The Commissioner of Income Tax - II vs. M/s. Kabsons Gas Equipment Ltd.,

1 IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P.(S) No. 537 of 2013 --------- Shri Shyamal Kanti Sen, son of late Amiya Bhushan Sen, the Chief Commissioner of Income Tax, Central Revenue Building, 5A, Main Road, P.O. & P.S. Chutia, District-Ranchi .... Petitioner Versus 1. Vijay Kumar Singh, son of Shri Ram Ratan Prasad Singh, Deputy Commissioner, Posted as N.A.D.T.(National Academy of Direct Taxes), Nagpur (Maharashtra). 2. The Secretary, Department of Revenue, Ministry of Finance, Govt. of India, North Block, P.O. & P.S. Parliament Street, District- New Delhi. 3. The Chairman, Central Board of Direct Taxes, Ministry of Finance, Govt. of India, North Block, P.O. & P.S. Parliament Street, District- New Delhi. 4. The Secretary, Department of Personnel, Training and Public Grievances, Govt. of India,l North Block, P.O. & P.S. Parliament Street, District- New Delhi. 5. The Under Secretary, Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Govt. of India, North Block, P.O. & P.S. Parliament Street, District- New Delhi.

.... Respondents --------- CORAM: HON'BLE MR. JUSTICE D. N. PATEL HON'BLE MR. JUSTICE RATNAKER BHENGRA --------- For the Petitioner : Mr. Deepak Roshan, Advocate For the Respondents : Mr. Biren Poddar, Sr. Advocate. Mr. Vikas Pandey, Advocate. Mr. Sanjay Kr. Prasad, Advocate. Miss. Amrita Sinha, Advocate. Mr. Mahendra Choudhary, Advocate. --------- 15/

Dated: 21

st May,

2015

Per D.N. Patel, J.: 1. This writ petition has been preferred challenging the order passed by the Central Administrative Tribunal, Patna Bench, Patna(Circuit Bench, Ranchi) in O.A. No. 165 of 2007 (R) vide order dated 15.07.2011 whereby the Tribunal has allowed the Original Application preferred by respondent no. 1, and, directed the respondents to protect the pay of respondent no. 1 with consequential benefits to respondent no.1, except for interest, and it was held that the respondent no. 1 was drawing

2 his last pay on the post of Divisional Security Commissioner in Railway Protection Force at Rs. 10,650/- plus allowances as admissible, so long as the respondent no.1 is probationer, as per, Fundamental Rule 22B(1)(a) and especially proviso attached thereto. Being aggrieved by this order of the Central Administrative Tribunal, the petitioner, who is original respondent in Original Application, has preferred this writ petition. 2. Factual Matrix.  The respondent No.1 (original applicant of O.A. No.165 of 2007R) was successfully qualified in Civil Services Examination, 1997 and he was selected for appointment in the Railway Protection Force Service and, thereafter, joined the services on 21.12.1998, having been appointed on the post of Divisional Security Commissioner in Railway Protection Force under the Government of India, Ministry of Railway, in the pay scale of Rs.10,000-325- 15,200/-. The respondent no.1 was working on substantive post of Divisional Security Commissioner in Railway Protection Force.  The respondent no. 1 again appeared in Civil Services Examination, 2003, and he was selected in the Indian Revenue Service Cadre, and, thereafter, he joined the said service on 27.12.2004 at National Academic of Direct Taxes, Nagpur on Probation.  The service book, leave records and G.P.F amount of

3 respondent no.1, which he was having with Railway Protection Force, were transferred to his new service. Moreover, the Ministry of Finance, Department of Revenue, Government of India has approved the counting of his past services at the Railway Protection Force for pensionary benefits vide letter dated 11.08.2006.  Respondent no. 1 (Original applicant) was drawing his basic pay at Rs. 10,650/- prior to his joining the Indian Revenue Service Cadre and, therefore, he applied for the protection of pay as per Fundamental Rules, especially 22B thereof. This prayer for protection of the pay(Rs.10,650/-) was rejected by this petitioner because as per the petitioner, during the probation period the respondent was entitled to Rs.8000/-, which was minimum of time scale, in the Indian Revenue Service, where the respondent no. 1 joined on the post having pay scale of Rs. 8000-275- 13500/-.  As the petitioner refused to grant presumptive pay to the respondent no.1, the respondent no.1 preferred O.A. No. 165 of 2007,which was allowed by the Central Administrative Tribunal, Patna Bench, Patna(Circuit Bench at Ranchi) vide order dated 15.07.2011 and hence, the original respondent has preferred the present writ petition. 3. Arguments canvassed by the counsel for the petitioner. Learned counsel appearing for the petitioner has submitted:-

4  that

the Central Administrative Tribunal, Patna Bench, Patna, while allowing O.A. No. 165 of 2007(R), has not properly appreciated Rule 22B of the Fundamental Rules.  that

respondent no.1 was initially appointed as Divisional Security Commissioner in the Railway Protection Force on 21.12.1998, and, thereafter, he appeared in a Civil Services Examination, and as he cleared his examination in the year, 2003, he was selected in the Indian Revenue Service cadre, and joined the new services on 27.12.2004. Thus, the respondent no.1 cannot get any benefit of his earlier post, because, after appearing in the examination he has cleared it and he joined the new service. This aspect of the matter has not been properly appreciated by the Central Administrative Tribunal, and hence the impugned order deserves to be quashed and set aside.  that

the earlier post, which was held by respondent no.1 as Divisional Security Commissioner in Railway Protection Force, was having a pay scale of Rs. 10,000-325- 15,200/-, whereas the new post i.e. at Indian Revenue Service Cadre, he has joined on the post having pay scale of Rs. 8000-275-13500/-. Thus, when any employee is joining from a post having a higher pay scale to any post having a lower pay scale, the pay protection cannot be given, because there is no rule for protection of the pay on appointment as a direct recruit through open competitive examination from

5 a post carrying higher pay scale to a post carrying lower pay scale. This aspect of the mater has not been properly appreciated by the Central Administrative Tribunal, and, hence the impugned order deserves to be quashed and set aside. 4. Arguments canvassed by the counsel for the respondent no.1 (original applicant before the Central Administrative Tribunal).  It is submitted by learned counsel for the respondent no.1:-  that

no error has been committed by the Central Administrative Tribunal in allowing O.A. No. 165 of 2007(R) preferred by this respondent no.1, vide order dated 15.07.2011.  that

in the facts of the present case, Fundamental Rule 22B(1)(a) is applicable. As per this Fundamental Rule 22B(1)(a), how to fix the pay of a probationer is discussed, and as the respondent no.1 was getting higher pay of Rs. 10,650/- at Railway Protection Force on the post of Divisional Security Commissioner prior to joining Indian Revenue Service, that pay should be protected during the probation period of respondent no.1.  that

it is a wrong notion in the mind of this petitioner that the respondent no.1 is seeking protection of the pay scale which the respondent no.1 was getting earlier in Railway Protection Force. This is never a prayer of the

6 respondent no.1; neither before Central Administrative Tribunal nor before this Court. What is protected by Fundamental Rule 22B(1)(a), especially reading the proviso thereof, is the pay last drawn by this respondent no.1 at Railway Protection Force, because the said pay was higher to the pay at the minimum of time scale of Indian Revenue Service. This aspect of the matter has been correctly appreciated by the Central Administrative Tribunal, in both its order, one is dated 24.04.2008 as well as in the order dated 15.07.2011. The order dated 24.04.2008 in O.A. No. 165 of 2007 was an initial order passed by the Central Administrative Tribunal which was challenged by the petitioner before this Court in a writ petition, and, the matter was remanded for further clarity to the Central Administrative Tribunal, and therefore, another order was passed by the Central Administrative Tribunal, which is dated 15.07.2011 and consistently in both the orders there is correct interpretation of Rule of 22B(1)(a) of Fundamental Rules, and, hence this writ petition may not be entertained by this Court.  that

similarly situated other persons are referred in para 5 of the order passed by the Central Administrative Tribunal vide its order dated 24.04.2008 in O.A. No. 165 of 2007, whose last pay drawn has been protected, who were probationer. Their names and designations have also been mentioned in para 5 of the aforesaid order and similar

7 treatment has been given to the respondent no. 1 by the Central Administrative Tribunal.  that

the aforesaid aspect of the mater is getting full support by the decision rendered by a Division Bench of the High Court of Delhi in L.P.A. No. 690 of 2001, dated 03.03.2009 as well as the order passed by the Hon'ble High Court of Delhi in C.W. No. 1768 of 1988 dated 05.10.2001. On the basis of the aforesaid two decisions also as well as the order passed by Central Administrative Tribunal in O.A. No. 171 of 1995 by the Bombay Bench, Circuit Bench at Nagpur, vide order dated 06.06.2000, respondent no.1 is entitled to get protection of the pay, which was last drawn by him as Divisional Security Commissioner in Railway Protection Force, during his period of probation in the Income Tax Department, Indian Revenue Service Cadre.  that

in the Indian Revenue Services the pay scale was Rs. 8000-13500/-, whereas in the previous service of the respondent no.1, the pay scale was Rs. 10000-15200/- and in the previous pay scale, the respondent no. 1 had reached up to the basic pay of Rs.10,650/-. This pay is to be protected i.e. basic pay of Rs.10,650/- during the probation period of respondent no.1 i.e. for approximately nine months and not after the confirmation, whereas this petitioner is giving Rs. 8000/- as basic pay to the respondent no.1. Thus the difference in the basic pay will be Rs. 26,050/- per month, and this difference will

8 continue for approximately nine months. This is the period of probation, thus the total financial impact is much lessor and hardly it will be Rs.20000/-. Reasons:- 5. Having heard learned counsel for both the sides and looking to the facts and circumstances of this case, we see no reason to entertain this writ petition mainly for the following facts and reasons. (i) The respondent no.1 is an original applicant before the Central Administrative Tribunal who instituted O.A. NO.165 of 2007(R) before the Central Administrative Tribunal, Patna Bench, Patna (Circuit Bench at Ranchi), for getting protection of the pay which was initially allowed by the Central Administrative Tribunal vide order dated 24.04.2008. Against which, this petitioner preferred writ petition bearing W.P.(S) No. 73 of 2009 before this Hon'ble Court and the matter was remanded and again Central Administrative Tribunal passed an order dated 15.07.2011, and, Original Application was allowed by the Central Administrative Tribunal, and the pay protection was granted to the respondent no.1 during his probation period of few months. Being aggrieved and dissatisfied by the order passed by the Central Administrative Tribunal, Patna Bench, Patna(Circuit Bench at Ranchi) in O.A. No. 165 of 2007(R), the present petition has been preferred by the original respondent. (ii) It further appears from the facts of the case that respondent no.1 had initially appeared in Civil Services Examination in the

9 year, 1997. He cleared this examination and was appointed as Divisional Security Commissioner in the Railway Protection Force, under the Government of India, Ministry of Railway w.e.f. 21.12.1998, in the pay scale of Rs. 10,000-325-15,200/-. This was a substantive post. He continued on this post for a few years,and, he was a confirmed employee on that post. (iii) The respondent no. 1 again appeared in the Civil Services Examination, in the year, 2003. He again cleared the said examination and was selected for Indian Revenue Service (IRS) Respondent no.1 joined the said services w.e.f. 27.12.2004 as a probationer at National Academic Direct Taxes, Nagpur. This new post was having a basic pay scale of Rs.8000-275-13500/-. (iv) The service book and leave records with G.P.F. amount were transferred to new place of service. (v) His previous G.P.F amount was transfered to new G.P.F. account. Moreover, the Ministry of Finance, Department of Revenue, Government of India has also given approval of counting of his past service in the Railway Protection Force, for pensionary benefits in the new service vide letter dated 11.08.2006. (vi) Now the issue had arisen for protection of the last pay drawn by the respondent no.1 at Railway Protection Force as Divisional Security Commissioner during the probation period in the Indian Revenue Services. This last pay drawn was not protected by the petitioner, and, therefore, respondent no.1 preferred O.A. No. 165 of 2007(R) before Central Administrative Tribunal, Patna

10 Bench, Patna(Circuit Bench at Ranchi). (vii) Central Administrative Tribunal vide order dated 24.04.2008 allowed the Original Application and protected the last pay drawn by the respondent no. 1, against which, petitioner preferred writ petition before this Court bearing W.P.(S). No. 73 of 2009, and this Court remanded the matter for further clarity to the Central Administrative Tribunal. Thereafter, Central Administrative Tribunal again passed an order on 15.07.2011 and maintained the same order i.e. allowed Original Application preferred by the respondent no. 1 and has protected the pay last drawn by the respondent no.1 as Divisional Security Commissioner in Railway Protection Force which was at Rs. 10,650/-, during the probation period of the respondent no.1, as per fundamental Rule 22B (1) (a), especially under proviso thereof. (viii) Being aggrieved, and dissatisfied by the aforesaid order of the Central Administrative Tribunal the present writ petition has been preferred by this petitioner. Therefore, the question before this Court is whether, as per fundamental Rule 22B(1)(a), the last pay drawn by the respondent no.1 as Divisional Security Commissioner in Railway Protection Force should be protected for a couple of months i.e the period of probation of the respondent no.1 in the Indian Revenue Service or not and, therefore, there is a need of reference of Fundamental Rule 22B(1)(a) which reads as under:- “Fundamental Rule 22B(1) Notwithstanding anything contained in these Rules, the following provisions shall

11 govern the pay of government servant who is appointed as a probationer in another service or cadre, and subsequently confirmed in that service or cadre. (a) During the period of probation, he shall draw pay at the minimum of the time scale or at the probationary stages of the time scale of the service or post, as the case may be: Provided that if the

presumptive pay of the permanent

post on which he holds a lien not been suspended, should at any time be greater than the pay fixed under this clause, he shall draw the presumptive pay of the permanent post

. (Emphasis Supplied) 6. The definition of presumptive pay has been given to Rule 9(24) which reads as under:- “24. Presumptive pay of a post, when used with reference to any particular Government servant, means the pay to which he would be entitled if he held the post substantively and were performing its duties; but it does not include special pay unless the Government Servant performs or discharge the work or responsibility, in consideration of which the special pay was sanctioned.” (Emphasis Supplied) Upon conjoint reading of Fundamental Rule 22B(1) (a)- proviso with Fundamental Rule 9(24), it appears that the presumptive pay of the respondent no.1,on the permanent post, which he was holding i.e. the post of Divisional Security Commissioner in Railway Protection Force, if it is greater than the pay at a minimum of the time scale of the post at Indian Railway Services, in that eventuality the presumptive pay of a permanent post of the respondent no.1 (Rs. 16,500/-) shall be paid to the respondent no.1, during his period of probation. (ix) Fundamental Rule 22B(1)(a) is applicable, whenever any persons is appointed on probation in another service or cadre.

12 Once the probation period is over and the service is confirmed, this rule i.e. 22B(1)(a) cease to apply. After his confirmation, now, instead of Fundamental Rule 22B(1)(a), Fundamental Rule 22B(1)(b) will be applicable. Thus, in the facts of the present case, we are concerned only with Fundamental Rule 22B(1)(a). Looking closely to the provision of 22B(1)(a). During the period of probation, an employee will get the minimum of time scale of pay i.e. in the facts and circumstances of the present case in the Indian Revenue Services where the pay scale is Rs.8000-275- 13500/-, respondent no.1 is entitled to get Rs. 8000/- as a basic pay what is a normal rule, but, sometimes rules are more known by their exception. Present case is falling within its exceptions, and, therefore, we will have to go close to the proviso attached to the Fundamental Rule 22B(1)(a)(b). Proviso attached to Rule 22B (1)(a) which is an exception to the aforesaid normal rule that a person on probation will be entitled to get minimum of time pay scale. Looking to the proviso, the exception has been carved out to the effect that the presumptive pay of the permanent post on which any employee as a lien and, if that presumptive pay is a higher or greater than the minimum of the time scale pay, then such employee will be entitled to get that presumptive pay. If this language is converted into figures then the respondent no.1 will be entitled to get Rs. 10,650/- basic pay instead of Rs. 8000/-, because he was on a permanent post of Divisional Security Commissioner, in his earlier service of Railway Protection Force and this pay is known as presumptive pay as per Fundamental

13 Rule 9 (24). This presumptive pay is a higher than the minimum of a time scale of pay which is Rs.8000/- in an Indian Revenue Service cadre, because his pay scale is Rs.8000-275-13500/- and thus, Rs.10,650/-, which is a presumptive pay, is higher than Rs.8000-275-13500/- (minimum of time scale pay in the Indian Revenue Service). As per exception carved out in a proviso to 22B(1)(a), the respondent no.1 will be entitled to get that presumptive pay i.e. Rs. 10,650/- as a basic pay, till the respondent no.1 continues to be a probationer. Once respondent no.1 is confirmed, he ceases to be a probationer and, his presumptive pay i.e. Rs. 10,650/-, will not be protected as now, he will fall within the ambit of Fundamental Rules 22(1)(b) and now he will be entitled to get his regular pay scale i.e. Rs. Rs.8000-275-13500/- which is a pay scale in the Indian Revenue Service. (x) The aforesaid aspects of the matter have been properly appreciated by the Central Administrative Tribunal in both its order dated 25.04.2008 as well as order dated 15.07.2011. In fact there is no ambiguity in the applicability of Fundamental Rule 22B nor there is any ambiguity in understanding the aforesaid rule with the proviso 22B(1)(a). The observation made by the Central Administrative Tribunal in its order dated 24.04.2006 in para 5,reads as under: “He further states that the relevant rule applicable to him for the aforesaid purpose is provided under FR 22 B. But, the competent authority willfully failed to follow the prescribed procedure and the rules in force in his case which is arbitrary and against the rule of law. He further states that similarly situated person like in the case of one Shri

14 Shambhoo Nath, who had improved his service from the armed forces. Head quarters to the Indian Customs and Excise service after successfully completing the Civil Services Examination have also been granted the pay protection of the past service in the higher scale on his new place of posting under the provisions of FR 22B (Annexure-A- 4). In another case of an officer from the same Railway Protection Force Service, Shri P. Ramesh, while working as Divisional Security Commissioner in the Railway Protection Force was selected under the Civil Service Examination 2004 for appointment to the IAS cadre which he joined in the year 2005. He had also been granted the pay protection of the past service in the higher scale as per order dated 07.07.2006, issued by the Department of Personal & Training, Govt. of Rajasthan (Annexure-A-5). He further states that this Tribunal in a similar instance in the case of one Y.V. Thalpa Sai had also approved of grant of the higher scale of pay vide judgment and order in O.A. No. 171/95, before the C.A.T., Mumbai Bench, Circuit at Nagpur vide order dated 6.6.2000 (Annexure A-6). He further states that since the competent authority has fixed his basis pay of Rs. 8000-13500/- only vide impugned order dated 16.07.2007, he had approached this Tribunal to ventilate his grievance.” (Emphasis Supplied) Thus there are three types of similarly situated persons whose presumptive pay has been protected because it is higher than the minimum time scale pay for those employee with their names and designations. There is a reference in para 5 of the order passed by the Central Administrative Tribunal and the case of this respondent no.1 is similar to those persons. (xii) It has been held by the Division Bench of Delhi High Court in L.P.A. No. 690 of 2001 vide its order dated 03.03.2009 in paragraph nos., 6,7,8 which reads as under:- “6. Rule 22-B(1) begins with a non-obstante clause and applies to all cases where a Government servant is appointed in another service or cadre as a probationer. Under Rule 22-B(1)(a) during the period of probation such officer is entitled to pay at the minimum of the time scale or the probationary stage of the time scale of the said post to which he is appointed. Proviso to Rule 22-B(1)(a) gives pay protection during the probationary period, if the probationer is holding a permanent post in the first service on which he

15 holds a lien or would have held the lien but for suspension relatable to the second appointment. In such cases, the probationer on appointment in the second service will be entitled to presumptive pay equal to amount being paid to him in his first service. 7. Rule 22-B(1)(b) applies after a probationer is confirmed. Upon confirmation, the Government servant is entitled to same pay as would be payable in accordance with Rule 22 or Rule 22-C whichever is applicable. The question whether after confirmation Rule 22-B or Rule 22 would apply, is answered by the language of Rule 22-B(1)(b) itself as the said clause stipulates that the pay scale of the appellants after confirmation will be fixed in terms of Rule 22 or Rule 22 C. It has not been argued before us that Rule 22-C is applicable. Thus upon confirmation Rule 22 is applicable to the appellants. 8. Fundamental Rule 22(I)(a)(2) quoted above is the relevant sub-Clause which applies as duties and responsibilities of the appellants in the respondent-DDA and CPWD are same. The said sub-clause stipulates that the Government servant after confirmation will be entitled to draw initial pay at the stage of the time scale which the Government servant was enjoying in the first post held by him on regular basis and if there is no such stage, the stage next above the pay in the first post held by him on regular basis. The first proviso stipulates that the employee is entitled to minimum pay scale in the new post, if it is higher than the pay in the first post which was held by him. The first proviso is not applicable in the present case. In view of the above, the appellants on confirmation will be entitled to fixation of pay under Fundamental Rule 22(I)(a)(2) read with other Fundamental Rules, if applicable. The second question is accordingly answered in favour of the appellants and it is held that on completion of the probation period and on confirmation, the appellants will be entitled to fixation of their pay in terms of Fundamental Rule 22(I)(a)(2).” (Emphasis Supplied) (xiii) It has been held by the Central Administrative Tribunal vide its order dated 15.07.2011 in para 7 which reads as under: “Having considered the submission of both sides and on perusal of Annexure R/1 of the respondents as well as Annexure/12 of the supplementary affidavit filed on behalf of the applicant, we are satisfied that through letter no. 2004/SEC(E)/PM-2/2-PT dated 01.07.2015 issued under the signature of joint Director/Section SEC/Ests. The Government of India, Ministry of Railway (Railway Board) the reply of the query made by the Hon'ble High Court of Jharkhand in its Judgment dated 15/9/2010 passed in W.P.S. No. 73/2009 has come on record and according to

16 reply the applicant Shri Vijay Kumar Singh the then Security Commissioner-cum-Principal Divisional Security Commissioner, Zonal Training Center Sales Division Chinkhir, Central Railway was holding the substantive post/confirmed

post

Divisional

Security

Commissioner, Railway Protection Force and he was drawing pay in the scale of Rs. 10,000-325-15200/- w.e.f. 21/12/2003. It was also made clear that Shri Vijay Singh was

holding lien

to the post of Security Commissioner,

Railway Protection Force in the Senior Scale i.e. Rs. 10,000-325-15200/-. Thus from the clarification made by the Government of India Ministry of Railway (Railway Board) Annexure/12 it is clear that the reply of the query made by the Hon'ble High Court has been given in the affirmative and in favour of the applicant so in view of this clarification of Railway Board by way of Annexure/12, we are of the considered view that the applicant is entitled to get the relief with regard to the pay protection as well as consequential relief except claim of interest. We are further of the view that since all the issues have been discussed in the previous judgment and as such we do not feel it necessary to discuss again those points in this judgment. We simply hold that the earlier judgment dated 24/04/2008 in O.A. No. 165/2007(R) of this Tribunal will be part of this order.” 7. Thus, in view of the aforesaid factual aspects of the matter, the respondent no.1 was holding a substantive posts or a confirmed posts as a Divisional Security Commissioner in Railway Protection Force and was holding a lien to the said post. These two facts entitle the respondent no.1, so long as he continued to be the probationer on newly selected post by him i.e. Indian Revenue Service to continue with his presumptive pay on a new posts. 8. The presumptive pay in the facts and circumstances of the present case is Rs. 10,650/-. Thus he continued for a couple of month because the respondent no.1, as submitted by the counsel for both sides, was confirmed on the post of Indian Revenue Service after eight to nine months and, thus the whole

17 matter is only for the protection of the pay for eight to nine months. 9. As a cumulative effect to the facts and circumstances of the case, we see no reason to entertain this writ petition and no error has been committed by the Central Administrative Tribunal in deciding O.A. No. 165 of 2007(R), and we therefore, uphold the decision of the Central Administrative Tribunal. As there is no substance in this writ petition, hence, this writ petition is hereby dismissed with no order as to costs. (D.N. Patel, J.)

(Ratnaker Bhengra, J.) S.Dutta/Amardeep