# HUNDRAJ KANYALAL SAJNANI ETC v. UNION OF INDIA AND ORS - **Citation:** [1990] 1 S.C.R. 994 - **Court:** Supreme Court of India - **Decided:** 1990-03-16 - **Bench:** Sabyasachi Mukharjee Cj, B.C. Ray, L.M. c SHARMA, P.B. Sawant, K. Ramaswamy - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/hundraj-kanyalal-sajnani-etc-v-union-of-india-and-ors-10691 - **Pages:** 33 ## Headnote Indian Income-Tax, 1961/l.T.O. Group A and Group-BRecruitment Rules I988 and Seniority Rules, 1973. Sections 116, 117, 118 and 120-Group A and Group B Officers of lncome Tax Department-Classification-Whether constitutional-Seniority List of 1973-Whether valid. The main petition has been filed by the Income-tax Officers Gronp-A, challenging the Seniority Rules of 1973, which were framed by the Department pursuant to the directions given by this Court in an D earlier case B.S. Gupta v. Union of India, (1975] Supp. SCR 491. The circumstances that led to the filing of the instant petitions may be stated thus: The Government by virtue of the Rules propounded in its letter dated 29th September 1944, re-organised the Income-tax services into E Class I and Class II. The said Rules inter alia laid down that recruitment to the cadre of Income-tax Officers Gronp-A shall be from two sources i.e. direct recruitment and promotion,. the qnota for the two being 80% and 20% respectively. In 1945, the Government framed fresh recruitment rules wherein it was provided that the recruitment from the said sources will be made as per the directions of the Government, F in effect, keeping the recruitment quotas in abeyance. In September, 1949, the Government framed Seniority Rules and it was laid down that the promotees who had been certified by the Federal Public Commission, in any calendar year, shall be senior to all direct recruits who completed their probation during that year or after and are confirmed with effect from the date in that year or after. In the year 1950, the G Seniority Rules were again revised and the concerned Rule l(f)(ili) was amended .. By its letter dated 18.10.1951, the Government revised the quotas of direct recruits and promotees, in that, in the case of direct rC.:ruits the quota was reduced from 80% to 66-2/3% while in the case of promotees, the quota was enhanced from 20% to 33-1/3% and also amended the Rule J(f)(iii) of 1950 Rules. This revision, in effect, gave 3 H years' weightage in seniority to the promotees. These rules continued to 994 ., -. H.K. SAJNANI v. U .0.1. 995 operate till 1959. Between 1959 and 1960, 114. posts were npgraded to A ,,_ those of Income Tax Officers Group 'A' and the promotees were appointed to the said posts during that period. One Jaisinghani, a direct recruit challenged the constitutional validity of Rule l(l)(iii) and (iv) of 1952, Seniority Rules by means of a writ petition in the High Court, which gave 3 years' weightage to the B promotees in the matter of ilxation of their seniority and the implementation of quota. The High Court rejected the writ petition. In appeal, this Court held that the quota having been fixed by the Government in exercise of the powers conferred on it under Rule 4 of the 1945 Rules, the same was valid. The Court also upheld the weightage given to the promotees under the 1952 Rules. The Court further directed that roster c system should be adopted by framing an appropriate rule for working out the quota system between the direct recruits and promotees. It may ).- be mentioned that the court gave this direction because it was of opinion that the promotees were in excess of the prescribed quota for each of the years 1951 to 1956, and that they had been illegally appointed. It was therefore directed that the seniority of Jaisinghani and others similarly D placed be re-adjusted and the Government should prepare a fresh seniority list in accordance with law. "' Pursuant to the direction given by the Court, the government prepared seniority list which was challenged in the Delhi High Court by two separate writ petitions one by B.S. Gupta, a promotee of 1962 and E another by M.C. Joshi, a direct recruit. The High Court dismissed the writ petition of Gupta bot substantially allowed the one ftled by Joshi. In appeal this court by its order dated 16.8.1972 in Gupta's case AIR 1972 SC 262; held that seniority list was valid with regard to the promotions made upto January ## Text _Characters 0–39,976 of 84,445. This is a partial read: ask again with offset=39976 for what follows._ HUNDRAJ KANYALAL SAJNANI ETC. A v. UNION OF INDIA AND ORS. MARCH 16, 1990 B (SABYASACHI MUKHARJEE CJ., B.C. RAY, L.M. c SHARMA, P.B. SAWANT AND K. RAMASWAMY JJ.] Indian Income-Tax, 1961/l.T.O. Group A and Group-BRecruitment Rules I988 and Seniority Rules, 1973. Sections 116, 117, 118 and 120-Group A and Group B Officers of lncome Tax Department-Classification-Whether constitutional-Seniority List of 1973-Whether valid. The main petition has been filed by the Income-tax Officers Gronp-A, challenging the Seniority Rules of 1973, which were framed by the Department pursuant to the directions given by this Court in an D earlier case B.S. Gupta v. Union of India, (1975] Supp. SCR 491. The circumstances that led to the filing of the instant petitions may be stated thus: The Government by virtue of the Rules propounded in its letter dated 29th September 1944, re-organised the Income-tax services into E Class I and Class II. The said Rules inter alia laid down that recruitment to the cadre of Income-tax Officers Gronp-A shall be from two sources i.e. direct recruitment and promotion,. the qnota for the two being 80% and 20% respectively. In 1945, the Government framed fresh recruitment rules wherein it was provided that the recruitment from the said sources will be made as per the directions of the Government, F in effect, keeping the recruitment quotas in abeyance. In September, 1949, the Government framed Seniority Rules and it was laid down that the promotees who had been certified by the Federal Public Commission, in any calendar year, shall be senior to all direct recruits who completed their probation during that year or after and are confirmed with effect from the date in that year or after. In the year 1950, the G Seniority Rules were again revised and the concerned Rule l(f)(ili) was amended .. By its letter dated 18.10.1951, the Government revised the quotas of direct recruits and promotees, in that, in the case of direct rC.:ruits the quota was reduced from 80% to 66-2/3% while in the case of promotees, the quota was enhanced from 20% to 33-1/3% and also amended the Rule J(f)(iii) of 1950 Rules. This revision, in effect, gave 3 H years' weightage in seniority to the promotees. These rules continued to 994 ., -. H.K. SAJNANI v. U .0.1. 995 operate till 1959. Between 1959 and 1960, 114. posts were npgraded to A ,,_ those of Income Tax Officers Group 'A' and the promotees were appointed to the said posts during that period. One Jaisinghani, a direct recruit challenged the constitutional validity of Rule l(l)(iii) and (iv) of 1952, Seniority Rules by means of a writ petition in the High Court, which gave 3 years' weightage to the B promotees in the matter of ilxation of their seniority and the implementation of quota. The High Court rejected the writ petition. In appeal, this Court held that the quota having been fixed by the Government in exercise of the powers conferred on it under Rule 4 of the 1945 Rules, the same was valid. The Court also upheld the weightage given to the promotees under the 1952 Rules. The Court further directed that roster c system should be adopted by framing an appropriate rule for working out the quota system between the direct recruits and promotees. It may ).- be mentioned that the court gave this direction because it was of opinion that the promotees were in excess of the prescribed quota for each of the years 1951 to 1956, and that they had been illegally appointed. It was therefore directed that the seniority of Jaisinghani and others similarly D placed be re-adjusted and the Government should prepare a fresh seniority list in accordance with law. "' Pursuant to the direction given by the Court, the government prepared seniority list which was challenged in the Delhi High Court by two separate writ petitions one by B.S. Gupta, a promotee of 1962 and E another by M.C. Joshi, a direct recruit. The High Court dismissed the writ petition of Gupta bot substantially allowed the one ftled by Joshi. In appeal this court by its order dated 16.8.1972 in Gupta's case AIR 1972 SC 262; held that seniority list was valid with regard to the promotions made upto January IS, 1959 hut the same was not valid for the period ;. thereafter. The court accordingly set aside the list to the extent it F concerned the period from 16.1.1959 and directed the Department to prepare a fresh seniority list in accordance with the observations aud directions of this Court. The court came to the conclusion that with the upgrading of large number of posts and appointments of the promotees, the quota rule had collapsed and with that seniority rule giving weightage to the promotees bad collapsed. The court held that quota rule G came to an end on 16.1.1959. In pursuance of the aforesaid direction, < the government frame the impugned 1973 Rules and prapared a fresh seniority .list on February 1973, giving retrospective effect to the Rules from 15.1.1959. The Government also challenged the quota of direct recruits and promotees, making it 50% for each of them i.e. I :I. Seniority of officers upto 15.1.59 was ilxed as per old Rules and the H 996 SUPREME COURT REPORTS [ 1990] 1 S.C.R. A seniority from 16.1.1959 was fixed as per new rules; 73 promotees ·~- though promoted between 1956-58 could not be accommodated under the old rules, their seniority was fixed under the new rules. . ' In the present petitions, the petitioners contend· that this Court gave its direction in Gupta's case [1975] l, SCR 104; because for want B of sufficient material the court had come to the conclusion that the quota for recruitment of direct recruits and promotees had broken down as the promotees were appointed in excess of their entitlement though the requisite material showing the contrary was in possession of the government, which was suppressed. It is asserted by them that the material shows that in fact the appointment of the promotees was short ~• c of their quota. Hence they claim that not only the 1973 Rules be set aside but the appointments of the promotees be made and their seniority be rixed according to the rules prevailing prior of the said Rules. In the connected writ petitions, besides these contentions, validity of ,.( amendment of Sec. 117 of the Income Tax Act; and classification of Income '(['ax Officers in Group A and Group B ollicers have also been D questioned. Dismissing the writ petitions this Court held: HELD: It is clear from the table that the petitioners promotees ~ have .calculated the posts in the sanctioned strength not only in Grade E II but also in Grade I Posts when the posts available to them for promotion were only in grade II. Hence, their further calculations of the ~. working strength, the vacancies and the quota available to them in the vacancies and of the dificiencies or the excess in the quota are 1 erroneous. J1009F] Even the Government had independently come to the conclusion ""' F as early as in 1986 that neither the Rules of seniority nor the Seniority List of 1973 had done injustice to the promotees. In fact, the Rules of 1973 had rised the quota of the promotees from 33-1/3% to 50%. The seniority of the promotees was adjusted upto 15th January, 1959 on the basis of the earlier quota Rule and the Seniority of those who were G appointed later and of those who were found in excess of their quota upto that date, were adjusted according to the new Rule. HOI6F-GJ ,;rWhat this Court wanted to convey in the earlier part of its judgment was that when the Government decides to fill in the vacancies, it is not necessary to defer the appointments from one source pending the Ji appointments from the other source. But that is when the Government l ~ \\ ~ .. ....,; ' - - H.K. SAJNANI v. U.0.1. 997 !fecides to fill in the vacancies and not before it. [IOI7F] Power is vested in the legislature to appoint different classes of officers and this carries with it also the power to demarcate their duties, functions and responsibilities. Whether in fact there is such a . division of powers, functions and responsibilities or not, has nothing to do with the validity of the power to make the classification. [IOI9H; I020A] The distinction between Group-A and Group-B Officers has been A B in existence from the very beginning. The distinction has been maintamed statutorily with distinct powers and jurisdiction, hierarchical lJosition and eligibility qualifications. The sources of their appointment and the authorities vested with the power to appoint them have· also been different. The distinction between the two further has been C made on the basis of the class of work and the responsibility entrusted to each. The work which is of more than a routine nature and which involves a detailed investigation either on account of the class of assessees or of the complexities of the returns filed, is entrusted to the officers belonging to Groups Group-A (now Assistant Commiso sioners) while the assessment work of a summary nature or of returns involving simple transactions is entrusted to Officers belonging to Group-B (now ITOs). [I023C-E] By the very nature of the operation involved, the administration has to have the power to classify the work and to appoint personnel with E different skill and talent to, execute the different types of work. The legislature being mindful of this need has deliberately created .the two classes of officers as is evident from the provisions of Section ll 7 even prior to its present amendment. Even after the amendment the said distinction has been maintained. After 1987 amendment the situation has further changed and the dotes, functions, jurisdiction and powers F of the officers have been rationalised clearly demarcating the spheres of work. In an organisation of this kind, with country wide offices dealing with various categories of assessees and incomes, some dislocation func· tional overlapping and want of uniformity in the assignment of work during some period is not unexpected; and it does appear that during some period, the situation in the Department was out of joint. That is G why steps were taken to straighten it out by amending the Income Tax Act and making the rules and issuing the relevant notifications, circulars and orders. !I024B; 1026B-C] If during this period on account of the exigencies of service, some ad hoc appointments· of Group B officers were made to Group A posts, H A 998 SUPREME COURT REPORTS [ 1990) 1 S.C.R. and Grade II or Group B officers were required to perform the same functions and discharge the same duties as Group A officers, they can at best claim the emoluments of Group A officers, but certainly not the equalisation of the two posts of that account. [ 10260-E] S.G. Jaisinghani v. Union of India and Ors., [1967) 2 SCR 703; B B.S Gupta etc. v. Union of India and Ors/ etc., [1975) 1 SCR 104; Kamal Kanti Dutta and Ors. v. Union of India and Ors., [1980) 3 SCR 811; K.M. Bakshi v. Union of India, AIR 1962 SC 1139; Federation of All India Customs and Central Excise Stenographers (Recognised) and Ors. v. Union of India and Ors., [1988) 3 SCC 91; V. Markandeya and ~rs. v. State of Andhra Pradesh and Ors., [1989) 3, SCR 191, referred to. c D E ORIGINAL JURISDICTIO~: Writ Petition Nos. 4146 of 1978 and 546-47 of 1983. (Under Article 32 of the Constitution of India.) Rajinder Sachhar, Govind Das, T.S. Krishnamurthy Iyer, A.K. Sanghi, Ravinder Bana, R.B. Misra, Miss A. Subhashini, Bhisamber Lal and Miss Gitanjali Mohan for the appearing parties. The Judgment of the Court was delivered by SAW ANT, J. These three petitions raise some common issues, and hence they are being disposed of by this common judgment. W.P. No. 4146of 1978. F This petition is filed by the promotee Income Tax Officers Group-A seeking to challenge the Seniority Rules of 1973 on the ground that they were framed pursuant to a direction given by -this Court in Bishan Sarup v. Union of India & Ors., [1975] Suppl. SCR 491 decided on August 16, 1972. According to the petitioners, the said direction was given because for want of sufficient material, the Court G had come to the conclusion that the quota for recruitment of the direct recruits and the promotees had broken down as the promotees were appointed in excess of their entitlement in the quota. According to the petitioners, the requisite material showing the contrary was in the possession of the Government but did not come forth, then. Tl)e said material shows that in fact the appointments of the promotees were H short of their quota. The petitioners, therefore, claim that not only the • ~ I , r ).. H.K. SAJNANI v. U.0.1. [SAWANT, J.) 999 Seniority Rules of 1973 should be set aside, but the appointments of the promo tees be made and their seniority be fixed, according to the Rules prevailing prior to the said Rules. 2. The relevant facts necessary to dispose of the petition are as follows. Pursuant to the Rules propounded in their letter of September 29, 1944, the Government reorganised the existing Income Tax services into Class-I and Class-II. The Rules, among other things, laid down th.at the recruitment to the cadre of Income Tax Officers-Group-A will be from two sources, viz., direct recruitment and promotion, the quota for the two being 80%-20% respectively: In 1945, the Government framed fresh Recruitment Rules for A B c the said cadre of Class-I and Class-II ITOs. Rule 3 of the said Rules reiterated that the recruitment to the said cadre will be from the two sources, viz., direct recruitment and promotion. Rule 4 of the said Rules, however, provided that the recniltment from the said sources D will be made as per the discretion of the Government. This provision had the effect of virtually keeping in abeyance the recruitment quotas for the direct recruits and the promotees laid down in the Recruitment RulesofSeptember29, 1944. On September 9, 1949, the Government framed Seniority Rules. E Rule l(f)(iii) thereof provided .that the promotees who had been certified by the Federal Public Service Commissio~ in any calendar year shall be senior to all direct recruits who completed their probation during that year or after, and arc confirmed with effect from the date in that year or after. On January 1, 1950, the Seniority Rules were revised and the aforesaid Rule l(f)(iii) was amended as follows: F "(f) The seniority of direct recruits recruited on the results of the examinations held by the Federal Public Service Commission in 1944, and subsequent years, shall be reckoned as follows: (i) Direct recruits of an earlier examination shall rank above those recruited from subsequent examination. (ii) Direct recruits of any one examination shall rank inter se in accordance with the ranks obtained by them at that examination. G H A B c 1000 SUPREME COURT REPORTS (1990] 1 S.C.R. (iii) The promotees who have been certified by the Commission in any calendar year shall be senior to all direct recruits who complete their probation during that year or after and are confirmed with effect from a date in that year or after. Provided that a person initially recruited as Class-II Income Tax Officer, but 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 appointments to Class I service, be deemed to be promotee for the purpose of seniority." 3. By its letter of October 18, 1951, the Government revised the qaotas of direct recruits and promotees (which was earlier laid down in their letter of September 29, 1944), from 80% and 20% to 66-2/3% and 33-1/3%. On September 5, 1952 the Government also revised D further the Seniority Rule l(f)(iii) of January 24, 1950 as follows: E F G "(f) The seniority of direct recruits recruited on the results of the examinations held by the Federal Public Service Commission in 1944, and subsequent years, shall be reckoned as follows: (i) Direct recruits of an earlier examiation shall rank above those recruited from a subsequent examination. (ii) Direct recruits of any one examination shall rank inter se in accordance with the ranks obtained by them at that Examination. (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." . It will thus be clear that this revision,.among other things, gave H to the promotees, a wrightage of three years in seniority. These Rules continued to operate till 1959. I i • ' ~ H.K. SAJNANI v. U.0.1. [SAWANT, J.] 1001 4. It appears that between 1959 and 1960, about 114 posts were upgraded to those of Income Tax Officers Group-A, and the promotees were appointed to the said posts during the relevant period. 5. One Jaisinghani, a direct recruit challenged the constitutional validity of Seniority Rule l(f)(iii) and (iv) of 1952 Seniority Rules which had in effect given three years' weightage to the promotees in the matter of fixation of their seniority, and also the improper implementation of the quota by the Government, by filing a writ petition before the Punjab High Court. The High Court rejected the writ petition, and in the appeal filed against the said decision, this Court, by its decision in S.G. Jaisinghani v. Union of India & Ors., [1967] 2 SCR 703 held that the quota was fixed by the Government by its letter of October 15, 1951 in exercise of the power given to it urider Rule 4 of the Recruitment Rules of 1945 and hence it was valid and proper. The Court also upheld the weightage given to the promotees under the Seniority Rules of 1952. The Court, however, directed that for future years, the roster system should be adopted by framing an appropriate rule for working out the quota between the direct recruits and the promotees, and that a roster should be maintained indicating the order in which appointments are made by direct recruitment and by promotion, in accordance with the percentage fixed under the statutory Rules for each source of recruitment. The Court gave these directions because the Court came to the conclusion that the promotees were in excess of the prescribed quota for each of the years 1951 to 1956 and onwards, and that they had been illegally so promoted. The Court further held that the appellant Jaisinghani was entitled to a writ commanding the respondents to adjust the seniority of the appellant and other officers similarly placed like him, and to prepare a fresh seniority list in accordance with law after adjusting the recruitment for the period 1951 to 1956 and onwards, in accordance with the quota rule prescribed in the Government-letter of October 18, 1951. The Court, however, made it clear that the said order would not affect such ClassII officers who haci been appointed permanently as Assistant Commissioners of Income Tax. 6. Pursuant to the direction given by the Court, the Government prepared a Seniority List on July, 15, 1968. This Seniority List was challenged in Delhi High Court in two separate writ petitions, one filed by one B.S. Gupta, a promotee of 1962 and another by one M.C. Joshi, a direct recuit. The Delhi High Court by its decision of July 29, 1970 dismissed Gupta's petition and substantially allowed Joshi's petition and gave directions to prepare a fresh seniority List. Against the A B c D E F G H A B c 1002 SUPREME COURT REPORTS [ 1990] 1 S.C.R. decision in both the petitions, Gupta filed two separate civil appeals. By its decision dated August 16, 1972 in the said appea:s in B.S. Gupta case (supra) briefly known as 1st Gupta case, this Court held that the Seniority List was valid with regard to the promotions made upto January 15, 1959, since it was prepared on the baisis of the quota rule of October 18, 1951 and the Seniority Rule l(f)(iii) of 1952 Seniority Rules. The Court, however, held that the said List would not be valid for the period thereafter. The Court, therefore, set aside the said list to the extent it concerned the period from 16.1.1959 onwards and directed the Department to prepare a fresh seniority list, in the light of the observations made in the judgment. The Court also directed that the seniority list from January 15, 1959 should be prepared in accordance with a seniority rule to be framed afresh by the Government. The Court observed that the proceedings will have to be kept pending till such seniority list was prepared and filed before the Court. It is necessary to state here that the Court had given the said direction because it had come to the conclusion that with the upgrading of a large number of posts and the appointments of the promotees made to ID them, the quota rule had collapsed, and with that, the seniority Rule giving weightage to the promotees had also collapsed. The decision to upgrade 100 posts was taken in January 1959 and the remaining 114 posts in the year 1960. The Court, therefore, held that the quota rule came to an end on January 16, 1959 when sanction to upgrade 100 temporary posts was given by the President and with that went the IE seniority Rule. 7. In pursuance of the above direction, the Government framed the impugned Seniority Rules of 1973, and prepared a fresh seniority -i list on February 9, 1973, giving retrospective effect to the said Rules I from January 15, 1959. The gist of the 1973 Seniority Rules was that F the seniority of the direct recruits and promotees appointed on and ...l. from January 16, 1959 was to be fixed as follows: First promotee and then direct recruit and so on. The result of these Rules was that not only the seniority Rule but also the quota of the direct recruits and the promotees was changed from 66-2/3% and 33.1/3% to 50% and 50% or l: 1. It may be mentioned here that the new seniority list was preG pared by fixing the seniority upto 15th January, 1959 according to the old Seniority Rules, and the seniority from 16th January, 1959 on the basis of the new Rules. However, 73 of the promotees who were promoted in excess of their quota between 1956-58 could not be accommodated as per the earlier quota rule, in the list of seniority prepared upto 15th January, 1959, and hence the seniority of the said f1I 73 promotees was fixed according to the new seniority Rules which - ) .. H.K. SAJNANI v. U.0.1. (SAWANT, J.I 1003 applied to the appointments made from 16th January, 1959. Both the new Rules and the new Seniority List were filed in this Court as per the earlier direction. 8. The same Shri B.S. Gupta challenged both the validity of the new Seniority Rules of 1973 and as well as the new Seniority List. This Court by its decision dated 16th April, 1974 in Bishan Sarup Gupta etc. etc. v. Union of India & Ors. etc. etc., [1975] l SCR 104, known as 2nd Gupta case, upheld both the Seniority Rules as well as the Seniority List. 9. It further appears that one Kamal Kanti Dutta and others had also filed an independent writ _petition challenging the Seniority List of February 9, 1973. It was dismissed by this Court by its decision dated 23rd April, 1980 in Kamal Kanti Dutta & Ors. v. Union of India & Ors., [1980] 3 SCR .811 upholding the validity of the said Seniority List. While disposing of the said writ petition, this Court made the. following observations on which a strong reliance is placed by the present petitioners: "It shall have been noticed that we have refused to reconsider our decisions not so much because of the view taken in the various cases cited by the learned Solicitor General, A B c D like Sajjan Singh v. State of Rajasthan, [1965] I SCR 933, 947, 948 that this Court should not review its decisions too E readily, as because on merits, we see no justification for reconsidering the judgment already rendered by this Court. No fresh facts are brought to our notice by way of discovery of new and important evidence which would justify reconsideration of the decisions already rendered by this Court after the most careful examination of the F competing contentions. The Report of the Rajya Sabha Committee on petitions shows, as already indicated that the relevant files are still"not traceable" That judgment was by a majority with Justice D.A. Desai delivering a dissenting judgment. Since the petitioners here are relying also upon G some observations made in the dissenting judgment, we may reproduce them here: "In the light of the materials now placed especially the files which were withheld from the Court and the Committee, the onlr, view that I express is that enough" compelling and H A 1004 SUPREME COURT REPORTS [1990] 1 S.C.R. necessary material has been placed on record making out a strong case for reconsideration of these decisions." The Committee referred to in the aforesaid observation is the Rajya Sabha Petition Committee. B 10. The present petition had also come to be dismissed erroneously along with the Writ Petition of Kamal Kanti Dutta (supra). It was restored for hearing on September 9, 1980. 11. On July 28, 1982, the Parliamentary Committee on Subordinate Legislation published its 12th Report wherein it referred to a letter of February 4, 1976 from the Minister of State for Finance. The C Committee stated that the Seniority Rules of 1973 were unfair and hence they should be scrapped with effect from January 15, 1959 and that fresh equitable seniority rules be framed. The Commitiee recommended that the artificial distinction between the ITO Group-A and Group-B should be abolished as they were performing identical funcD lions and were working on interchangeable posts. The Committee also recommended the grant of the same weigbtage in seniority to the promo tees from 15th January, 1959 as was available to them before that date. The Committee, further recommended an increase in the quota of promotions from Group-B to Group-A on account of an unprecedented stagnation of Group-B service, as a direct result of the E Seniority Rules of 1973. It does not appear that these recommendations were accepted. We are referring to these recommendations of the Committee because the petitioners have made a reference to them and not because they are legally binding. 12. Thereafter, on February 16, 1983, the accompanying Writ p Petitions, viz., Nos. 546-47 of 1983 were filed challenging (i) the validity of Section 117 of the Income Tax Act, 1961, (ii) the classification of Income Tax Officers in Group-A and Group-B Officers, (iii) the Seniority Rules of 1973 and (iv) the Seniority List prepared on their basis. G The last two reliefs claimed in the said petitions are common to the present petition and hence they will be disposed of along with the judgment in the present case. The first two reliefs and the reliefs claimed incidental thereto will be dealt with separately. 13. It is further necessary to note that while admitting the H accompanying petitions, the Court bad passed the following order: -·· ., . H.K. SAJNANI v. U.0.J. (SAWANT, l.] 1005 "Subject to the specific condition that the petitioners shall not be permitted to reopen whatever classification was made in the c~dre of ITOs, in the past as also inter se seniority between direct recruits and promotees which had been upheld by the decisions of this Court in S.C. Jaisinghani, B.S. Gupta and KK Dutta's case, rule nisi limited to the question whether the classifiction of ITOs, into GroupA and Group-B u/s. 117 of the IT Act, 1961 is violative of Articles 14 and 16 of the Constitution. Even if the issue is answered in affirmative, the petitioners will be entitled to the relief, if any, only prospectively for future implementation of the decisions from the date of the judgment in the Petition. This order will not preclude any contention that can and may be raised in the Writ Petition No. 4146/78H.K. Sajnaniv. UOI & Ors., to be examined on merits." 14. On May 3, 1983, this Court passed an order in CMP Nos. 13200 and 6762 of 1983 in both the present and the accompanying writ petitions as follows: "In allowing prayer (i) of CMP No. 6762/83, we direct Writ Petition Nos. 546-47 /83 be heard alongwith Writ Petition. No. 4146/78 and that the grounds challenging the validity of seniority rule 1973 as taken in Writ Petition Nos. 546-47 I A B c D 83 are allowed to be taken in Writ Petition No. 4146/78,in E so far as the prayer (iii) of CMP is concerned, we direct the Government to file a statement in this Court before July 15, 1983 as to the result of the examination of the recommendation of the Committee on Subordinate Legislation and decision and other measures taken by the Government thereon." F 15. On February 27, 1985, the Court gave direction to the Government in CMP No. 1903 of 1983 in the present Writ Petition to allow the petitioners inspection of the files relating to the vacancies. The inspection was completed on October 7, 1985 which according to the petitioners shows the following facts: (i) that the relevant record is G · available and was always available with the Government and that its production was deliberately withheld from this Court, (ii) that the promotions were all within quota and that there was no excess. Rather there was a deficiency in promotions, (iii) that the quota rule was adhered to from year to year right from the year 1951 upto the date of the judgment in the 1st Gupta case (supra), (iv) that the quota rule did H ' 1006 SUPREME COURT REPORTS [1990] 1 S.C.R. A not collapse on 15.1.1959, (v) that as required by the exigencies of the service, the quota rule was amended/relaxed in the years 1958 and 1959, (vi) that in applying the quota rule in pursuance of the mandamus, the Government did not follow the principles decided by this Court in 1st Gupta case (supra) and committed the following errors: D F (a) The Government did not apply the quota to the vacancies existing at a particular point of time. Instead of doing so, it misinterpreted the quota rule of 66-2/3% and 33.1/3% as if it required that a ratio of 2: 1 had to be maintained in the cadre of Income Tax Officers and as if there had to be one promottee against evry 2 direct recruits. This erroneous interpretation was applied in clear breach of the principle laid down by this Court in the ]st Gupta case (supra). (b) Another error committed by the Government in applying the quota rule in violation of the principles decided by this Court in the 1st Gupta Case (supra) was that the substantive vacancies in the temporary posts which were a regular part of the cadre and which eventually became perrnanent were not taken into account while aplying the quota rule, with the result that the promotees were denied their share in such vacancies. The most harmful thing done by the Government was that it did not take into account substantive vacancies in temporary posts till 1963 for applying the quota rule and worked out the excess in promotions ignoring such vacancies. But, they started taking into account those very vacancies for direct recruitment from 1963 onwards. If such vacancies were taken into account prior to 1963 and the quota rule was applied to them, there would have been no excess in promotions as was erroneously worked out. On the contrary, there was a deficiency in promotions because of the incorrect application of the quota rule. ( c) The promo tees were not given their full quota even in the perrnanent vacancies which should have bee given to them irrespective of whether the direct recruitment was made in full. There was under utilisation of quota of direct recruits with the result that the promotees were denied their legitimate share even in perrnanent vacancies. In these circumstances, the actual appointments were taken as vacancies and were bound to result inevitably into excess of promotions. H 16. On the basis of these facts, which according to the petition- - • ' H.K. SAJNANI v. U.0.1. [SAWANT, J.] 1007 ers were revealed in their inspection, their case is that their.allegation, that the relevant files were available and yet were not produced before the Court and the further allegation that there were no excess promotions were borne out. This shows that the direction given in the ]st Gupta case (supra) to frame new rules and, hence, the new Seniority Rules of 1973 framed pursuant to these directions, were unwarranted, unjust and illegal. 17. The petitioners further contend that the principle that the vacancies mean those the Government wants to fill is not compatible with the principle laid down in the 1st Gupta case (supra) that the promotees should get their share of the quota irrespective of whether the direct recruits' quota is filled, or not. But in the present case, the contrary has happened, viz., the promotees' quota is calculated on the basis of the appointments of the direct recruits causing thereby injustice to the promotees by depriving so many of them of .their chances of promotion which were otherwise available. A B c 18. It is also the contentiqn of the petitioners that in fact, there D were vacancies and the Govenment wanted to fill those vacancies. This is evidenced by the fact that when new posts were created for the ,4. purpose of assessment work, the direct recruits were not available and hence, the promotions were made from Groilp-B to Group-A, and even Group-B Officers were appointed against Group-A posts and they performed identical functions as of Group-A Officers. This conE tention has also a bearing on the issue involved in Writ Petitions Nos. 546-47 of 1983 and.we will deal with i_t in that context, later. 19. While these petitions were pending, the Government on January 24, 1988 amended the Income Tax Act, 1961 with effect from April I, 1988 and, among other things, changed the designation of F Income Tax Officers and Assistant Commissioners as follows: Pre-Amendment Post-Amendment (a) Income Tax Officers Income Tax Officers (Group-B) G (b) Income Tax Officers Assistant Commissioners (Group A) (c) Assistant Commisioners Deputy Commissioner<: The amendment also substituted Sections 116, 117, 118 and 120 with H A B c 1008 SUPREME COURT REPORTS [1990) 1 S.C.R. effect from the same date, i.e., April 1, 1978 and authorised the Central Board of Direct Taxes to issue notifications authorising Chief Commissioners and Commissioners of Icome Tax to classify the work of newly designated Income Tax Officers and Assistant Commissioners, and to provide for the jurisdiction of the Income Tax Officers and Assistant Commissioners on the basis of quantum of income. According to the petitioners, this was done to destroy the cause of action Writ Petition Nos. 546-47 of 1983. 20. On May 12, 1988, the Government framed New Rules of Recruitment, among other things, providing for quota of 50% each to the promotees and direct recruits. In consequence, an application for amendment of Writ Petitions Nos. 546-47 of 1983 was filed raising additional grounds. 21. It will thus be apparent that the whole foundation of the case of the petitioner-promotees in the present petition is that the Seniority Rules of 1973 were m3de by the Government pursuant to the direction o of this Court in the 1st Gupta case (supra) on August 16, 1972 and that direction was given by this Court because 0n the basis of the material produced by the Government, this Court had come to the conclusion that the promotees were promoted in excess of their quota. According to them, however, the new material which they have discovered shows that in fact there were not only no excess promotees but in fact there E was a shortfall in their promotions as per their entitlement in the ) ~~· - 22. Both on behalf of the Government as well as the respondentUnion of India and the direct recruits, it is pointed out to us that the so-called new material produced on behalf of the petitioner-promotees F far from proving their allegation, supports the conclusion to which this Court had arrived at in the 1st Gupta case (supra). In this connection, it is pointed out that admittedly, there were at the relevant time Class- ! and Class-II posts of Income Tax Officers corresponding to Group-A and Group-B posts. Class-I or Group-A consisted of Grade-I and Grade-II Officers whereas Class-II or Group-B consisted of Grade-II G Officers. Group-B Officers were entitled to be promoted first to Group-A Grade-II posts. Hence, the vacancies available for promotion to the promotees which ought to be taken into consideration at any point of time are the vacancies in Grade-II posts of Class-I or Group-A. However, it is obvious from page 32 of Volume-II of their petition, that the petitioner-promotees have taken into consideration H vacancies not only in Grade-II posts but also in Grade-I posts to show 1 H.K. SAJNANI v. U.O.l. (SAWANT, J.] 1009 that in fact not only they were not promoted in excess but their promotions were short of the vacancies which were available to them in their quota. We may reproduce herein below the relevant table of the sanctioned strength, the vacancies, the quota for promotees, the actual number of promotions made and their deficit or excess in the quota since 1951 to 1958 as calculated by the petitioners on the said page 32. According to the petitioners, the figures in the table are taken from the newly discovered files: VACANCY POSITION FROM 1951- 1958 YearSanccionedstrength Total Working Strength Total Vacancies OuotaActualDeficit Grade I Grade II Gr. I Gr. II of pro-No. of ( - ) motproor ions motExcess ions (+) 77 + 98 175 241 (-) 34 A B c 1951 216 + 200 1952 224 + 221 1953 224 + 221 1954 224 + 221 1955 224 + 221 1956 224 + 221 1957 287 + 248 1958 290 + 248 416 445 445 445 445 83 + 130 + 169 + 113 196 249 129 ~ 259 186 157 ~ 326 119 80 83 62 40 49 38 31 D (-) 24 (-) 9 154 + 217 ~ 371 74 25 24 (-) 1 445 187 + 214 ~ 401 44 15 25 (+) 10 535 224 + 184 ~ 408 127 42 26 (-) 16 E 538 213 + 202 ~ 415 123 41 28 (-) 13 97-10 ~ 87 Net Deficiency 23. It is clear from the above table that the petitioner-promotees have calculated the posts in the sanctioned strength not only in GradeF II posts but also in Grade-I posts. When the posts available to them for promotion were only in Grade-II. Hence, their further calculations of the working strength, the vacancies and the quota available to them in the vacancies and of the deficiencies or the excess in the quota are erroneous. On behalf of the Government, the following calculations have been made for the relevant period from 1951 to 1958 on the basis G of the actual vacancies in the sanctioned strength of Grade-II posts of Group-A (Class-I). These calculations show that in fact during the said period, the promotees were promoted to Grade-II posts of Group-A (Class-I) in excess to the extent of 93. Therefore, the deficiency of 97 which they have shown in their appointments during the said period is obviously wrong. The said table first handed over ot us by Shri Govind H 1010 SUPREME COURT REPORTS [1990] 1 S.C.R. A Das, Counsel for the Government is prepared on the basis of the very same figures· on page 32 of the Writ Petition. It, now, forms an annexure ,!to the additional affidavit dated 2'.lrd January' 1990-filed by