TaxTMI 
TaxTMI 
1967 (2) TMI 30
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....Central Board of Revenue-respondents Nos.1 to 3. Subsequently, respondents Nos. 4 to 126 were added and those are promotees in the Income-tax Service who will be affected by the result of the petition. In order to improve the income-tax administration, the Government of India, on September 29, 1944, reconstituted and classified the existing Income-tax Services as Class I and II. The re-organisational scheme provided for recruitment of Income-tax Officers, Class I, Grade II service, partly by promotion and partly by direct recruitment. The re-organisational scheme was set out in Government of India, Finance Department (Central Revenues) letter dated September 29, 1944 (exhibit B). It created two classes of Income-tax Service, Class I with Grade I and Grade II and Class II Service with Grade III. Recruitment to Class I, Grade II Service, was to be made : (a) by direct recruitment through a competitive examination, and (b) by promotion from Class II, Grade III, the ratio prescribed in paragraph 2(d) of the letter being 80 per cent. by direct recruitment and 20 per cent. by promotion from Class II, Grade III Service, and in case sufficient number of suitable candidates was not avila....
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.... (iii) Officers promoted in accordance with the recommendation of the Departmental Promotion Committee before the next meeting of the Departmental Promotion Committee shall be senior to all direct recruits appointed on the results of the examinations held by the Union Public Service Commission during the calendar year in which the Departmental Promotion Committee met and the three previous years. (iv) Notwithstanding anything contained in clause (iii), a Class II, Income-tax Officer subsequently appointed to Class I on the results of a Competitive Examination conducted by the Federal Public Service Commission shall, if he has passed the Departmental Examination held before his appointment to Class I Service, be deemed to be a promotee for the purpose of seniority." Clause (iv) of the 1952 Rule is almost a reproduction of the proviso to clause (iii) of the rule framed in 1950 and clause (iii) has been recast in somewhat different language, though in substance it contains what the main body of clause (iii) of the Rule of 1950 stated. The effect of clause (iii) of the 1952 Rule is that the promotee becomes senior to the direct recruit who has completed a probationary period of ....
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....lass II before he is qualified for being considered for promotion to Class I, Grade II Service.Clause (iv) of rule 1(f) deals with a special situation in which an officer initially appointed to Class II Service is given senority in the same manner as a departmental promotee if subsequent to his passing the departmental examination in Class II he is appointed to Class I on the results of the combined competitive examination held by the Union Public Service Commission. On October 18, 1951, the recruitment quotas of 80 per cent. and 2per cent. under the reorganisation scheme dated September 29, 1944, were revised. Under the revised recruitment quota rule 66-2/3 per cent. of the vacancies in Grade II, Class I, would be filled by direct recruitment and the remaining 33-1/3 per cent. by promotion from Grade III, Class II Service. Any surplus vacancies which could not be filled by promotion for want of suitable candidates were to be added to the quota of vacancies to be filled by direct recruitment. Rule 4 of the Rules of Promotions at page 251 of the Central Board of Revenue Office Procedure Manual has also been the subject-matter of controversy in this appeal and is set out below ....
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....the impugned rule was based upon an unjustifiable classification between direct recruits and promotees after they had entered into Class I, Grade II Service, and on the basis of that classification promotees are given seniority with weightage over direct recruits of the same year and three previous years. It was contended that there was a discrimination between officers of Class I, Grade II Service, after their recruitment and the actual working of the rule kept on pushing down the direct recruits and postponing their chances of promotion to higher posts in Class I Service. It was submitted that all officers appointed to Class I, Grade II Service formed one class and after the officers have been once recruited there could be no distinction between direct recruits and promotees. In other words, it was contended that the promotees and direct recruits became one class immediately on entry and thereafter there cannot be any class within that class. We are unable to accept the contention of the appellant as correct. In our opinion, it is not right to approach this problem as if it is a case of classification of one service into two classes for the purpose of promotion and as the promoti....
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....Service and on a consideration of this aspect of the matter the promotee is given seniority over a direct recruit completing the period of probation in the same year. The relevant law on the subject is well-settled. Under article 16 of the Constitution, there shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State or to promotion from one office to a higher office thereunder. Article 16 of the Constitution is only an incident of the application of the concept of equality enshrined in article 14 thereof. It gives effect to the doctrine of equality in the matter of appointment and promotion. It follows that there can be a reasonable classification of the employees for the purpose of appointment or promotion. The concept of equality in the matter of promotion can be predicated only when the promotees are drawn from the same source. If the preferential treatment of one source in relation to the other is based on the differences between the said two sources, and the said differences have a reasonable relation to the nature of the office or offices to which recruitment is made, the said recruitment can legitimate....
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....of one year's service in Class I, Grade II, the other four years being counted in Class II, Grade III. It was, therefore, submitted that the rule operated against the direct recruit in a discriminatory manner. In our opinion, there is no substance in the contention of the appellant. Once it is held that the rule of seniority enacted in rule 1(f)(iii) is legally valid, the rule of promotion, i.e., rule 4 of Chapter IX of the Central Board of Revenue Office Procedure Manual cannot be held to lead to any discrimination as between direct recruits and promotees. Rule 4 states that the prescribed minimum service for Class I, Grade II Officer, in the matter of promotion to Grade I of that service is five years gazetted service including one year in Class I, Grade II. For a promotee, therefore, the minimum period of service for promotion to Class I, Grade I, is actually 4 years' service in Class II, Grade III, and one year service in Class I, Grade II. The object of the rule is really to carry out the policy of rule 1 (f)(iii) of the Rules of Seniority and not allow it to be defeated by the requirement of five years' service in Class I, Grade II, itself before consideration for promotion t....
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.... that they had been appointed to Class II, Grade III Service, in 1947 and completed 5 years' service in that class by the year 1952 and if the Departmental Promotion Committee met in 1953, as it actually did meet, and if it recommended their promotion to Class I, Grade II, each one of them would have become senior to the appellant by the operation of clause (iii) to rule 1(f). There was also the further consideration that if rule 1 (f)(iv) did not exist there was no incentive to a promotee of this type to sit for the competitive examination. It should also be taken into account that if the service of the promotees in Class II, Grade III, is entirely ignored and if they join the Class I, Grade II Service, as direct recruits, they might well find themselves becoming junior to those who were left behind in Class II, Grade III Service, by the operation of rule 1(f)(iii). We are accordingly of the opinion that rule 1 (f)(iv) is based on a reasonable classification and does not offend the guarantee under article 14 or article 16(1) of the Constitution. We proceed to consider the next question arising for consideration in this appeal, viz., the allegation of the appellant that there wa....
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....vacancies in Class I, Grade II, will be filled by direct recruitments and the remaining 33-1/3 per cent. vacancies on the basis of promotion and any surplus vacancies which cannot be filled for want of suitable candidates will be added to the quota of vacancies to be filled by direct recruitment. There has been no argument, in this case, with regard to the operation of the rule between the years 1945 and 1950, though in the petition the appellant has alleged that in those years also there were excessive recruitments of promotees. It appears from the affidavit of respondent No. 1 that these were formative years of the income-tax service and reorganisation of the department was being completed and the initial period of reorganisation lasted uptil 1950. The argument was confined to the years 1951 to 1956. According to the appellant, there was excessive recruitment of 71 promotees more than the figure permitted by the quota rule. In the judgment under appeal the High Court has examined the matter and found that the excess number of promotees was 31 for the four years 1951 to 1954. During the hearing of the appeal we had ordered the Secretary of the Finance Ministry to furnish the numbe....
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....rule and there is a statutory duty cast on the Government under this rule to determine the method or methods to be employed for the purpose of filling the vacancies and the number of candidates to be recruited by each method. In the letter of the Government of India dated October 18, 1951, there is no specific reference to rule 4, but the quota fixed in their letter must be deemed to have been fixed by the Government of India in exercise of the statutory power given under rule 4. Having fixed the quota in that letter under rule 4, it is not now open to the Government of India to say that it is not incumbent upon it to follow the quota for each year and it is open to it to alter the quota on account of the particular situation (see paragraph 24 of the counter-affidavit of respondents Nos. 1 to 3 in Writ Petition No. 5 of 1966). We are of opinion that having fixed the quota in exercise of their power under rule 4 between the two sources of recruitment, there is no discretion left with the Government of India to alter that quota according to the exigencies of the situation or to deviate from the quota, in any particular year, at its own will and pleasure. As we have already indicated,....