# Jai Prakash Chand & Ors v. State of U.P. & Anr

- **Citation:** (2025) 2 ILRA 648
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-02-04
- **Case number:** Writ - A No. 3770 of 2023
- **Bench:** Attau Rahman Masoodi, Subhash Vidyarthi
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/jai-prakash-chand-ors-v-state-of-u-p-anr-53018
- **Pages:** 15

## Headnote

Law
-
Government
Employment - Merger - Seniority and
Promotion - Challenge to the validity of
the Employees of Entertainment Tax
Department (Service Cadres of Officers,
Inspectors, and Other Employees) in the
related
Cadres
of
Commercial
Tax
Department - Uttar Pradesh Government
Servant (Discipline and Appeal) Rules,
1999 - Rule 7 - The U.P. Government
Servant Seniority Rules, 1991 - Clause
4(h) - 'substantive appointment' - Uttar
Pradesh Goods and Services Tax Act, 2017
- Section 174 , Uttar Pradesh Merger
Rules, 2022 - Rule 2, Rule 3(3), Rule 3(4),
Rule 4(4), Rule 4(5), Rule 4(7), The
Constitution of India - Article 311 -
Change in chances of promotion does not
violate Article 14 of the Constitution -
Judicial review of government policy
decisions
is
limited
and
should
not
interfere unless the policy is arbitrary,
irrational, or unconstitutional - Merger of
employees into a new department is a
policy decision of the government and
cannot be challenged unless it violates
statutory or constitutional provisions -
Seniority and promotion are subject to the
new rules of the merged department.
(Para - 47 to 56)
Petitioners
were
originally
appointed
as
Entertainment Tax Inspectors - later promoted
to higher positions - U.P. Goods and Services
Tax Act repealed the U.P. Entertainment and
Betting
Tax
Act
-

Entertainment
Tax
Department was abolished - State Government
2 All. Jai Prakash Chand & Ors. Vs. State of U.P. & Anr.
649
merged
employees
into
Commercial
Tax
Department through a policy decision -
petitioners were placed at the bottom of
seniority list in their respective cadres of
Commercial Tax Department under Merger
Rules - challenged placement - ground -
arbitrary, violated Articles 14 and 16 of
Constitution - affected their promotional
prospects - State Government contended -
only
employees
of
Entertainment
Tax
Department merged into Commercial Tax
Dept. and not posts of Entertainment Tax
Dept. - seniority had to be determined under
new
cadre
rules
of
Commercial
Tax
Department.(Para - 33 to 48)

HELD: - Merger Rules, 2022, are upheld as
valid and do not violate Articles 14, 16, and 21
of the Constitution. Placement of the petitioners
in the Merger Rules, 2022 is a part of policy
decision and the petitioners have no locus to
question the policy decision taken by the State
Government.
Substantive
appointment
and
promotions of petitioners shall be considered
from 21.07.2022 instead of 24.04.2018. (Para -
45,48,49,56)

Petition dismissed. (E-7)

List of Cases cited:

## Text

_Characters 0–39,937 of 46,516. This is a partial read: ask again with offset=39937 for what follows._

648 INDIAN LAW REPORTS ALLAHABAD SERIES
documents as per law and issue fresh
documents consistent with his changed name.
Learned Single Judge has also issued a
direction to the Secretary, Ministry of Home,
Government of India and the Chief Secretary,
Government of U.P., Lucknow to create
appropriate
legal
and
administrative
framework to ensure that both Governments
work in concert to achieve the end of making
identity related identity documents removing
anomalies therein. In fact, these are policy
matters exclusively in legislative/ executive
domain.

32. In view of specific administrative
order, the jurisdiction to read down or hold
any regulation as arbitrary, unconstitutional
and/ or violative of fundamental right
guaranteed by the Constitution only vests
with the Division Bench in appropriate
cases.

33. Even otherwise, as observed
hereinbefore on factual matrix of the
matter, the writ petitioner had no case on
merits.

34. For all the aforesaid reasons,
we are satisfied that the judgment of the
learned single judge cannot be sustained.

35. The special appeal stands allowed.
The judgment and order dated 25.05.2023
of the learned Single Judge passed in WritC No. 3671 of 2022 (Md Sameer Rao Vs.
State of U.P. and 2 others) is set aside. The
writ petition stands dismissed.
----------
(2025) 2 ILRA 648
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 04.02.2025

BEFORE

THE HON'BLE ATTAU RAHMAN MASOODI, J.
THE HON'BLE SUBHASH VIDYARTHI, J.

Writ - A No. 3770 of 2023
connected with
Writ - A No. 3769 of 2023

Jai Prakash Chand & Ors. ...Petitioners
Versus
State of U.P. & Anr. ...Respondents

Counsel for the Petitioners:
Apoorva Tewari, Aditya Tewari

Counsel for the Respondents:
C.S.C.

(A)
Service
Law
-
Government
Employment - Merger - Seniority and
Promotion - Challenge to the validity of
the Employees of Entertainment Tax
Department (Service Cadres of Officers,
Inspectors, and Other Employees) in the
related
Cadres
of
Commercial
Tax
Department - Uttar Pradesh Government
Servant (Discipline and Appeal) Rules,
1999 - Rule 7 - The U.P. Government
Servant Seniority Rules, 1991 - Clause
4(h) - 'substantive appointment' - Uttar
Pradesh Goods and Services Tax Act, 2017
- Section 174 , Uttar Pradesh Merger
Rules, 2022 - Rule 2, Rule 3(3), Rule 3(4),
Rule 4(4), Rule 4(5), Rule 4(7), The
Constitution of India - Article 311 -
Change in chances of promotion does not
violate Article 14 of the Constitution -
Judicial review of government policy
decisions
is
limited
and
should
not
interfere unless the policy is arbitrary,
irrational, or unconstitutional - Merger of
employees into a new department is a
policy decision of the government and
cannot be challenged unless it violates
statutory or constitutional provisions -
Seniority and promotion are subject to the
new rules of the merged department.
(Para - 47 to 56)
Petitioners
were
originally
appointed
as
Entertainment Tax Inspectors - later promoted
to higher positions - U.P. Goods and Services
Tax Act repealed the U.P. Entertainment and
Betting
Tax
Act
-

Entertainment
Tax
Department was abolished - State Government
2 All. Jai Prakash Chand & Ors. Vs. State of U.P. & Anr.
649
merged
employees
into
Commercial
Tax
Department through a policy decision -
petitioners were placed at the bottom of
seniority list in their respective cadres of
Commercial Tax Department under Merger
Rules - challenged placement - ground -
arbitrary, violated Articles 14 and 16 of
Constitution - affected their promotional
prospects - State Government contended -
only
employees
of
Entertainment
Tax
Department merged into Commercial Tax
Dept. and not posts of Entertainment Tax
Dept. - seniority had to be determined under
new
cadre
rules
of
Commercial
Tax
Department.(Para - 33 to 48)

HELD: - Merger Rules, 2022, are upheld as
valid and do not violate Articles 14, 16, and 21
of the Constitution. Placement of the petitioners
in the Merger Rules, 2022 is a part of policy
decision and the petitioners have no locus to
question the policy decision taken by the State
Government.
Substantive
appointment
and
promotions of petitioners shall be considered
from 21.07.2022 instead of 24.04.2018. (Para -
45,48,49,56)

Petition dismissed. (E-7)

List of Cases cited:

1. B. Manmad Reddy & ors. Vs Chandra Prakash
Reddy & ors., (2010) 3 SCC 314

2. S. Sivaguru Vs St. of Tamil Nadu & ors. &
other connected appeals, (2013) 7 SCC 335

3. A.Satyanarayana & ors. Vs S. Purushottam &
ors., (2008) 5 SCC 416

4. Bihar St. Electricity Board & ors. Vs
Dharamdeo Das, 2024 (2) SLJ 498

5. St. of U.P. & ors. Vs Ashok Kumar Srivastava
& anr.,(2014) 14 SCC 720

6. Indian Airlines Officers' Assn.Vs Indian
Airlines Ltd. & ors. & other connected appeals,
(2007) 10 SCC 684

7. The St. of Mysore & ors. Vs G. N. Purohit &
ors., MANU/SC/0459/1967

8. Ramchandra Shankar Vs St. of Maha. & ors.,
(1974) 1 SCC 317

9. Air Commodore Naveen Jain Vs U.O.I. & ors.
, 2019 (10) SCC 34

10. St. of U.P. & ors. Vs Principal, Abhay
Nandan Inter College & ors., (2021) 15 SCC 600

11. Fertilizer Corporation Kamgar Union (Regd.),
Sindri & ors. Vs U.O.I. & Ors., (1981) 1 SCC 568

12. Directorate of Film Festivals & ors. Vs
Gaurav Ashwin Jain & ors., (2007) 4 SCC 737

13. Indian Railway Catering & Tourism Corp.
Ltd. Vs Indian Railway Major & Minor Caterers
Association & ors., (2011) 12 SCC 792

14. Jacob Puliyel Vs U.O.I. & ors., 2022 SCC
OnLine SC 533

(Delivered by Hon'ble Attau Rahman
Masoodi, J.)

(1) Heard Sri Apoorva Tewari, learned
Counsel for the petitioners and Sri Akash
Sinha, learned Standing Counsel appearing
for the State-respondents in both the writ
petitions.

(2) In the aforesaid two writ petitions,
the petitioners have prayed for declaring
the Employee of Entertainment Tax
Department (Service Cadres of Officers,
Inspectors and Other Employees) in the
related cadres of Commercial Tax
Department,
Uttar
Pradesh
Merger
Rules, 2022 [in short, referred to as 'Rules,
2022'] ultra vires to Articles 14, 16 and 21
of the Constitution of India. Besides this,
the petitioners of Writ-A No. 3770 of 2023
working on the post of Entertainment Tax
Officer have claimed promotion on the post
of Assistant Commissioner, whereas the
petitioners of Writ-A No. 3769 of 2023
working
on
the
post
of
Assistant
Commissioner have claimed promotion on
650 INDIAN LAW REPORTS ALLAHABAD SERIES
the
post
of
Deputy
Commissioner.
Therefore, they are being taken up together
and decided by a common order.

(3) The grievance raised in the
aforesaid two writ petitions is that on
enforcement of The U.P. Goods & Services
Tax Act, 2017, the service benefits which
had accrued to the petitioners in the
Entertainment and Betting Tax Department
are liable to be granted in G.S.T.
department on merger and they be
promoted on the next higher post as and
when the promotion falls due in the G.S.T.
department.

(4) The facts briefly stated are as
follows:-

(5) All the petitioners were previously
governed under U.P. Entertainment and
Betting Tax Act, 1979 [briefly, it is stated
as 'Entertainment Tax Act'] and they
joined their services in the said Department
during the period 1996-1997 and until
2017, they were promoted to the next
higher level posts.

(6) On 01.07.2017, The U.P. Goods &
Services Tax Act, 2017 [briefly, referred to
as 'GST Act'] was promulgated and came
into force with immediate effect. By virtue
of the provisions of Section 174 of the GST
Act, the Entertainment Tax Act was
repealed alongwith some other Acts,
therefore, the need for re-organization and
merger
of
the
officers/employees
of
Entertainment
Tax
Department
on
compatible posts in G.S.T. department
arose.

(7) Taking a considerate view to
protect the services of the employees of the
Entertainment and Betting Tax Department,
the State Government took a policy
decision to merge the employees of the
Entertainment and Betting Tax Department
against the posts of Equivalent Pay Matrix
available
in
the
Commercial
Tax
Department.

(8) After much deliberations, the State
Government,
acting
upon
the
recommendations dated 23.05.2017 of the
Committee headed by the Additional
Commissioner, Entertainment and Betting
Tax Department, issued a notification dated
24.04.2018 whereby the employees of the
Entertainment and Betting Tax Department
were merged into the available equivalent
posts in the Commercial Tax Department
and while abolishing the said department,
all
the
rights
and
duties
of
the
Entertainment
and
Betting
Tax
Commissioner
were
vested
in
the
Commissioner, Commercial Tax.

(9)
Thereafter,
on
12.07.2018,
31.12.2018, 18.12.2019, 22.10.2019 and
22.09.2020, the State Government directed
that until amalgamation of Service Rules
are made in respect of all the employees,
promotions against the existing vacancies
in the Entertainment Tax Department shall
be made from amongst the Officers of
Entertainment Tax Department in terms of
the
existing
Service
Rules
of
the
Entertainment and Betting Tax Department.

(10)
The
State
Government
in
purported exercise of the power under the
Proviso to Article 309 of the Constitution
of
India
has
thereafter
framed
the
"Employee
of
Entertainment
Tax
Department (Service Cadres of Officers,
Inspectors and Other Employees) in the
related
cadres
of
Commercial
Tax
Department, Uttar Pradesh Merger Rules,
2022" which were made effective from
21.07.2022.
2 All. Jai Prakash Chand & Ors. Vs. State of U.P. & Anr.
651

(11)
Learned
counsel
for
the
petitioners has submitted that the impugned
Rules, 2022 are unjust, arbitrary and
unconstitutional as much as they create a
sub-classification without any reasonable
nexus by identifying the employees of
erstwhile Entertainment Tax Department
on the basis of their origin, i.e., birthmark.
Rule 1(3) of the impugned Rules, 2022
restricts its applicability only to the
employees of the erstwhile Entertainment
Tax Department. Such identification on the
basis of birthmark of employees is
completely unjust and impermissible as
held by the Apex Court in the cases of B.
Manmad Reddy and others v. Chandra
Prakash Reddy and others [(2010) 3
SCC 314] and S. Sivaguru v. State of
Tamil
Nadu
and
others
&
other
connected appeals [(2013) 7 SCC 335].

(12) It is further submitted that Rule
3(3) of the impugned Rules, 2022 provides
a new definition of the 'Substantive
Appointment Date' for the employees of
the
erstwhile
Entertainment
Tax
Department and it states that 'Substantive
Appointment Date' means the date of
appointment
on
the
post
held
on
notification dated 24.04.2018.

(13) The aforesaid definition runs
contrary to the definition of the substantive
appointment as per the U.P. Government
Servant Seniority Rules, 1991. Clause 4(h)
of the U.P. Government Servant Seniority
Rules,
1991
defines
'substantive
appointment' as an appointment, not being
an ad hoc appointment, on a post in the
cadre of Service made after selection in
accordance with the Service Rules relating
to that service. It is submitted that while
formulating the impugned Rules, 2022 the
petitioners who have put in more than 2025 years of service in the Entertainment
Tax Department are being treated to be
directly appointed in the Commercial Tax
Department as on 24.04.2018.

(14) It is submitted that the
decision of not counting the past service
rendered by the petitioners in their original
cadre has no reasonable nexus to the object
sought to be achieved by the impugned
Rules, 2022, and therefore, the Merger
Rules
are
completely
arbitrary
and
unconstitutional.

(15) It is also submitted that while
drawing equivalence between the posts of
District Entertainment Tax Officer in the
Entertainment
Tax
Department
and
Commercial Tax Officer in the Commercial
Tax Department, the respondents have
erred
in
not
considering
the
basic
difference in the structure of both the
cadres. In the Commercial Tax Department,
Commercial Tax Officer is the entry level
post whereas in the Entertainment Tax
Department, Inspector is the entry level
post. An Inspector is eligible to be
promoted
to
the
post
of
District
Entertainment Tax Officer after completion
of 7 years of qualifying service, whereas a
Commercial Tax Officer is eligible to be
promoted
to
the
post
of
Assistant
Commissioner on completion of 7 years of
qualifying service. Hence the equivalence
drawn between the two posts is completely
misplaced and arbitrary. The following
table
clarifies
the
criteria
for
promotion/selection and qualifying service
for promotion in both the departments:-

S
l.
N
o.
Stru
cture
Criteria
for
promotion/
selection

Qualifying
service
for
promotion

Enterta
inment
Com
merEntert
ainCom
mer-
652 INDIAN LAW REPORTS ALLAHABAD SERIES
Tax
Depart
ment

cial
Tax
Dep
artment

ment
Tax
Depar
tment

cial
Tax
Dep
artment

1.

Ente
rtain
ment
Tax
Insp
ector

75%
Direct
recruit
ment
25%
Promot
ion
from
Clerica
l Cadre

No
Insp
ector
Care

75%
Direc
t
recrui
tment
25% -
5
years

No
Insp
ector
Cadr
e

2

Ente
rtain
ment
Tax
Offi
cer/
Com
mercial
Tax
Offi
cer

100%
Promot
ion
from
Inspect
or

50%
Dire
ct
recr
uitment
50%
Pro
mo-
tion
from
Cleri
cal
Cadr
e

7
years

50%
Dire
ct
recr
uit-
ment
50%
-
5
year
s

3

Assi
stant
Com
missio
ner

100%
Promot
ion
from
Officer

50%
Dire
ct
recr
uitment
50%
Pro
mo-
tion
from
Cleri
3
years

Dire
ct
recr
uit-
ment
50%
-
7
year
s

cal
Cadr
e

4

Dep
uty
Com
mi-
ssio
ner

100%
Promot
ion
from
Assista
nt
Comm
issioner

100
%
Pro
motion
from
Assi
stant
Com
missio
ner

2
years

7
year
s

5

Joint
Com
mi-
ssio
ner

100%
Promot
ion
from
Deputy
Comm
issioner

100
%
Pro
motion
from
Dep
uty
Com
missio
ner

2
years

5
year
s

(16) Further submission of the learned
counsel for the petitioners is that if the
Merger Rules, 2022 are allowed to prevail
then almost all of the petitioners will attain
the age of superannuation even before they
will be able to attain the qualifying service to
become eligible for even consideration for
promotion, whereas as per their erstwhile
Service Rules, 1992, which for all practical
purposes remain in existence, all of them are
eligible to be considered for promotion.

(17) All the Assistant Commissioners
in
the
erstwhile
Entertainment
Tax
2 All. Jai Prakash Chand & Ors. Vs. State of U.P. & Anr.
653
Department
became
qualified
to
be
considered for promotion as per their own
Rules,
1992
between
01.07.2021
to
01.07.2023, whereas if the impugned
Rules, 2022 prevail then all of the
petitioners
and
other
Assistant
Commissioners
in
the
erstwhile
Entertainment Tax Department will attain
the age of superannuation before they can
even complete their qualifying service of 7
years which is prescribed in the relevant
Service
Rules
of
Commercial
Tax
Department. The condition of all the
Entertainment Tax Officers in Writ-A No.
3770
of
2023
in
the
erstwhile
Entertainment Ax Department is almost the
same.

(18) It is further submitted that the
State Government had sought an expert
opinion from the Indian Institute of
Management regarding cadre restructuring
of the Commercial Tax Department.
However, it proceeded to notify the
impugned Rules, 2022 without considering
the opinion of the Indian Institute of
Management, Lucknow.

(19) His further submission is that
Rule 4(3)(2) of the impugned Rules, 2022
place the petitioners as junior-most in their
year of recruitment which denies the
petitioners
any
fair
and
reasonable
consideration for promotion to the next
higher post in perpetuity, which means that
in every selection year, the merged
employees of the Entertainment Tax
Department shall be treated to be juniors to
the employees of the Commercial Tax
Department appointed in the same selection
year. The placement of the employees of
erstwhile Entertainment Tax Department at
the bottom is completely in violation of
Articles 14 and 16 of the Constitution of
India.
(20) Further submission of the
learned counsel for the petitioners is that
Rule 5 of the Rules, 1991 provides that a
Government Servant is entitled to count his
seniority with effect from his initial
appointment and a Government Servant
appointed as a result of subsequent
selection shall be junior to the persons
appointed on the result of previous
selection. However, the provisions of Rule
4 (3) (2) of the impugned Rules provide
that employees of the Entertainment Tax
Department shall necessarily be junior to
the
employees
of
Commercial
Tax
Department appointed in the same selection
year irrespective of the date of their
appointment.

(21) It is also submitted that
Hon'ble Supreme Court of India has time
and again held in its various judgments that
although a mere chance of promotion is not
a fundamental right but a right to be
considered for promotion is a fundamental
right. Any policy whereby all the avenues
for promotion in respect of a category of
employees for all times to come are
nullified, and it would be hit by Article 16
of the Constitution of India. Reliance has
been placed on the decision of the Apex
Court in A. Satyanarayana and others v. S.
Purushottam and others [(2008) 5 SCC
416].

(22) In paragraph - 16 of the counter
affidavit, the respondents have asserted that
only the employees of the Entertainment
Tax Department have been merged into the
Commercial Tax Department and not the
posts of the Entertainment Tax Department.
In
reply
thereto,
the
petitioners
in
paragraph - 11 of their rejoinder affidavit
have asserted that it is evident from the
minutes of the meeting dated 05.05.2017
that the merger of employees of the
654 INDIAN LAW REPORTS ALLAHABAD SERIES
Entertainment Tax Department was made
along with the posts that they were holding
and no separate posts were created in the
Commercial
Tax
Department.
The
respondents have thereafter filed another
short counter affidavit in response to the
rejoinder affidavit of the petitioners.
However, the respondents have not refuted
the contents of paragraph 11 of the
rejoinder affidavit of the petitioners. It is a
settled proposition of law that in the
absence of a specific denial to a pleading, it
is considered as admitted.

(23)
Learned
counsel
for
the
petitioners
has
submitted
that
such
classification is completely baseless and it
achieves no purpose except for prejudicing
the interest of employees of the erstwhile
Entertainment Tax Department with respect
to their promotion. Further, the impugned
Rules, 2022 are unconstitutional as they
provide for principles for determination of
seniority of employees of the Entertainment
Tax Department in contra distinction to the
general principles as applicable to all
government servants in the State of U.P. as
per the U.P. Government Servant Seniority
Rules, 1991.

(24) On the other hand, learned
counsel for the respondents have submitted
that after enforcement of The Goods &
Services Tax Act, 2017 on 01.07.2017, the
State
Government issued Government
Order dated 24.04.2018 whereby the
Entertainment and Betting Tax Department
was abolished and all rights and duties of
the Department were vested into the
Commissioner, Commercial Tax.

(25) Learned Standing Counsel has
further submitted that in pursuance of the
Government Order dated 24.04.2018, a
Committee was constituted under the
Chairmanship of Special Secretary, U.P.
Government in which the Officers of
Personnel Department, Finance, Law and
Justice were nominated as Members to
discuss the various issues related with the
employees of erstwhile Entertainment and
Betting Tax Department. In the said
Committee, the representatives of the
Officers of erstwhile Entertainment and
Betting Tax Department and Commercial
Tax Department were also nominated. The
Committee after due consultation and
consideration of the representations given
by the Office Bearers of both the
departments
submitted
its
report
on
19.07.2019.
Pursuant
to
the
recommendations of the Committee dated
19.07.2019, the petitioners were given
posting in the Commercial Tax Department
vide Order dated 02.07.2019. Later on, the
U.P. Public Services Commission ratified
the draft Merger Rules on 26.04.2022 and
vide Notification dated 21.07.2022, the
Merger Rules were notified with immediate
effect.

(26)
While
elaborating
his
submissions, the learned Standing Counsel
has drawn our attention towards the Merger
Rules and has submitted that Rule 2 of the
Merger Rules, 2022 specifically deals with
the overriding effect. Rule 3(2) clearly lays
down that the Service Rules governing the
merging employees means service rules
governing the post of related service cadre
of Commercial Tax Department. Rule 3(3)
defines
the
date
of
'Substantive
Appointment' as the date of appointment
to the post held on the date of Notification
dated 24.04.2018.

(27) Rule 3 (4) of the Merger Rules,
2022 defines the 'cadre' which means the
group of posts available in the related
service
cadre
of
Commercial
Tax
2 All. Jai Prakash Chand & Ors. Vs. State of U.P. & Anr.
655
Department
and
Entertainment
Tax
Department at the time of commencement
of these Rules, but for the Inspector Cadre
means the group of posts merged in the
Commercial Tax Department as dead cadre
by Notification dated 09 March, 2019.

(28) The learned Standing Counsel
has next submitted that since the employees
of the Entertainment and Betting Tax
Department were born in the equivalent
cadre of the Commercial Tax Department
for the first time by merger notification
dated 24.04.2018 and the law on this aspect
has crystallized that seniority can only be
given from the date when an employee is
born into the cadre. This position has been
crystallized by Hon'ble the Apex Court in
the cases of Bihar State Electricity Board
and others v. Dharamdeo Das [2024 (2)
SLJ 498] and State of Uttar Pradesh and
others v. Ashok Kumar Srivastava and
another [(2014) 14 SCC 720]. Thus the
submission of the learned counsel for the
respondents
is
that
looking
at
the
administrative exigency and the aim of
protecting the services of the petitioners,
the date of merger notification was taken as
'Substantive Appointment Date'.

(29) Further submission of learned
Standing Counsel is that Rule 4(4) clearly
states that after commencement of the
Merger Rules, 2022, promotion and other
service matters of related post shall be
decided under the concerning Rules of
service cadre of the Commercial Tax
Department. The Rules governing the
petitioners as of today are the Trade Tax
Rules, 1983 as Merger Rules, 2022 is a
onetime measure to protect the service of
the petitioners and not special Service
Rules for them and Rule 4(5) of the Merger
Rules, 2022 clarifies the submission of the
State that the services of the merged
employees will be governed by the
concerned Service Rules governing the
cadre. Rule 4(7) of the Merger Rules, 2022
plays a pivotal role in preserving and
protecting the continuity of services of the
petitioners. Generally, an employee is born
into the service or a cadre of service by two
methods - (1) direct appointment and (2)
promotion. But in case of administrative
exigency, in order to protect the services of
the petitioners, their services were merged
into the existing cadre of the Commercial
Tax Department. Hence their date of
merger is being treated as appointment in
the related service cadre of Commercial
Tax Department to maintain the continuity
of service. Further, the continuity of service
has been maintained throughout and the
petitioners' appointments have not been
treated as fresh appointments. Thereafter,
vide order dated 11.01.2023, a Committee
was constituted to determine the seniority
of the District Entertainment Tax Officer
(DETO) as per the Merger Rules in the
Commercial Tax Department. It is further
stated
that
the
seniority
list
dated
18.08.2023 has been finalized in which the
petitioners have been placed as per their
seniority in accordance with the provisions
of Rule 3(3) of the Merger Rules, 2022.

(30)
Learned
counsel
for
the
respondents have further submitted that the
Merger Rules, 2022 were framed in order
to protect the services of the employees of
the
Entertainment
and
Betting
Tax
Department.

(31) His further submission is that
since it is a policy decision of the
Government and in order to protect their
services, the impugned Merger Rules, 2022
have been framed. Thus, no prejudice has
been caused to the petitioners and both the
writ petitions are liable to be dismissed.
656 INDIAN LAW REPORTS ALLAHABAD SERIES
(32) We have considered the
submissions made by the learned Counsel
for the parties and perused the material
available on record.

(33) Initially, petitioners of Writ-A
No. 3770 of 2023 who were appointed on
the post of Entertainment Tax Inspector in
the department of Entertainment and
Betting Tax in the year 1997 were
governed under U.P. Entertainment and
Betting Tax Act, 1979 and with the passage
of time, they were promoted to the post of
District Entertainment Tax Officer in the
year 2016. Details of the petitioners are
given hereunder:-

Sl
.
N
o.

Name
of the
petitio
ner
Date
of
joining
in the
depart
ment
Date of
promotio
n
of
Entertain
ment
Tax
Officer
Date
of
retirem
ent
1.
Jai
Prakas
h
Chand
24.07.
1997
25.10.20
16
31.01.
2025
2.

Piyus
h
Kuma
r
Yadav
01.08.
1997
25.10.20
16
30.1.2
029
3.
Kalpa
na
Kanna
ujia
04.07.
1997
02.11.20
16
30.04.
2027

(34) The details of petitioners of WritA No. 3769 of 2023 are given hereunder:-

S
l.
N
o.
Nam
e
of
the
petiti
Date
of
joinin
g
in
Date
of
prom
otion
Date
of
prom
otion
Date
of
retire
ment
oner

the
depar
tment

as
Enter
tainment
Tax
Offic
er

as
Assis
tant
Com
mission
er

1. Rosh
an
Lal

22.11
.1996

09.04
.2015

01.07
.2020

31.03
.2025

2.

Prabh
at
Chau
dhary

13.06
.1997

04.01
.2016

01.07
.2020

30.04
.2028

3.

Sursh
Chan
dra
Singh
Bisen

31.07
.1997

04.01
.2016

01.01
.2021

31.01
.2027

(35) Since the matter revolves around
the provisions of Section 174 in The U.P.
Goods and Services Tax Act, 2017, it is
necessary to reproduce it as under:-

"174. Repeal and saving

(1) Save as otherwise provided in
this Act, on and from the date of
Commencement of this Act,

(i) The Uttar Pradesh Value
Added Tax Act, 2008, except in respect of
goods included in the Entry 54 of the State
List of the Seventh Schedule to the
Constitution,

(ii) The Uttar Pradesh Tax on
Entry of goods into local areas Act, 2007

(iii)
The
Uttar
Pradesh
Entertainment and Betting Tax Act, 1979

(iv)
The
Uttar
Pradesh
Advertisements Tax Act. 1981
2 All. Jai Prakash Chand & Ors. Vs. State of U.P. & Anr.
657

(v) The United Provinces Sales of
Motor Spirit, Diesel Oil and Alcohol
Taxation Act, 1939

(vi) The Uttar Pradesh Sugarcane
(Purchase Tax) Act, 1961 (hereafter
referred to as the repealed Acts) are hereby
repealed."

(36) On commencement of The U.P.
Goods & Services Act, 2017, the aforesaid
six Acts, including the Uttar Pradesh
Entertainment and Betting Tax Act,
1979, have been repealed, whereunder the
petitioners discharged their duties. In view
of this, the State Government took a policy
decision to merge the employees of the
Entertainment and Betting Tax Department
into
the
posts
of
Commercial
Tax
Department w.e.f. 24.04.2018. However,
the policy decision was not crystallized
through the exercise of statutory Rules until
the Merger Rules, 2022 were framed and
notified w.e.f. 21.07.2022. The promotional
benefits until framing of the Merger Rules
were carried out as per the previous Rules
of Entertainment Tax Department.

(37) At the cost of repetition, it is
mentioned that overriding effect has been
mentioned in Rule 2 of the Merger Rules.
Rule 3(3) of the Rules defines the date of
'Substantive Appointment' as the date of
appointment at the post held on the date of
Notification dated 24.04.2018. Rule 3 (4)
of the Merger Rules, 2022 defines the
'cadre' of posts in the Commercial Tax
Department and the Entertainment Tax
Department. Rule 4(4) provides that
promotion and other service matters of
related posts shall be decided under the
concerning Rules of service cadre of the
Commercial Tax Department. Rule 4(5) of
the Merger Rules, 2022 clarifies that the
services of the merged employees shall be
governed by the concerned Service Rules
governing the cadre. Rule 4(7) of the
Merger Rules, 2022 plays a pivotal role in
preserving and protecting the continuity of
services of the petitioners. Hence their date
of merger is being treated as the date of
appointment in the related service cadre of
Commercial Tax Department to maintain
the continuity of service. Further, the
continuity of service has been maintained
throughout
and
the
petitioners'
appointments have not been treated as fresh
appointments.

(38) At this stage, it is necessary to
look into the order dated 19.05.2023 passed
by this Court which reads as under:-

"Connect and list with Writ-A
No.3769 of 2023 in the week commencing
24th July, 2023.

Notice on behalf of respondents
has been accepted by the office of learned
Chief Standing Counsel.

Considering
the
imminent
problem being faced by the petitioners who
prior to their merger in the Commercial
Tax Department were working in the
Entertainment Tax Department, in relation
to their promotional avenues, we direct that
the respondents shall file their counter
affidavit within a period of six weeks. We
expect that within the time being stipulated
herein, respondents shall file counter
affidavit considering the urgency in the
matter."

(39) Pursuant to the order dated
19.05.2023, the State Government has
filed its counter affidavit wherein the
respondents have asserted that only the
employees of the Entertainment Tax
Department have been merged into the
Commercial Tax Department and not the
posts
of
the
Entertainment
Tax
Department.
658 INDIAN LAW REPORTS ALLAHABAD SERIES

(40) Furthermore, in order to satisfy
the query of this Court, instructions dated
24.10.2024 were placed before this Court
wherein the exact number of posts
available in the year 2018 and 2024 were
stated. Thus, a bare perusal of the
instructions
dated
24.10.2024
would
demonstrate that not a single post has been
increased
in
the
Commercial
Tax
Department. Hence, no post of erstwhile
Entertainment and Betting Tax Department
has been transferred to the Commercial Tax
Department. This position is fortified from
the averments made in para - 16 of the
counter affidavit as stated in earlier part of
the judgment.

(41) Moreover, in the midst of hearing
of the aforesaid writ petitions, this Court
vide order dated 04.12.2023 directed the
learned Counsel for the State to obtain
complete instructions as to how the
members of service belong to U.P.
Entertainment and Betting Tax Service can
be equitably provided promotional avenues
in the new Merger Rules, 2022 in the
Commercial Department. The order dated
04.12.2023 reads as under:-

"1. Heard Sri Apoorva Tewari
learned counsel for the petitioners and Sri
Akash Sinha learned Standing Counsel for
the State.

2. Learned counsel for the State
has prayed for four days' time to obtain
complete instructions as to how the
members of service belonging to U.P.
Entertainment and Betting Tax Service can
be
equitably
provided
promotional
opportunity as regards eligibility under the
new rules i.e. Employees of Entertainment
Tax
Department(Service
Cadres
of
Officers, Inspectors and Other Employees)
in the related Cadres of Commercial Tax
Department, Uttar Pradesh Merger Rules,
2022 at par with the members of service in
commercial tax department on merger of
the two.

3. List/put up on 11.12.2023
amongst ten cases.

4. Sri Kuldeep Pati Tripathi,
learned Additional Advocate General shall
assist the Court in the matter."

(42) Pursuant to the order dated
04.12.2023 passed by this Court, the learned
Counsel for the State has reiterated the stand
taken by the State Government earlier.

(43) From the material available on
record and from the submissions made by
the learned counsel for the parties, it is
clear that till framing of Merger Rules,
2022 the petitioners have no grievance as
they continued to enjoy the service benefits
as per the Uttar Pradesh Entertainment and
Betting Tax (Gazetted) Service Rules,
1992. On account of Merger Rules, 2022,
when they have been placed at the bottom
of the seniority list in the respective cadres
of the Commercial Tax Department as on
24.04.2018, they raised their grievance by
means of the aforesaid writ petitions stating
that the action taken by the State
Government is hit by Article 14 of the
Constitution of India.

(44) For the sake of argument, if the
petitioners had been retrenched from the
erstwhile department in view of repeal of
the Act, on coming into force of U.P.
G.S.T. Act, 2017, their fate would be in
dilemma. Instead, the State Government
took a conscious decision to merge all the
employees of the Entertainment & Betting
Tax Department into the Commercial Tax
Department.

(45)
Although
the
reasons
for
placement of the employees of the
2 All. Jai Prakash Chand & Ors. Vs. State of U.P. & Anr.
659
Entertainment and Betting Tax Department
junior to the Commercial Tax employees in
the service year has been mentioned above,
but the placement of the petitioners in the
Merger Rules, 2022 is a part of policy
decision and the petitioners have no locus
to question the policy decision taken by the
State Government.

(46) The only grievance raised before
this Court is that the placement of the
petitioners in the Commercial Department
has caused prejudice. In this regard,
reliance placed by the learned counsel for
the
respondents
on
Indian
Airlines
Officers' Assn. v. Indian Airlines Ltd. and
others & other connected appeals [(2007)
10 SCC 684] is fully applicable as it has
been held that the whole scheme cannot be
said to be arbitrary/discriminatory merely
because some employees suffer in terms of
promotion/seniority and ultimately their
chances of promotion are affected.

(47) So far as the chances of
promotion of petitioners is concerned, the
law on this point has crystallized as
chances of promotion are not a condition of
service and change in chances of promotion
do not hit Article 14 of the Constitution of
India. The contention of the learned
counsel for the respondents is fortified by
the law laid down by the Apex Court in the
cases of The State of Mysore and others v.
G.
N.
Purohit
and
others
[MANU/SC/0459/1967],
Ramchandra
Shankar v. State of Maharashtra and
others
[(1974)
1
SCC
317],
Air
Commodore Naveen Jain v. Union of
India & others [2019 (10) SCC 34] and
Bihar State Electricity Board (supra).

(48) For the reasons stated above, it
is amply clear that there is no violation of
Articles 14, 16 & 21 of the Constitution of
India and since nothing in the Merger
Rules, 2022 violates the aforesaid Articles,
the prayer made by the petitioners in both
the writ petitions for declaring it ultra vires
has no substance and the same has no force
in law as the matter pertains to policy
decision taken by the State Government.
The decision of the Apex Court in the case
of State of Uttar Pradesh and others v.
Principal, Abhay Nandan Inter College
and others [(2021) 15 SCC 600] placed by
the learned Counsel for the State is
applicable to the present case.

(49) Since the decisions taken by the
State
Government
are
purely
policy
decisions, they have to be examined in light
of the catena of judgments passed by the
Apex Court where the scope of interference
by the courts in matters of policy is well
established.
Judicial
review
is
the
cornerstone of constitutionalism and is a
part of our basic structure. Despite this
understanding, the Supreme Court has time
and again reiterated how, by way of
judicial review, policy decisions of the
State should not be interfered with unless
they are grossly arbitrary or irrational as
there is a need to maintain separation of
powers.

(50)
In
Fertilizer
Corporation
Kamgar Union (Regd.), Sindri & Ors. v.
Union of India & Ors., (1981) 1 SCC 568,
the Apex Court has observed as under:-

"35. A pragmatic approach to
social justice compels us to interpret
constitutional provisions, including those
like Articles 32 and 226, with a view to see
that effective policing of the corridors of
power is carried out by the court until
other ombudsman arrangements - a
problem with which Parliament has been
wrestling for too long - emerges. I have
660 INDIAN LAW REPORTS ALLAHABAD SERIES
dwelt at a little length on this policy aspect
and the court process because the learned
Attorney-General
challenged
the
petitioner's locus standi either qua worker
or qua citizen to question in court the
wrongdoings of the public sector although
he maintained that what had been done by
the Corporation was both bona fide and
correct. We certainly agree that judicial
interference with the administration cannot
be meticulous in our Montesquien system of
separation of powers. The court cannot
usurp or abdicate, and the parameters of
judicial review must be clearly defined and
never exceeded. If the Directorate of a
government company has acted fairly, even
if it has faltered in its wisdom, the court
cannot, as a super-auditor, take the Board
of Directors to task. This function is limited
to testing whether the administrative action
has been fair and free from the taint of
unreasonableness and has substantially
complied with the norms of procedure set
for it by rules of public administration."

(51)
In
Directorate
of
Film
Festivals & Ors. v. Gaurav Ashwin Jain &
Ors., (2007) 4 SCC 737, the Apex Court
had observed as follows:-

"16. The scope of judicial review of
governmental policy is now well defined.
Courts do not and cannot act as Appellate
Authorities
examining
the
correctness,
suitability and appropriateness of a policy,
nor are courts advisors to the executive on
matters of policy which the executive is
entitled to formulate. The scope of judicial
review when examining a policy of the
Government is to check whether it violates
the fundamental rights of the citizens or is
opposed to the provisions of the Constitution,
or opposed to any statutory provision or
manifestly arbitrary. Courts cannot interfere
with policy either on the ground that it is
erroneous or on the ground that a better,
fairer or wiser alternative is available.
Legality of the policy, and not the wisdom or
soundness of the policy, is the subject of
judicial review (vide Asif Hameed v. State of
J&K [1989 Supp (2) SCC 364], Sitaram
Sugar Co. Ltd. v. Union of India [(1990) 3
SCC 223], Khoday Distilleries Ltd. v. State of
Karnataka [(1996) 10 SCC 304], BALCO
Employees' Union v. Union of India [(2002)
2 SCC 333], State of Orissa v. Gopinath
Dash [(2005) 13 SCC 495 : 2006 SCC (L&S)
1225] and Akhil Bharat Goseva Sangh (3) v.
State of A.P. [(2006) 4 SCC 162] )."

(52) The aforementioned observation
had also been made in Indian Railway
Catering and Tourism Corporation Ltd. v.
Indian Railway Major and Minor Caterers
Association and Ors., (2011) 12 SCC 792.
The Apex Court held that policy decisions of
the Government should not be interfered with
unless the policy is contrary to provisions of
statutory rules or of the Constitution. In the
said case, no illegality or unconstitutionality
had been shown and the Apex Court held as
under:-

"2. By the impugned order, the
High Court has interfered with the
Catering Policy of 2005 in respect of
reservations. By now it is a well-settled
principle of law that policy decisions of the
Government should not be interfered with
in a routine manner unless the policy is
contrary to the provisions of statutory rules
or of the Constitution. Nothing has been
brought to our notice that the Policy is
contrary to the provisions of the statutory
rules or the Constitution. For this simple
reason, we set aside the order of the High
Court impugned herein."