Civil Appeal No 1583 of 1987
From the Judgment and Order dated 2241987 of the Madras High Court in WA No 367 of 1983
G Ramaswamy Additional Solicitor General P Parmeshwaran B Parthasarthy for the Appellants
MN Krishnamani and section Balakrishnan for the Respondents
The Judgment of the Court was delivered by VENKATARAMIAH J
The short question involved in this case is whether Para 620 of the Manual of Railway Pension Rules 1950 hereinafter referred to as the Railway Pension Manual  under which the competent authority is empowered to retire a railway employee before his normal date of retirement is for any reason void ineffective or unconstitutional
The respondent R Narasimhan joined the Southern Railway as a Ticket Collector in the year 1950 and on being promoted at different stages he was working as a Travelling Ticket Examiner on 14th of May 1982 when he was compulsorily retired from service by the competent authority in the Railway Administration in exercise of his powers under Para 22 of the Railway Ministry s Letter dated 871950 incorporated as Para 620 of the Railway Pension Manual
The respondent was born on 2391929 and if the order of retirement had not been passed as stated above he would have continued in service till he completed 58 years of age
Aggrieved by the order of retirement the respondent filed a Writ Petition in the High Court of Madras in Writ Petition No 4079 of 1982 questioning the validity of the said 744 order and also of Para 620 of the Railway Pension Manual which empowered the Railway Administration to retire its employees on their completing 30 years of service
The Writ Petition was contested by the Railway Administration and ultimately it was dismissed by the learned Single Judge of the High Court of Madras
Aggrieved by the judgment of the learned Single Judge the respondent filed an appeal before the Division Bench of the High Court in Writ Appeal No 367 of 1983
The Division Bench held that Para 620 of the Railway Pension Manual whose validity had been impugned in the Writ Appeal was void and ineffective and hence the order of retirement passed by the Railway Administration in exercise of the power conferred by the said para was liable to be set aside
Aggrieved by the judgment of the Division Bench the Union of India and the Railway Administration have filed this appeal by special leave
In order to appreciate the contentions of the parties it is necessary to set out the relevant rules governing the retirement of railway employees
Rule 2046 of the Indian Railway Establishment Code hereinafter referred to as the Rules  deals with compulsory retirement of railway servants
The relevant part of the said rule reads thus 2046 FR 56 a Except as otherwise provided in this rule every railway servant shall retire on the day he attains the age of fifty eight years
        h Notwithstanding anything contained in this rule the appointing authority shall if it is of the opinion that it is in the public interest to do so have the absolute right to retire any railway servant giving him notice of not less than three months in writing or three months  pay and allowances in lieu of such notice i if he is in Class I or Class II service or post and had entered Government Service before attaining the age of thirty five years after he has attained the age of fifty years
ii in any other case after he has attained the age of fifty five years
i Any railway servant may by giving notice of not 745 less than three months in writing to the appointing authority retire from service after he has attained the age of fifty years if he is in Class I or Class II service or post and had entered Government service before attaining the age of thirty five years and in all other cases after he has attained the age of fifty five years
        k Notwithstanding anything contained in clause h the appointing authority shall if it is of the opinion that it is in the public interest to do so have the absolute right to retire a railway servant in Class III service or post who is not governed by any pension rules after he has completed thirty years  service by giving him notice of not less than three months in writing or three months  pay and allowances in lieu of such notice
 Para 620 of the Railway Pension Manual reads thus 620i
A Railway servant may retire from service at any time after completing 30 years  qualifying service provided that he shall give in this behalf a notice in writing to the appropriate authority at least three months before the date on which he wishes to retire
        ii The authority competent to remove the Railway servant from service may also require him to retire any time after he has completed 30 years  qualifying service provided that the authority shall give in this behalf a notice in writing to the Railway servant at least three months before the date on which he is required to retire or three months  pay and allowances in lieu of such notice
 There is no dispute that the respondent is governed by the pension rules as he has exercised his option to be governed by them
His contentions before the Division Bench were i Rule 2046 of the Rules having been framed under the proviso to Article 309 of the Constitution and being a compendious code relating to a retired railway servant that provision alone could be invoked for the purpose of compulsory retirement and not para 620 of the Railway Pension Manual which is in 746 the nature of an executive order ii Since rule 2046h of the Rules opens with a non obstante clause and para 620 of the Railway Pension Manual does not state that the said rule shall prevail notwithstanding any other provision to the contrary rule 2046h of the Rules cannot be made subject to para 620 of the Railway Pension Manual and iii there being two separate provisions with regard to compulsory retirement namely clause h of rule 2046 of the Rules and para 620 of the Railway Pension Manual in the absence of any guidance as to when and which rule could be invoked in a given case both the provisions would be inapplicable and the respondent could not be compulsorily retired
A reading of the relevant part of rule 2046 of the Rules and para 620 of the Railway Pension Manual shows that ordinarily every railway servant has to retire on the date he attains the age of 58 years
Notwithstanding the said rule the appointing authority if it is of the opinion that it is in the public interest to do so has the power to retire any railway servant giving him notice of not less than three months in writing or three months  pay and allowances in lieu of such notice if he is in Class I or Class II service or post and had entered Government service before attaining the age of 35 years after he has attained the age of 50 years and in any other case after he has attained the age of 55 years
Similarly a railway servant may by giving notice of not less than three months in writing to the appointing authority retire from service if he is in Class I or Class II service or post and had entered Government service before attaining the age of 35 years after he has attained the age of fifty years and in all other cases after he has attained the age of 55 years
These two kinds of retirement are dealt with in clauses h and i of rule 2046 of the Rules
The governing factor in clauses h and i of rule 2046 is the age of the employee concerned at the time when it is proposed to retire him from service or when he wishes to retire from service voluntarily as the case may be
This rule applies no doubt to all employees irrespective of the fact whether they are governed by the pension rules or not
Clause k of rule 2046 provides that notwithstanding anything contained in clause h the appointing authority shall if it is of the opinion that it is in the public interest to do so have the absolute right to retire a railway servant in Class III service or post who is not governed by any pension rules after he has completed thirty years  service by giving him notice of not less than three months in writing or three months  pay and allowances in lieu of such notice
Clause 1 of rule 2046 of the Rules provides that a railway servant in Class III service or post who is not governed by any pension rules may by giving notice of not less than three months in writing to the appointing authority retire from service after he has completed thirty years  service
It may be noted that in clauses k and 747 1 of rule 2046 of the Rules the governing factor is not the age of the railway servant concerned but the length of the qualifying service rendered by him
They are applicable only to a railway servant in Class III service who has completed 30 years of service in railway administration
If a railway servant in Class III service has entered the service during his 21st year he can be retired by the Government on his completing 30 years of service in his 51st year or he may elect to retire from service in his 51st year after completing 30 years of service by following the prescribed formalities
Clauses k and I of rule 2046 as already stated above do not apply to railway servants who are governed by pension rules
Para 620 of the Railway Pension Manual which is extracted above contains provisions corresponding to clauses k and I of rule 2046 of the Rules
Under sub para i of para 620 a railway servant governed by the pension rules may retire from service at any time after completing 30 years of qualifying service provided that he has given a notice in writing to the appointing authority three months before the date on which he wishes to retire
Sub para ii of para 620 of the Railway Pension Manual which corresponds to clause k of rule 2046 of the Rules empowers the competent authority to remove a railway servant from service any time after he has completed 30 years of qualifying service provided that the authority has given in this behalf a notice in writing to the railway servant at least three months before the date on which he is required to retire or three months  pay and allowances in lieu of such notice
It may also be noted that while clauses k and 1 of rule 2046 of the Rules apply only to a railway servant in Class III service or post not governed by any pension rules para 620 of the Railway Pension Manual applies to all railway servants governed by the pension rules
The Division Bench of the High Court has held that para 620 of the Railway Pension Manual was ineffective and invalid on the ground that it was unable to see any logic or reason or any guidance for the purpose of invoking either one or other of the provisions  and also has further observed thus In the circumstances therefore particularly in view of the fact that the Railway Establishment Code is intended to govern the service conditions of all the individual railway servants and the Pension Rules are intended only to govern the determination of pension and Rule 2046 itself is in a way of compendious rule relating to retirement at the age of 58 years and compulsory retirement earlier we are of the view that the case is governed by Rule 2046h only and not 748 by Rule 620 of the Pension Rules
This is also for the reason as rightly contended by Mr NC Raghavachari learned counsel for the appellant that while Rule 2046k starts with saying that notwithstanding anything contained in Clause h there is no such non obstante clause in Rule 620 nor clause h of Rule 2046 is made subject to Rule 620
In the circumstances therefore it is open to the railway servant to contend that he is governed by Rule 2046h and not Rule 620
In the absence of any guiding principle specifically it is not open to the Department to exercise an option either to invoke Rule 620 or clause h of Rule 2046
 Having observed thus the Division Bench was of the view that since Rule 2046h of the Rules was not applicable as the respondent had not attained the age of 55 years on the date when he was compulsorily retired he could not have been compulsorily retired
We do not find any inconsistency between rule 2046 of the Rules and para 620 of the Railway Pension Manual
As already stated by us clause h of rule 2046 of the Rules empowers the competent authority to retire compulsorily a railway servant on his attaining the age specified therein
That clause has no reference to the length of service put in by a railway servant concerned
Clause k of rule 2046 of the Rules under which the appointing authority can retire a person in the public interest after a railway servant has completed 30 years of service applies to a railway servant holding a Class III post and who is not governed by pension rules
Para 620 of the Railway Pension Manual applies to all railway servants governed by the pension rules
Railway servants holding Class I or Class II posts who cannot be retired under clause k of rule 2046 of the Rules can be retired on their completing 30 years of qualifying service if they are governed by the pension rules
Similarly railway servants holding Class III posts and who are governed by the pension rules to whom clause k of rule 2046 of the Rules is not applicable can also be retired on their completing 30 years of qualifying service
Thus the area of operation of para 620 of the Railway Pension Manual is different from that of clause h and k of rule 2046 of the Rules
Para 620 of the Railway Pension Manual should be treated as supplementary to rule 2046 of the Rules
The said para which has been framed by the Union Government in exercise of its executive power under Article 73 of the Constitution should be given due effect since there is no statutory provisions or a rule framed under the proviso to Article 309 of the Constitution which is inconsistent with it
749 We therefore overrule the view expressed by the Division Bench of the High Court on the above question and uphold the validity of para 620 of the Railway Pension Manual
Unfortunately the case does not end here
It appears that the respondent had raised some other contentions with regard to the validity of the impugned order of retirement in the petition
But the Division Bench of the High Court has not expressed its opinion on those contentions since it agreed with the first contention urged on behalf of the respondent namely para 620 of the Railway Pension Manual was invalid
We are therefore constrained to send the case back to the Division Bench of the High Court to decide the other questions raised by the respondent
We therefore set aside the judgment passed by the Division Bench of the High Court and remand the case to the Division Bench of the High Court to dispose of the appeal afresh in the light of the submissions to be made by the respondent on the other contentions raised by him
The appeal is accordingly disposed of
There is no order as to costs
PSS Appeal allowed


Summary:
The respondent dealer who runs Roller Flour Mills was supplied wheat by the Food Corporation of India and Regional Food Controller for the manufacture of Atta Maida Suji etc
The sale price of the wheat products was fixed by the State Government under the UP Roller Flour Mills Ex Mill Price Control Order 1975
The notification issued under the Control Order also authorised the mills to realise in addition to the fixed ex mill price the proportionate amount of octrol terminal tax purchase tax or sales tax etc
payable by the mills on the wheat crushed
Accordingly the respondent realised this amount
The respondent further realised the proportionate amount of the wheat purchase tax and wheat sales tax and octroi as consideration of the sale price in addition to the sale price fixed by the State Government
For this excess realisation the Assistant Commissioner Assessment imposed a penalty under section 15 A1qq of the UP Sales Tax Act 1948 treating it as realisation of tax in excess of tax payable
The respondent s appeals before the Deputy Commissioner Appeals and the Tribunal failed
The High Court however allowed the revision
Dismissing the appeal it was  HELD 1 Penalty under the Sales Tax Act is leviable for excess realisation of tax
Therefore realisation of the amount should be as tax and not in any other manner
753G 2 The excess amount charged was in contravention of the provisions of the Control Order
But that alone was not sufficient for initiation or levy of penalty under sub clause qq of section 15 A 1 of the 751 Act
The excess amount has to be realised as sales or purchase tax and the tax so charged must have been in excess of tax payable
754A B 3 Realisation of excess amount is not impermissible but what is not permissible is realisation of excess amount as tax
754E 4 The imposition of a penalty under the Act is quasi criminal and unless strictly proved the assessee is not liable for the same
If the purchaser realises more money that by itself will not attract the penal provisions
754F G