(1) R.S. Dhaba Petitioner in this writ petition under Art. 226/227 of other Constitution has prayed for quashing of the order passed why the Commissioner of Income-tax respondent No. 2 on 22nd May, 1961, revering him form the post of officiating Income-tax Officer, Class II to that of officiating Inspector of Income-tax (Annexure B).
(2) A few relevant facts may be stated. The petitioner on 28th April 1947, joined the Income-tax Department as an upper-division clerk. He was confirmed in this post with effect from 1st December, 1949. He successfully passed the departmental examination in the year 1951 and was promoted as Inspector of Income-tax with effect from 25th October. 1951. He was given the second lift and appointed as officiating Income-tax Officer. Class II on 11th April, 1953. The Government of India, Home Affairs Memorandum No. F. 44/1/59-Estb (A), dated 15th April, 1959 (Annexure F) provides:
'It is, therefore, recommended that those promoted as well as the fresh entrants to a service should be kept on probation for a period of two years. The controlling authority may, however, have the discretion to count any period of successful officiation in the service as probationary period. While the normal probation may certainly be extended in suitable cases, it is not desirable that an employee should be kept on probation for years as happens occasionally at present. It is, therefore, suggested that, save for exceptional reasons, probation should not be extended for more than a year and no employees should be kept on probation for more than double the normal period'.
Shri M. Kasivisvanatha Pillai, Income-tax Commissioner, on 6th February, 1964, wrote a demi-official letter to Shri S. P. Pande, Secretary, Central Board of Direct Taxes, New Delhi, suggesting that the petitioner's record was unsatisfactory and that he proposed to revert him to the post of Inspector after giving him notice. He solicited approval of the Board and also wanted to be enlightened about the procedure he was required to follow in giving notice and issuing order of reversion finally. In this letter he referred to the unsatisfactory state of record of the petitioner and many complaints received boy the Department against his integrity and also the advice of the Chairman of the Departmental promotions Committee that the petitioner should be given notice and recreated. A copy of this letter is on the Departmental file produced by the learned counsel for the respondents and was indeed referred to during the course of arguments. On receipt of the advice from the Central Board of Direct Taxes, Shri S. R. Mehta, who succeeded Shri M. Kasivisvanatha Pillai as Income-tax Commissioner, passed the impugned order in exercise of his powers under Exception IV below Rule 13 of the Central Civil Service (Classification, Control and Appeal) Rules, 1957.
The petitioner alleged that there were 38 persons working as Income-tax Officers, Class II who were junior to him at the time when he was reverted and subsequent to his reversion more persons junior to him had been promoted as Income-tax Officers, Class II. He impugned the validity of the order of his reversion on the grounds that he had been officiating for eleven years as Income-tax Officer, and the order demoting him to the post of officiating Inspector of Income-tax was male fide on the face of it, that Shri S.R. Mehta passed this order without applying his mind and that the order of reversion attached a stigma against him and would very much stand in his way for future promotions. The other grounds mentioned by him in the petition in support of his prayer were not pressed at the time of arguments and so need not be mentioned here.
(3) The respondents in their written statements pleaded that the petitioner was appointed as officiating Income-tax Officer because he had passed the Departmental examination and not that he had an outstanding record, that Shri S. R. Mehta passed the impugned order after applying his mind and that the action taken against the petitioner was not male fide. According to them the petitioner was reverted because his working was not found satisfactory and that there was no stigma attached in his reversion and as such the provisions of Art. 311 of the Constitution could not be availed of obey him. They finally urged that the petitioner being the holder of the post in officiating capacity only could be reverted and the reversion in his case was not by way of punishment but merely to ensure the efficiency of the service.
(4) The Supreme Court while dealing with the question of reduction from an officiating higher rank to the substantive lower rank in the case of Parshotam Lal Dhingra v. Union of India, AIR 1958 SC 36 at p. 49, column No. 2 observed:--
'A reduction in rank likewise may by way of punishment or it may be an innocuous thing. If the Government servant has right to a particular rank, then the very reduction form that rank will operate as a penalty, for he will then lose the emoluments and privileges of that rank. If, however, he has no right to the particular rank, his reduction from an officiating higher rank to his substantive lower rank will not ordinarily be a punishment. But the mere fact that the servant has no title to the post or the rank and the Government has, by contract, express or implied, or under the rules, the right to reduce him to a lower post does not mean that an order of reduction of a servant to a lower post or rank cannot in any circumstances be a punishment. The real test for determining whether the reduction in such cases is or is not by way of punishment is to find out if the order for the reduction also visits the servant with any penal consequences. Thus if the order entails or provides for the forfeiture of his pay of allowances or the loss of his seniority in his substantive rank or the stoppage or postponement of his future chances of promotion, then that circumstance may indicate that although in form the Government had purported to exercise its right to terminate the employment or to reduce the servant to a lower rank under the terms of the contract of employment or under the rules, in truth and reality the Government has terminated the employment as and by way of penalty. The use of the expression 'terminate' or 'discharge' is not conclusive. In spite of the use of such innocuous expressions, the Court has to apply the two tests mentioned above, namely, (1) Whether the servant had a right to the post or the rank, or (2) whether he has been visited with evil consequences of the kind hereinbefore referred to If the case satisfies either of the two tests then it us be held that the servant has been punished and the termination of his service must be taken as a dismissal or removal from service or the reversion to his substantive rank most be regarded as a reduction in rank and if the requirements of the rules and Art. 311, which give protection to Government servant have not been complied with, the termination of the service or there reduction in rank must be held to be wrongful and in violation of the constitutional right of the servants'.
The same view was reiterated in State of Bihar v. Gopi Kishore Prasad, AIR 1960 SC 689; Madhav Laxman Vaikunthe v. State of Mysore, AIR 1962 SC 8; State of Bombay v. F. A. Abraham, AIR 1962 SC 794; P. C. Wadhwa v. Union of India, AIR 1964 SC 423; and Jagdish Mitter v. Union of India, AIR 1964 SC 449. There is no doubt that the petitioner had no right to the post of Income-tax Officer, Class II because of his officiating appointment to this post. It is equally true that the impugned order does not provide for the forfeiture of his pay or allowances or the loss of his seniority in his substantive rank. The learned counsel for the petitioner strenuously contended that the impugned order has definitely resulted in the stoppage or postponement of the petitioner's future chances of promotion. It is common ground that the petitioner before his reversion had been working as Income-tax Officer. Class II, for almost eleven years and during this period he was allowed to earn his annual increments without any let or hindrance. According to the Government instructions as contained in Memorandum No. F. 44/1/59-Estb. (A), dated 15th April, 1959 (Annexure F) the controlling authority, which in this case was the Commissioner of Income-tax, Punjab, Jammu, Kashmir and Himachal Pradesh, was required to judge the suitability of the petitioner to work as Income-tax Officer, Class II at the most during the first four years of the period of his appointment.
Shri M. Kasivisvanatha Pillai in his demi-official letter, dated 6th February, 1964, to the Secretary, Central Board of Direct Taxes, New Delhi (an office copy of which is on the Departmental file produced by the learned counsel for the respondents) while proposing to revert the open to the post of Inspector of Income-tax after giving him notice sought approval of the Central Board of Direct Taxes of the proposed action against the petitioner and also wanted to know the procedure which he was required to follow in the matter. He was led to this action because of the large number of complaints which the Department had received against the integrity of the Petitioner and the bad reports received by him from his superiors. It will thus be seen that the Commissioner of Income-tax was largely influenced obey the complaints received against the petitioner about his honesty while coming to other conclusion that he was not suitable for the post of Income-tax Officer. Further, he also suggested that before the petitioner is reverted to the post of the Inspector of Income-tax he should be given a notice and also mentioned in his letter that the Chairman of the Departmental Promotions Committee had recommended a similar action. This means that the Commissioner of Income-tax the controlling authority, had in his mind to revert the petitioner to the post of Inspector by way of punishment and so desired to serve him with a notice. Furthermore, the petitioner alleged in his petition that subsequent to his reversion to the post of Inspector. Income-tax, some Inspectors of income-tax junior to him had been promoted as Income-tax Officers.
The learned counsel for the petitioner maintained that the incontrovertible facts elucidated above could lead tone conclusion that the revision of the petitioner to the post of Inspector. Income-tax, was by way of punishment as it resulted in the stoppage or postponement of his future chances of promotion. I am inclined to agree with him. The controlling authority, which in this case was the Commissioner of Income-tax, must have judged the suitability of the petitioner to function as Income-tax Officer, Class II, during the first four years of his tenure of office as Income-tax Officer per Government instructions referred to above. When the petitioner was allowed to work as Income-tax Officer for more than four years it shows that his suitability for the higher post had been adequately determined. The demi-official letter written by the Commissioner of Income-tax to the Secretary, Central Board of Direct Taxes mentions complaints against the integrity of the petitioner which led him to the conclusion that he was no longer suitable to remain as an Income-tax Officer. The contents of this demi-official letter undoubtedly will stand in the way of the petitioner whenever his case for future promotion to the next post is considered. So I find it difficult to agree with the respondents that the petitioner's reduction in rank was, innocuous and not by way of punishment and so in the words of Parshotam Lal Dhingra's case, AIR 1958 SC 36, the provisions of Art. 311 of the Constitution were attracted. The respondents conceded that these provisions had not been complied with while passing the impugned order and that being so the same was wrongful and in violation of the constitutional right of the petitioner.
(5) Lastly I will like to mention here that the petitioner was reverted to the post of Inspector, Income-tax, more obey way of directions from the Central Board of Direct Taxes than by the independent decision of Shri S. R. Mehta, Commissioner of Income-tax. As already pointed out, Sohri M. Kasivisvanatha Pillai, his predecessor, in his demi-official letter to the Secretary, Central Board of Direct Taxes, sought the approval of the Central Board of Direct Taxes for his proposed action against the petitioner. He specifically stated therein that before reverting the petitioner he would like to serve him with a show-cause notice. But the Central Board of Direct Taxes in letter No. 24/3/64-Ad. VI, dated 16th May, 1964, to the Income-tax Commissioner, Punjab, Patiala, while agreeing with the proposal made by the Commissioner of Income-tax directed that the petitioner should be reverted on the ground that he was considered after trial to be unsuitable for such higher service. The Board also observed that there was no need of giving him any notice. This letter is also on the same Departmental file as the demi-official letter of Shri M. Kasivisvanatha Pillai, Shri S. R. Mehta, as the record shows, on receipt of this communication from the Central Board of Direct Taxes, passed the impugned order which shows that it was done in pursuance of the directions received from the Central Board of Direct Taxes and he had not much to do in the matter. This also makes the impugned order improper. Not only that the procedure adopted in the case prejudiced the mind of the Authority which was to deal with the petitioner's appeal against the impugned order, it also leaves one to think that the controlling authority, namely, the Commissioner of Income-tax, failed to apply his mind finally to the matter.
(6) For the reasons given above, the Civil Writ is allowed with costs and the impugned order is quashed.
(7) Petition allowed.