TaxTMI 
TaxTMI 
2019 (11) TMI 1143
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....ory treatment on taxation of leave encashment which is illegal, arbitrary, ultra vires and in gross violation of Art. 12, 13,14, 16, 19, 21 and 265 of our constitution. b) Issue a writ of Mandamus or a Writ of Certiorari and/or any other appropriate Writ, Order or direction in the nature thereof directing the Respondents to treat and declare the Petitioners, the retirees of PSUs as government employees so as to attract the provisions of Section 10(10AA)(i) of IT Act, entitling them to full tax exemption on leave encashment after retirement/ superannuation and not as non-government employees falling under Section 10 (10 AA) (ii) subjecting- them to illegal and discriminatory treatment on taxation of leave encashment which is illegal, arbitrary, ultravires and in gross violation of Art. 12, 13, 14, 16, 19, 21 and 265 of our constitution. Issue a writ of Mandamus or a Writ of Certiorari and/or any other appropriate Writ, Order or direction in the nature thereof directing the Respondents to make suitable amendments and modifications in Section 10 (10 AA) and/ or to issue a notification in this respect so as to quash the current tax assessment and to refund the excess tax received fro....
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....tification in the Official Gazette, specify in this behalf having regard to the limit applicable in this behalf to the employees of that Government]: Provided that where any such payments are received by an employee from more than one employer in the same previous year, the aggregate amount exempt from income-tax under this subclause [shall not exceed the limit so specified]: Provided further that where any such payment or payments was or were received in any one or more earlier previous years also and the whole or any part of the amount of such payment or payments was or were not included in the total income of the assessee of such previous year or years, the amount exempt from income-tax under this sub-clause [shall not exceed the limit so specified], as reduced by the amount or, as the case may be, the aggregate amount not included in the total income of any such previous year or years. Explanation.-For the purposes of sub-clause (ii),- the entitlement to earned leave of an employee shall not exceed thirty days for every year of actual service rendered by him as an employee of the employer from whose service he has retired;" 3. The submission of the petitioners is that th....
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....Central Government and State Government form a distinct class and the classification is reasonable having nexus with the object sought to be achieved. The Central Government and State Government employees enjoy a 'status' and they are governed by different terms and conditions of the employment. Reference here may be made to the decision in Roshan Lal Tandon v Union of India AIR 1967 SC 1889, wherein it was held by the Supreme Court that the legal position of a Government servant is more one of status than of Contract. The relevant extract from the said judgment reads as under: "6. We pass on to consider the next contention of the petitioner that there was a contractual right as regards the condition of service applicable to the petitioner at the time he entered Grade 'D' and the condition of service could not be altered to his disadvantage afterwards by the notification issued by the Railway Board. It was said that the order of the Railway Board dated January 25, 1958, Annexure 'B', laid down that promotion to Grade 'C' from Grade 'D' was to be based on seniority-cum-suitability and this condition of service was contractual and could not be altered therea....
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.... to pay compensation for accidents. The extent to which the law is content to leave matters within the domain of contract to be determined by the exercise of the autonomous authority of the parties themselves, or thinks fit to bring the matter within the sphere of status by authoritatively determining for itself the contents of the relationship, is a matter depending on considerations of public policy. In such contracts as those of service the tendency in modern times is to withdraw the matter more and more from the domain of contract into that of status." (Salmond and Williams on Contracts, 2nd Edn. p. 12)." (Emphasis added) Thus, government employees enjoy protection and privileges under the Constitution and other laws, which are not available to those who are not employees of the Central Government and State Governments. 6. The submission of the counsel for the petitioner is that the employees of the Public Sector Undertaking and Nationalised Banks are also rendering services for the government, and such organisations are covered by Article 12 of the Constitution of India as 'State'. 7. We do not find any merit in this submission either. Merely because Public Sector Undert....
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....al expenditure which may be incurred on account of revision of pay scales. It appears that prior to issuance of the office memorandum dated 12.4.1993 the Government had been providing the necessary funds for the management of public sector enterprises which had been incurring losses. After the change in economic policy introduced in the early nineties, the Government took a decision that the public sector undertakings will have to generate their own resources to meet the additional expenditure incurred on account of increase in wages and that the Government will not provide any funds for the same. Such of the public sector enterprises (government companies) which had become sick and had been referred to BIFR, were obviously running on huge losses and did not have their own resources to meet the financial liability which would have been incurred by revision of pay scales. By the office memorandum dated 19.7.1995 the Government merely reiterated its earlier stand and issued a caution that till a decision was taken to revive the undertakings, no revision in pay scale should be allowed. We, therefore, do not find any infirmity, legal or constitutional in the two office memorandums whic....