 9. On the other hand, the learned counsel for the assessee as well as the interveners, appearing, vehemently argued that this Tribunal is the only forum where the issue of this nature requires to be adjudicated. The ITAT Jaipur Bench in the case of Sagarmal Sarawgi v. ITO vide its order dated 10-8-1976 in ITA No. 473/Jp/1973-74, (1976) 2 TTJ (JP) 1371, went into such questions, when similar issues were raised. Similarly, ITAT Mumbai Bench 'A' in the case of Tata Chemicals Ltd. v. Dy. CIT vide their order dated 5-12-1997 ITA No. 4604/Mum./(1998) 67 ITD 56, went into the question whether particular DR was validly appointed by the Department and whether he could argue the case before the ITAT. The Tribunal disposed of and adjudicated the same, meaning thereby the Tribunal is the only forum, where such issues require to be thrashed out. It was pointed out by them that they having already retired from Government service, cannot approach the CAT. They pleaded that since right to appear before the ITAT is being questioned, only the ITAT has to deal and dispose them. O....
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....estions of fact and law raised in the appeal before it. But the Tribunal cannot make arbitrary decisions. It cannot found its judgment on conjectures, surmises or speculation. In the exercise of its powers, the Tribunal is vested with a large area of discretion in a number of matters such as condoning the delay in filing of the appeal, admission of new pleas and additional evidence, conduct of further enquiry on its own or by remand to the lower authorities, passing such orders on the appeal as the interests of justice may require and so on. The discretion, thus, conferred is an impartial legal discretion to be exercised in conformity with the spirit of the law and in such a manner as to subserve, and not defeat, the interests of justice or furtherance of its cause. It should be guided by law and should not be arbitrary, capricious, vague, fanciful or governed by humour, unthinking folly or rash injustice. 12. Section 254 provides that "Save as provided in section 256 or section 260A, orders passed by the Appellate Tribunal on appeal shall be final". Under section 256, the High Court has only reference jurisdiction on questions of law framed by it. Now, after the amendment with ....
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....ve now at that point of time when the prayer for stay was made. The assessee then moved the Kerala High Court under article 226 of the Constitution. The Kerala High Court in the case of M.K. Mohammed Kunhi v. ITO [1966] 59 ITR 171, held that the Tribunal had the power to stay the proceedings as also the collection of the penalties pending the appeal since that power was incidental and ancillary to its appellate jurisdiction. The Tribunal was consequently directed to dispose of the stay application in accordance with law. The revenue challenged further. Their Lordships of the Supreme Court observed that the right of appeal is a substantive right and the questions of fact and law are at large and are open to review by the Appellate Tribunal. The Tribunal has been given very wide powers under section 254(1), for it may pass such orders as it thinks fit after giving full hearing to both the parties to the appeal. If the ITO and the Appellate Assistant Commissioner have made assessments or imposed penalties raising very large demands and if the Tribunal is entirely helpless in the matter of stay of recovery, the entire purpose of the appeal get defeated if ultimately the orders of the d....
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....th appeals are of the widest amplitude and have in some cases been held similar to and identical with the powers of an appellate court under the Civil Procedure Code: see Commissioner of Income-tax v. Hazarimal Nagji and Co. and New India Assurance Co. Ltd. v. Commissioner of Income-tax/Excess Profits Tax." 16. The Supreme Court upheld that the ITAT has a power to grant the stay although there were no express provisions in the Act, as a part of the incidental or ancillary to its appellate jurisdiction. It was observed by the Supreme Court that when section 254 confers appellate jurisdiction on ITAT, it impliedly grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders for staying proceedings as well to prevent the appeal if successful from being rendered nugatory. 17. In the light of the aforesaid principles laid down by the Supreme Court, we Will examine the provisions of section 254(1), which mandates the Tribunal to give to both the parties to appeal an opportunity of being heard in the matter. If one of them is denied or a proper....
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....ental Representative, protecting the interest of the revenue was in question and the Tribunal adjudicated these issues. Therefore, we entirely agree with the view taken by the Jaipur Bench and the Mumbai Bench in this regard. 19. The Delhi High Court in the case of Taylor Instrument Co. (India) Lid. v. CIT [1998] 232 ITR 771 has held that the Tribunal cannot determine whether or not a provision violates Articles of Constitution. The Tribunal being a creature of the Income-tax Act, can only confine itself to the provisions of the Act and cannot pronounce upon the constitutional validity or vires of any provision of the Act. 20. We are aware of the limitation. With this caution, we reach a conclusion that the Tribunal is competent to go into the questions as raised in these cases and we proceed to take up the issue that have arisen as a result of the Notification, which has a direct bearing on the process of hearing. 21. Rule 13E, which is the bone of contention, is inserted by the Notification G.S.R. 389(E), dated3-6-2009. This is issued by the Ministry of Law and Justice and reads as under: "13E. The President, the Senior Vice-President, the Vice-President and the....
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....ii) Classification of the Members, whether prohibited from appearing before the ITAT. Whether, the said prohibition applies to the ex-Members or the present Members or only the Members who join hereafter. 24. Among the ex-Members, there is an important classification, as to the position of resigned Members and the Members who superannuated after their full length of service. The Special Bench has addressed itself on all the above questions. We take up the case of resigned Members and after hearing their arguments dispose of their matters. We will take up the cases of retired Members separately and dispose off their issues. According to us, persons mentioned at (1) to (5) fall under this category of resigned Members - (1) Dr. Rakesh Gupta Advocate; (2) Shri Ved Jain, CA; (3) Shri Anoop Sharma, Adv.; (4) Shri Salil Kapur, Adv.; and (5) Shri Y.K Kapoor, Adv. The case of the resigned Members is quite interesting. We will take facts of each of the resigned Members for a better appreciation. 25. Dr. Rakesh Gupta, advocate, was appointed as an Accountant Member in the ITAT vide his appointment letter dated20-7-2000. His post itself was advertised to be temporary and the terms and co....
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....n 1984 to 2000 and appeared before Delhi Benches of the ITAT in various cases from 1990 to 2000. After he resigned, Dr. Gupta started practicing as an advocate from May 2001 and has been appearing before the Tribunal mainly before Delhi Benches of the ITAT regularly since then. It was stated by him that he was never posted at Delhi Benches where he has been practicing. It may be mentioned that before he resigned, he was posted at Hyderabad Benches of the ITAT. The case of Dr. Rakesh Gupta is that he is not hit by Notification No. GSR 389(E), dated3-6-2009and is entitled to appear for the parties despite Rule 13E of the Income-tax Appellate Tribunal Members (Recruitment and Conditions of Service) Rules, 1963, as according to him he is not the one who retired from the service of the Tribunal but he has resigned from service that too during the probation period itself. He was not even confirmed in the service from the post that was always remained temporary during his service and subject to several stipulated uncertain conditions. Only the persons specified in the said Notification who retire from service of the Tribunal are only prohibited. According to him, he has not retired from s....
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...., according to him, was noticed by the Supreme Court in the case of UCO Bank v. Sanwar Mal AIR 2004 SC 2135. In that case, according to Shri Rakesh Gupta, the Supreme Court went through different regulations and opined that the expressions 'resignation' and 'retirement' have been employed for different purposes and carry different meanings. An employee can resign at any point of time even on the second day of his appointment but in case of retirement he retires only after attaining the age of superannuation or in case of voluntary retirement, on completion of qualifying service. The effect of resignation and retirement to the extent that there is severance of employment is common but in service jurisprudence both the expressions are understood differently. According to him, the decision of the Supreme Court in the case of UCO Bank takes him and like interveners, out of the purview of rule 13E of the Income-tax Appellate Tribunal Members (Recruitment and Conditions of Service) Rules, 1963. Reliance was also placed on the ratio of decision of Rajasthan High Court in the case of Sohan Lal Soni v. State of Rajasthan RLW 2007 (2) Raj. 1044. 29. Our attention was drawn....
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....Government service on probation means.... That the servant so appointed is taken on trial". 31. Dr. Rakesh Kumar Gupta argued that in his case even the appointment as not to a permanent post. Our attention was further drawn to the decision of the Supreme Court in the case of State of U.P. v. Kaushal Kishore Shukla [1991] 1 SCC 691 wherein it has been held that probationer does not acquire any substantive right to the post and his right to continue would arise only on confirmation. The Supreme Court in the case of Purshottam Lal Dhingra has held that before confirmation a probationer has no right to hold the post. To the same effect is the decision of Supreme Court in the case of S.P. Vasudeva v. State ofHaryana AIR1975 SC 2292 as also the decision ofApex Courtin the case of State ofU.P.v. Akbar Ali Khan AIR 1966 SC 1842. In the latter case, it was held that so long as a person continues as a probationer, he acquires no substantive right to hold the post; and in the first case, according to Dr. Gupta, it was held that ad hoc or temporary employee has no right to the post. In view of the aforesaid decision of the Supreme Court in so many cases, it cannot be said that he is the one....
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....of State of M.P. v. Shardul Singh [1970] 3 SCR 302; and I.N. Subba Reddy v. Andhra University [1976] 3 SCR 1013, wherein it has been held that the expression "conditions of service" means all those conditions which regulate the holding of a post by a person right from the time of his appointment till his retirement and even beyond it in matters like pension. 32. Next attention was drawn to the decision of Supreme Court in the case of State of Punjab v. Kailash Nath [1989] 1 SCC 321, wherein their Lordships have held that the term "conditions of service" would include the following: (i) Salary or wages including subsistence allowance during suspension (ii) Periodical increments (iii) Pay scale (iv) Leave (v) Provident fund (vi) Gratuity (vii) Confirmation (viii) Promotion (ix) Seniority (x) Tenure or termination of service (xi) Superannuation (xii) Compulsory or premature retirement (xiii) Pension (xiv) Changing the age of superannuation (xv) Deputation (xvi) Disciplinary proceeding. 33. Dr. Gupta submitted that even for the sake of ar....
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....the Income-tax Act from appearing before the ITAT. It will be denial of opportunity, which, according to him, is not warranted even on the basis of decision of Delhi High Court in the case of P.C. Jain. 35. In the case of Shri Ved Jain by letter dated21-11-1997, he was offered the post of Accountant Member in ITAT. The conditions on which the post was offered, were the same as in the case of Dr. Rakesh Kumar Gupta, except condition No. 13 as spelt out in the case of Dr. Rakesh Kumar is not there. On27-3-1998, Shri Ved Jain submitted his resignation to the President, which was accepted with effect from the afternoon of27-4-1998by the Government. It may be mentioned that the duration of Shri Ved Jain as Member in the ITAT was approximately for a period of 4 months. It was pointed out by Shri Ved Jain that he did not preside over any of the Benches of the ITAT and he was purely on orientation and training atHyderabadduring that period. The arguments of Shri Ved Jain are identical to the one that were made by Shri Rakesh Kumar Gupta. 36. In the case of Shri Anoop Sharma, advocate, he joined the ITAT as Judicial Member at Mumbai on 27-3-1989 and resigned from service on 31-5-1990,....
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....itions of Service) Rules, 1963. Our attention was specifically drawn to para 26 of the decision of the Delhi High Court in the case of P.C. Jain, as reproduced below: "26. In our view, the two cases cited by the petitioners are clearly distinguishable. In both the cases the Court struck down the bar placed on the legal practitioners to practice before the Tribunal constituted under the concerned statutes on the ground that the prohibition was enacted by the State which trenched upon the right to practice conferred by a law enacted by the Parliament and hence the Stale law was bad insofar as it trenched upon the law enacted by the Parliament. In the instant case, the impugned provision is incorporated in the central statute. Hence, the said ratio of these aforementioned decision would not apply to the instant case." 38. Our attention was drawn to the decision of the Supreme Court in the case of T.R. Kapur v. State ofHaryana AIR1987 SC 415. According to him, his case along with like persons who had resigned and not retired, much before the date of promulgation of the impugned Notification dated 3-6-2009, thus, cannot said to be affected by it, even if it is assumed though....
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....nce of such Members also. In view of dignity of office and perception of bias, such Members on their own should refrain from appearing and practicing before the Tribunal wherein they have adjudicated the dispute of others. According to him, although many of the interveners have questioned the legislative competence for enacting rule 13E into the service conditions and have also questioned its validity as discriminatory and violative of articles 14, 19 and 309 of the Constitution of India, insofar as these questions are raised by the interveners, this Tribunal is not competent to go into the warrants of the legislation in the manner canvassed by the interveners and it should be rejected at the threshold. As a result, the Members who have resigned from such posts while they were in probation an analogy may be drawn to article 220 of the Constitution, where provision of appointment of a permanent judge of the High Court and persons who have resigned before becoming permanent may not be debarred under article 221 of the Constitution. On the same analogy such Members of the Tribunal who resigned from service when not confirmed without retirement benefits may plead that they should not b....
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.... on the decision of the Supreme Court in the case of Slate of Punjab v. Kailash Nath AIR 1989 SC 558. According to him, this decision, carried the scope of article 309 even beyond the period after retirement. The ratio laid down in this case, according to him, supported the view canvassed by the Ministry of Law & Justice in this regard. The prosecution of an employee who long back retired, was upheld by theApex Courteven after the retirement as a part of conditions of service. The learned Sr. Central Government Counsel pleaded that no employee can have any vested right as to the terms and conditions of service. The Government can always vary the terms and conditions of service. The learned counsel heavily relied upon the decision of the Delhi High Court in the case of P.C. Jain, which according to him, answers all the possibility in favour of upholding the type of legislation that is brought out by amendment to the recruitment rules. 43. The learned Departmental Representative who appeared on behalf of the department had nothing more to say than what has been submitted by the Sr. Central Government Counsel in the matter. 44. Now we take up the cases of other classes of person....
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.... In fact in the case of P.C. Jain, their Lordships were dealing with the legislative provision in the form of section 129(6) of the Customs Act and not the condition of service. According to him, rule 13E must be ignored as it cannot be made under the proviso to article 309 of the Constitution of India. Our attention was drawn to the decision of Supreme Court in the case of D.R. Yadav v. R.K. Singh AIR 2003 SC 3935, wherein it was held that on a plain reading of the said provision, there cannot be any doubt whatsoever that rules framed there under would apply so long as a statute or statutory rules or any other subordinate legislation governing the conditions of service are not enacted or made or not otherwise operating in the field. According to him, rules made under proviso to article 309 of the Constitution are for a transitory period and the same would give way to the special rules once framed. The provisions of section 288 lay down the qualification of a person who may appear as an authorized representative of an assessee who is entitled or required to attend before any Income-tax authority including Income-tax Appellate Tribunal. It also prescribes the persons who are not per....
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....word. They are bodily lifted provisions. Nothing prevented the Parliament from inserting in the provisions of section 252 which is in pari materia with section 129 of the Customs Act. If that course would have been adopted by the Parliament, it could be argued that the decision of Delhi High Court in the case of P.C. Jain settles the matter in all fours. The provisions are not made that way. Nor the provisions of section 288 of the Income-tax Act are amended to bring in the disqualification into the Act. The executives wanted to insert rule 13E in the Service Conditions which, according to him, as already stated earlier, does not apply to the persons who have already retired and there is a vast difference in the language of section 129(6) and rule 13E inserted by the impugned Notification. Drawing these differences, the learned intervener wanted us to keep these differences in mind before denying the interveners who are duly qualified from assisting the Court in the matters of appeal arising under the Income-tax Act. Mr. Tiwari has listed some of the names of persons who have retired and who are practicing:- 1. Shri G.C. Khanna 24-6-1949 2. Shri A.N. Kirpal 23-2-1....
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.... wherein their Lordships have observed as under:- "It is well-settled rule of construction that every statute or statutory rule is prospective unless it is expressly or by necessary implication made to have retrospective effect. Unless there are words in the statute or in the rules showing the intention to affect existing rights the rule must be held to be prospective. If a rule is expressed in language which is fairly capable of either interpretation it ought to be construed as prospective only. In the absence of any express provision or necessary intendment the rule cannot be given retrospective effect except in matter of procedure." 49. Shri Tiwari pointed out that when rules are framed under proviso to Article 309 of the Constitution, the Courts have always read a severe limitation to their retrospective operation. The retrospective operation of a rule shall not prejudice a person already appointed to a service or post and it shall not take away any vested rights in the person already appointed to a service or post. Our attention was drawn to the ratio laid down by the Supreme Court in the cases of T.R. Kapur; D.P. Sharma v. UOI [1989] 1 SCR 791; and R.S. Ajara v. S....
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....nts of the service conditions in relation to the retired employees are liable to be held not valid. The invalidity even for a limited period was not allowed to prevail whereas in the instant case, the learned intervener pointed out, is a life long ban on retired employee who is caught unaware. Again our attention was drawn to the Halsbury's Laws of England on "Retrospective effect of a Statute". The distinction was also drawn between retrospective and retroactive legislation. It is a cardinal rule of Principle of Construction that every statute is prima facie prospective unless it is expressly or by necessary implication made to have retrospective operation. But the rule in general is applicable where the object of the statute is to affect vested rights or to impose new burdens or to impair existing obligations. Unless there are words in the statute sufficient to show the intention of the Legislature to affect existing rights, it is deemed to be prospective only. Our attention was also drawn to the decision of the Supreme Court in the case of K.S. Paripoornan, wherein it deals with the rules of interpretation in this regard. Our attention was drawn to the decision of the Suprem....
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.... is strange that the Ministry has taken a stand that Rule 13E of the ITAT Members (Recruitment and Conditions of Service) Rules, 1963 falls within the scope of words "conditions of service". According to him, the recruitment rules can be made applicable to the persons who are to be recruited thereafter and cannot be applied to the persons who have already retired from service before the date of the impugned notification. For these reasons the Addl. Solicitor General who argued the case before the Delhi High Court in the case of P.C. Jain, conceded that bar to practice imposed on ex-Members was not a condition of service. Therefore, that being the position, it cannot be permitted to argue here that such a rule is a condition of service when it came to the identical provisions in the case of ITAT. According to him, the expression 'condition of service' itself was construed by theApex Courtin the case of Kailash Nath, classifying the services failing within the purview of 'condition of service' (as reproduced in earlier part of the order). In view of the above judgment, it cannot be said that the bar to practice falls within the term 'condition of service' as i....
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....ber of the ITAT and, therefore, rules or conditions of service applicable to the serving employee cannot be applied to persons no longer in service. 55. Shri Keshav Prasad, Advocate, fairly admitted that as regards the main contention is concerned, he is with all other interveners. He drew our attention to the decision of Delhi High Court in the case of P.C. Jain and submitted that in the aforesaid decision a brief history leading to the insertion of sub-section (6) to section 129 of the Customs Act has been given. In the year 1986 the Parliament enacted the Customs and Excise Revenue Appellate Tribunal Act ("CERAT" Act in short) for setting up a Tribunal in consonance with the power contained in Article 323B of the Constitution of India. Section 11(c) of the said Act barred the President, Vice President or the Members from appearing, pleading before the said Tribunal or CEGAT after their retirement. However, due to the decision ofApex Courtin the case of L. Chandrakumar v. Union of India [1997] 3 SCC 261, the said CERAT Act was repealed in 2004. Since then the issue was being discussed at the highest level and sub-section (6), which was inserted by the Finance Act, 2007, is the....
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....t date. According to him, no rule can be made under Article 309 in relation to persons who have already retired from service. The proviso of this Article, according to him, is nothing but delegation of powers of rule making to subordinates, instead of being made by the appropriate Legislature. Forcibly it is pleaded that the said rule cannot be made to those persons who have already retired. Any amendment to the rules of recruitment can be made to the persons who are joining the service after that date. As regards the conditions of service, it can be for the persons who are serving the institution or who will be serving in future, but definitely not to the persons who have already retired. He gave an example. Rule 3(2) of the ITAT Members (Recruitment & Conditions of Service) Rules, 1963 prescribes the qualification for appointment as an Accountant Member. Clause (ii) of sub-rule (2) of the original Rule had provided that the person who had worked as an Asstt. Commissioner of Income-tax for three years, was eligible for appointment as Member. It was amended by amendment in the above rules and it provided that persons who have worked as Commissioners of Income-tax for 3 years were e....
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....l Shri A.K. Bhardwaj in relation to the Members who retired before3-6-2009, vehemently contended that in the light of the decision of the Delhi High Court in the case of P.C. Jain to which jurisdictionally this Bench of the ITAT falls is binding upon it. He submitted that the contentions of several interveners including the one who retired have all been answered by the Delhi High Court and therefore the principle laid down therein is applicable retrospectively to the Members who have already retired. Reliance was placed on the decision of Supreme Court in the case of Kailash Nath and contended that in the aforesaid case the Apex Court approved the prosecution of a Government servant for an act committed while in service, even after the retirement, meaning thereby, the retired employees can be subjected to the conditions of service like the one as is being made out in the present Notification and such conditions of service, as the Apex Court itself has held, are binding upon the retired Government employees. According to him, the ratio of the Supreme Court's decision clearly supports the view taken by the Ministry of Law & Justice and on other points he relied upon the detailed ....
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....vernment, according to us cannot be accepted. The notice was issued by the Special Bench to the Ministry of Law & Justice and the Ministry has in fact assisted the Bench by filing the affidavit and has also directed the appearance of the Sr. Central Government Counsel to plead its case, we appreciate their concern and assistance in the matter. In our view, the Tribunal is entitled to hear the Ministry of Law & Justice, who has in fact issued the notification. Ultimately the decision has to be of the Bench and we are not guided by the contentions of the Ministry of Law & Justice as made out by their counselor in their affidavit. We would definitely look into all these contentions in the light of law that prevails on the issue. The spirit with which they appeared to assist the Bench is appreciated and the objections put up in this regard by some of the interveners are, therefore, rejected, as untenable. After all it must not be forgotten that the Tribunal in its judicial proceedings are entitled to draw assistance from all persons. It cannot be said that Ministry of Law & Justice becomes stranger after the issuance of notification. 61. In para 21 of the decision of Hon'ble Del....
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....the Ministry. Although we are not aware of any such material with regard to ITAT but that hardly is material/significant. Still the executive/Parliament can take cognizance of public perception of the matter and legislate so as to take the institution out of it. They have questioned how the bias be raised upon persons who have retired long long back, for according to them the new generation of Members may not even know them by person/face. They felt the imagination of the Ministry is too much theoretical and based on hearsay is not on any substance or material. We do not agree with the contention of the interveners that legislation cannot be made on the public perception of bias. The legislation can perhaps be made even to prevent the institution from getting into a cloud. After all it is the duty of the Government to protect the judicial body from being charged with such impressions. But the question that arises now is as to whether the Notification that is before us, can be interpreted which is on the basis of some hearsay, gossips or media hype. Definitely not. The interpretation, in our view, cannot be solely based upon these considerations, but has to be on the solid principle....
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.... cadre and are usually for one year and are renewed from ear to year, although some of them may be created for a certain specified period. The conditions of service of a Government servant appointed to a post, permanent or temporary, are regulated by the terms of the contract of employment, express or implied, any subject thereto, by the rules applicable to the Members of the particular service. 18. The appointment of a Government servant to a permanent post may be substantive or on probation or on an officiating basis. A substantive appointment to a permanent post in public service confers normally on the servant so appointed a substantive right to the post and he becomes entitled to hold a lien on the post. This "lien" is defined in Fundamental Rule, Chapter II, rule 9(13) as the title of a Government servant to hold substantively a permanent post, including a tenure post, to which he has been appointed substantively. The Government cannot terminate his service unless it is entitled to do s. (1) by virtue of a special term of the contract of employment, e.g., by giving the requisite notice provided by the contract or (2) by the rules governing the conditions of his servi....
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....substantive or on probation or on an officiating basis. Here also, in the absence of any special stipulation or any specific service rule, the servant so appointed acquires no right to the post and his service can be terminated at any time except in one case, namely, when the appointment to a temporary post is for a definite period. In such a case the servant so appointed acquire a right to his tenure for that period which cannot be put an end to unless there is a special contract entitling the employer to do so on giving the requisite notice or the person so appointed is, on enquiry held on due notice to the servant and after giving him a reasonable opportunity to defend himself, found guilty of misconduct, negligence, inefficiency or any other disqualification and is by way of punishment dismissed or removed from service or reduced in rank. The substantive appointment to a temporary post, under the rules, used to give the servant so appointed certain benefits regarding pay and leave, but was otherwise on the same footing as appointment to a temporary post on probation or on an officiating basis, that is to say, terminable by notice except where under the rules promulgated in 1949....
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....the contract providing for such termination or under the relevant statutory rules regulating the terms and conditions of temporary Government servants. A temporary Government servant can, however, be dismissed from service by way of punishment. Whenever, the competent authority is satisfied that the work and conduct of a temporary servant is not satisfactory or that his continuance in service is not in public interest on account of his unsuitability, misconduct or inefficiency, it may either terminate his services in accordance with the terms and conditions of the service or the relevant rules or it may decide to take punitive action against the temporary Government servant. If it decides to take punitive action it may hold a formal inquiry by framing charges and giving opportunity to the Government servant in accordance with the provisions of Article 311 of the Constitution. Since, a temporary Government servant is also entitled to the protection of Article 311 (2) in the same manner as a permanent Government servant, very often, the question arises whether an order of termination is in accordance with the contract of service and relevant rules regulating the temporary employment ....
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....39;. The sum and substance of the first set of 5 interveners who have resigned is that they are the one who have not retired from the service of the Tribunal because they resigned before they were confirmed in the post. 67. The Hon'ble Supreme Court in the case of Union of India v. Gopal Chandra Misra [1978] 2 SCC 301, in para 23 of the judgment, has referred the dictionary meaning of the term 'resignation' as under:- "23. 'Resignation', in the Dictionary sense, means the spontaneous relinquishment of ones own right. This is conveyed by the maxim: Resinatio est juris propii spontanea refutatio. In relation to an office, it connotes the act of giving up or relinquishing the office. To 'relinquish an office' means to 'cease to hold' the office, or to 'loose hold of the office'; and to 'loose hold of office' (cf. Shorter Oxford Dictionary); and to "loose hold of office", implies, to 'detach', "unfasten"; "undo or untie the binding knot of ink" which holds one to the office and the obligations and privileges that go with it." 68. The term 'resignation' as understood in the above case is a deliberate act ....
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....pex Court has held that in service jurisprudence, the expressions superannuation, 'voluntary retirement', 'compulsory retirement' and 'resignation' convey different connotations. TheApex Courtheld that in the case of resignation, it can be tendered at any time but in the case of voluntary retirement, it can only be sought for after rendering prescribed period of qualifying service. 71. Now we will advert to the decision of the Supreme Court in the case of Sanwar Mal, wherein the Hon'ble Supreme Court has observed as under:- "9. We find merit in these appeals. The words "resignation" and "retirement" carry different meanings in common parlance. An employee can resign at any point of time, even on the second day of his appointment but in the case of retirement he retires only after attaining the age of superannuation or in the case of voluntary retirement on completion of qualifying service. The effect of resignation and retirement to the extent that there are severance of employment but in service jurisprudence both the expressions are understood differently. Under the Regulations, the expressions "resignation" and "retirement" have been emplo....
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.... nature of an eligibility criteria the scheme disentitles such category of employees out of it." 72. In the light of the aforesaid decisions it is difficult to say that Dr. Rakesh Gupta and other such like interveners have retired from service. They have resigned and terminated their contract of employment with the Government. In other words, they do not hold any post and no question of any conditions of services that can be made applicable to them after once they resigned from their office. The effect of resignation during the probation period is forfeiture of service. The past service rendered by the employee concerned becomes non est as the same got forfeited the moment they have resigned from office, particularly when the employee was not confirmed in service and was still on probation that too on a temporary post. 73. It has already been held by theApex Courtin the case of Purshottam Lal Dhingra, extracted above, that when a person is appointed on probation, even on a permanent post, that servant is to be taken as appointed on training. The Supreme Court again in the case of Kaushal Kishore Shukla has held that the probationer does not have any right to hold the post and....
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....oyees who are in service and not to those persons who lost the right to the post long back much before the same was brought by way of amendment made subsequently. We, therefore, unhesitatingly answer question Nos. 5 & 6 in favour of the interveners. There is nothing in the Rule 13E to debar such persons. 77. Now as regards Shri Y.K. Kapur is concerned, he was relinquished of his post in the ITAT with effect from1-7-2004having joined the service on3-12-2001, after two years of service. The terms of appointment of Shri Y.K. Kapur are almost the same as that of other interveners, who resigned. The post is stated to be purely temporary but likely to be continued. Shri Y.K. Kapur was supposed to be on probation for a period of 2 years, but the said period could be extended at the discretion of the appointing authority. In this case, it was submitted on behalf of Shri Y.K. Kapur that no confirmation order was issued to him. The office record does not show that he was confirmed in service. That means his post did not become permanent. He resigned to the post after 2 years but before the confirmation took place. That means he resigned during probation period. In identical situation the ....
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..... High Court of Madhya Pradesh MANU/SC/0202/1996, although the Rules prescribed that the probationary period should not exceed two years, and an order of confirmation was also necessary, the termination order was issued within the extended period of probation. Hence, the termination was upheld. 17. The other line of cases deals with Rules where there is no maximum period prescribed for probation and either there is a Rule providing for extension of probation or there is a Rule which requires a specific act on the part of the employer (either by issuing an order of confirmation or any similar act) which would result in confirmation of the employee. In these cases unless there is such an order of confirmation, the period of probation would continue and there would be no deemed confirmation at the end of the prescribed probationary period. In this line of cases one can put Sukhbans Singh v. State of Punjab MANU/SC/0356/1962, State of Uttar Pradesh v. Akbar Ali Khan MANU/SC/0231/1966, Shri Kedar Nath Bahl v. State of Punjab MANU/SC/0593/1972, Dhanjibhai Ramjibhai v. State of Gujarat MANU/SC/1385/1997, Municipal Corporation, Raipur v. Ashok Kumar Misra and State of Punjab v. Ba....
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....nimous view but we are only clarifying the position of law as we understand. Here it must be appreciated, the persons have resigned from service when they were only at temporary post and that too during their probation period. So they do not have any right to hold the post as construed by the authorities discussed in earlier paragraphs and on their resignation they have forfeited their service and, therefore, debarring them under any conditions of service, that comes to play much after their retirement, in our opinion, cannot be applied to them. 80. We now take up the cases of other interveners who have retired on superannuation. The provisions of section 129 except for 129(6) and provision of section 252 of the Income-tax Act, 1961, are pari materia. The provisions of Income-tax Act are broadly lifted into the Customs Act. The legislation brought certain amendments to disqualify the President, Vice President and Members of that Tribunal to practice before CESTAT after ceasing to hold such office. The said disqualification is brought into statute by way of an amendment to section 129(6) of the Customs Act, which reads as under: "129(6) - On ceasing to hold office, the P....
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....s it is spelt out by the Notification. We accept the plea made by the Sr. Central Government Counsel that Rule 13E brings about amendments to the conditions of service. The next question that immediately strikes to us is whether it can apply to the Members who are in service now or who are going to join the service from now or who were in service earlier. Before answering that issue, the common intention and purpose in bringing the amendment to section 129(6) of the Customs Act could have been carried out by bringing like amendments in the Income-tax Act either in section 252 or in section 288 of the Income-tax Act, instead of choosing the route of amending the conditions of service. 84. In fact the Legislature in section 288 of the Income-tax Act itself had such provision under section 288(3), which provided as under (prior to its deletion): "(3) Notwithstanding anything contained in this section, if the authorized representative is a person formerly employed as an income-tax authority, not below the rank of Income-tax Officer, and has retired or resigned from such employment after having served for not less than three years in any capacity under this Act or under the Indian....
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....ringing Rule 13E is in the direction of bringing some reformative provisions to free the judiciary from the charges of bias in their judicial functions. The executive if permitted in this manner will only set naught the judicial interpretation rendered by the highest Court of the land and also bypass the higher wisdom of the Parliament. We must be conscious of the fact that limited ban of two years on retired income-tax employees was not approved by the Supreme Court. Now the present Notification under the garb of conditions of service seeks to enforce a life ban of ex-Members will it receive a judicial sanction in the background of R. Kapoor's case. It is difficult to imagine or accept. Now we will be able to appreciate the importance of the means to ends. The purpose of section 288(3) of the Income-tax Act and Rule 11 of the Pension Rules was to achieve a common objective and to ensure the same result. As in our case section 129(6) of Customs Act and Rule 13E of the ITAT Members (Recruitment and Conditions of Service) Rules, 1963. But look how the judiciary appreciated the difference. Punjab & Haryana High Court in the case of Kulwant Singh has held 288(3) amendments are cons....
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....order the effect of which was that all Government servants who would have retired because of the change in the age of retirement after 25-5-1961 and before 20-12-1961 were retained in service up to 31-12-1961 except those who reached the age of 58 years before 31-12-1961 in which case they were to retire at the age of 58 years. Accordingly, Bishun Narain Mishra retired on31-12-1961. It was argued by Shri Bishun Narain Mishra that the rule is retrospective and no retrospective rule can be made to his detriment. The Court did not find any retrospectivity in it. All that the rule provides is that from the date it comes into force the age of retirement would be 55 years. It would, therefore, apply from that date to all Government servants, even though they may have been recruited before25-5-1961in the same way as the rule of 1957 which increased the age from 55 years to 58 years applied to all Government servants even though they were recruited before 1957. Now we will take a hypothetical provision and the situation and the answer becomes clear. Suppose instead of age being reduced to 55, say it was increased to 70 years. Does it mean the executive applies the amendment to those retire....
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....dents and the Members on the date when the Notification was issued. In fact Rule 13F which was brought by the same amendment under the same proviso to Article 309 provides that the same persons would not undertake any arbitration work while functioning in those capacities in the Tribunal. That means, those persons cannot undertake any arbitration work while working in those capacities or undertake to practice before the Tribunal after their retirement from service from the Tribunal. That means, these service conditions, which are brought into the ITAT Members (Recruitment and Conditions of Service) Rules, 1963, admittedly can be applied only to those persons who are presently President, Sr. Vice President, Vice President or the Members of the Tribunal. They are persons who are presently serving and not to those persons who have long back retired. After all, a President who has retired cannot remain to be the President after retirement. In the same manner who retired as Sr. Vice President long back as of now cannot remain to be the Sr. Vice President. In the same manner who retired as Vice President long back cannot remain Vice President for applying these provisions after his retir....