ON Civil Appeal No 4297 of 1983
From the Judgment and Order dated 26101979 of the Allahabad High Court in CMW No 7168 of 1972
Raja Ram Agarwal and AK Srivastava for the Appellants
KK Venugopal Rajinder Sachher Satish Chandra KC Dua and JP Misra for the Respondents
The Judgment of the Court was delivered by KN SAIKIA J
The State of UP by special leave appeals from the Judgment of the High Court of Allahabad dated 26101979 allowing the respondents  writ petition and holding that the State of UP and the Excise authori ties were not entitled to levy excise duty on the wastage of liquor in transit
The respondents are manufacturers of high strength spirit classified as other sorts of spirit not otherwise specified  under Section 28 of the United Prov inces Excise Act 19 10 hereinafter referred to as the Act 
After manufacture they transport those spirit in big containers from the distilleries to their warehouses trans porting them on passes issued under section 16 of the Act
In the bonded warehouses the same are sometimes diluted separately bottled and sold
They also used to manufacture and bottle military rum under a licence and supply the same to the defence personnel inside and outside the State of UP
The Officer Commanding Rail Head Depot ASC Pathan kot having obtained permits from the State of Punjab for the import of military rum against those permits the respond ents exported military rum from their distillery under different passes
The excise duty on military rum for export was Rs7 per LP Litre while the rate for consumption within the State was 171 Rs21 per LP Litre
If the exported military rum was under bond thereupon duty was realised by the importing State from the importer thereof
The respondents bottled the rum ac cording to rules and supplied the same to the consignees at the distillery premises and the consignments were taken by the consignees under the seal of the railway authorities to their respective destinations
It appears by Notification dated March 26 1979 in exercise of the powers under Sections 28 and 29 of the Act read with section 21 of the UP General Clauses Act 1904 and in supersession of the earlier Government Notification the Governor was pleased to direct that with effect from April 1 1979 duty shall be imposed on country spirit at the rates specified in the schedule thereto and the duty was payable before the issue from the distillery or bonded warehouse concerned save in the case of issued under bond
By order dated 13101970 notice was issued to the respond ents demanding Rs429555p
on the wastage which was termed as excess transit wastage of rum calculated at the maximum rate of Rs21 per LP Litre
A representation of the re spondents dated November 9 1970 was rejected by order dated 1511972
Another representation through the All India Distillers Association was also rejected by order dated August 28 1972
Several writ petitions challenging similar orders were filed by others before the Allahabad High Court for quashing the orders
The respondents also filed Civil Miscellaneous Writ No 7168 of 1972 under Article 226 of the constitution of India praying for appropriate writ order or direction quashing the impugned orders dated 13101970 9111970 1511972 and 2881972 and for a mandamus commanding the State of UP not to realise or adjust any amount of duty towards wastage from the respondents  advance duty account otherwise than in accordance with law and restraining them from giving effect to the impugned orders
The High Court by the impugned judgment dated 26101979 relying on an earlier Division Bench decision of the same High Court in Ms Mohan Meakin Breweries Ltd and Anr
vs State of Uttar Pradesh and Ors
 Writ Petition No 2604 of 1973 decided on 1191979 allowed the writ petition and quashed the impugned orders thereby holding that no excise duty could legally be levied on the excess wastage the occurred during the transport of liquor in course of export that is taking out of UP otherwise than across a customs frontier as defined by the Central Government
Mr Raja Ram Agarwal the learned counsel for the appel lants submits that the duty has been levied keeping in mind the fact that in 172 UP excise duty is levied at two different rates at a higher rate when the liquor is sold inside the State and at a lower rate when it is exported outside the State
Counter vailing duty is paid by the importer on the quantity actual ly received in the importing State
If there is excess wastage on transit the result is that the quantity actually received by the destination State is less than the quantity on which the State of U P charged the lower rate and therefore on the quantity shown as wastage the State of UP ought to recoup its differential duty by charging excise duty at the higher rate and that this is clearly envisaged by the Act and the United Provinces Excise Manual Rules hereinafter referred to as the Rules 
Counsel further submits that it has a wholesome purpose namely to discourage evasion of duty and that there is no question of levying excise duty twice on the same article inasmuch as the amount of export duty actually paid is always deducted from the demand and that it is a duty of regulatory charac ter meant to guard against perpetration of fraud or decep tion on excise revenue which the State is entitled to re ceive
It is said to be a realisation of escaped duty justi fied by the implied presumption
Mr KK Venugopal the learned counsel for the respond ents submits that in this case while the exporting State that is UP levied export duty at a concessional rate the importing State levied countervailing duty on the quantity of rum imported and the quantity exported and subjected to excise duty by the exporting State being the same as the quantity whereupon countervailing duty was imposed by the importing State there could be no question of collecting differential duty on the excess wastage by the exporting State and if that was done it would amount to double taxa tion
Explaining the procedure for export from UP counsel states that after export duty is paid the exporter gets the alcohol released and transport it to the importing States in bottles or casks
In the importing State countervailing duty is paid on full consignment at its destination and the seals of the bottles transported are intact
So the entire con signment is taxed less the wastage
The impugned demand notices have submits counsel rightly been quashed by the High Court and the appellants have rightly been restrained from levying such differential duty on excess wastage on transit in course of export
The only question to be decided therefore is whether the differential duty is leviable under the Act and the Rules
For answering the question we may refer to the Act and the Rules
Included in Chapter V of the Act which deals with duties and fees Section 28 of the Act provides that an excise duty or a countervailing duty as the 173 case may be at such rate or rates as the State Government shall direct may be imposed either generally or for any specified local area on any excisable article stated in that section
Excise duty and countervailing duty as defined in Section 33a of the Act means any such excise duty or countervailing duty as the case may be as is mentioned in entry 51 of List II in the Seventh Schedule to the Constitu tion
That entry reads as follows 51
Duties of excise on the following goods manufactured or produced in the State and countervailing duties at the same or lower rates on similar goods manufactured or produced elsewhere in India a alcoholic liquors for human consumption b opium Indian hemp and other narcotic drugs and narcot ics but not including medicinal and toilet preparations containing alcohol or any substance included in subparagraph b of this entry
 The original Section 28 of the Act now re numbered as subsection 1 thereof and sub sections 2 and 3 inserted by section 2 of the UP Act 7 of 1970 clearly covers Indian made foreign liquors
There could be no dispute as to mili tary rum being one of the Indian made foreign liquors ex cisable under the Act
A duty of excise under Section 28 is primarily levied upon a manufacturer or producer in respect of the excisable commodity manufactured or produced irre spective of its sale
Firstly it is a duty upon excisable goods not upon sale or proceeds of sale of the goods
It is related to production or manufacture of excisable goods
The taxable event is the production or manufacture of the liq uor
Secondly as was held in AB Abdulkadir vs The State of Kerala
reported in   an excise duty imposed on the manufacture and produc tion of excisable goods does not cease to be so merely because the duty is levied at a stage subsequent to manufac ture or production
That was a case on Central Excise but the principle is equally applicable here
It does not cease to be excise duty because it is collected at the stage of issue of the liquor out of the distillery or at the subse quent stage of declaration of excess wastage
Legislative competence under entry 51 of list II on levy of excise duty relates only to goods manufactured or produced in the State as was held in Bimal Chandra Banerjee vs State of Madhya Pradesh  In the instant case there is no 174 dispute that the military rum exported was produced in the State of UP
In State of Mysore  Ors
vs Ms D Cawasji  Co 10 which was on Mysore Excise Act it was held that the excise duty must be closely related to production or manufacture of excisable goods and it did not matter if the levy was made not at the moment of production or manufacture but at a later stage and even if it was collected from retailer
The differential duty in the in stant case therefore did not cease to be an excise duty even it was levied on the exporter after declaration of excess wastage
The taxable event was still the production or manufacture
It is settled law as was held in Bimal Chandra Banerjee vs State of Madhya Pradesh supra a case under the Madhya Pradesh Excise Act that no tax can be levied by the State Government in the absence of specific authorisation by statute
In that case the levy of duty on liquor which the contractor failed to lift was held to have been an attempt to exercise a power which the State Government did not possess
Mr Agarwal refers us to Rule 636 of the Rules which at the relevant time said 636
A distiller holding licences for bottling Indianmade foreign liquor of his own manufacture and for selling it by wholesale may export such foreign liquor bottled on his wholesale premises to any other State or Union Territory in India subject to the following condi tions 1 The exporter shall obtain from the importer a permit authorizing the import signed by the Chief Revenue Authority of the importing State or Union Territory or by an officer duly authorized in this behalf
2 The permit shall specify a the name and address of the person of firm authorized to import b the description and quantity of the foreign liquor to be imported c the rate of duty chargeable in the importing State or Union Territory in case the Indian made foreign 175 liquor is imported in State or Union territory with which the state of Uttar Pradesh has entered into reciprocal arrangements for the adjustment of the excise duty by book transfer
d the rate of duty charged in the importing State or Union Territory and the fact that it has been realized in advance in cases of import other than those covered by clause c
3 On receipt of the permit the exporter shall deposit into the treasury a Export duty on the total quantity of liquor to be ex ported and b Where the export is made to a State or Union Territory with which the State of Uttar Pradesh has entered into a reciprocal arrangement for the adjustment of the excise duty by book transfer and the rate higher than that enforced in the State of Uttar Pradesh and that payable in the importing State or Union Territory on the total quantity of liquor to be exported
4 On receipt of the permit and the treasury receipt the wholesale vendor shall prepare a pass in form FL 23 in quadruplicate and submit it to the Excise Inspector in charge of the distillery
The Excise Inspector shall after satisfying himself that duty has been correctly realized affix his signature to the pass
The exporter shall then send one copy of the pass to the Collector of the district of export one copy to the Chief Revenue Authority of the place of import or such other officer as may be authorised in this behalf
One copy to the consignee and shall retain the fourth copy
The treasury receipt shall always accompany the copy of the pass sent to the Collector of the exporting districts
5 The pass in form FL 23 shall state clearly a the name and address of the consignor 176 b the name and address of the consignee c the exact description and quantity of each kind of foreign liquor despatched under the pass d the route by which it is despatched e the date of despatch and f in case of export against duty paid permit the fact that the duty has been prepaid in the State of import
6 A separate pass in form FL 23 shall be issued in respect of each consignment
The Chief Revenue Authority or other officer of the place of import should send the copy of the pass received by him duly countersigned to the Excise Commissioner Uttar Pradesh in support of the claim for  refund of duty annually after the close of the excise year
7 Should the rate of duty in the importing State be lower than that in force in Uttar Pradesh exporter shall be entitled to a refund of the difference in duty
If the duty has been prepaid in the State of import at the rate in force at the time of issuing import permit the exporter shall be entitled to a refund of duty deposited by him in the State of export on verification of the claim by the Excise Inspector incharge of the distillery on the basis of export passes in form FL 23 duly countersigned by the Chief Revenue Authority of the State or Union Territory of import or the officer appointed in this behalf in token of receipt of the consignment of Indian made foreign liquor Rule 637 provided than the duty other that export duty on foreign liquor manufactured at any distillery in Uttar Pradesh and exported therefrom on prepayment of duty to any State or Union Territory of India shall be credited by book transfer to the Government of the importing State or Union Territory after the close of the excise year
Rule 637 A provided for registration of claims for refund or export of Indian made foreign liquor and provided that every distiller making exports of Indian made foreign liquor to other States shall submit a statement showing all such exports made during the proceeding quarter in form PD 31 to the Excise Commissioner duly 177 verified by the officer incharge distillery despatching simultaneously a copy thereof to the Assistant Excise Com missioner of the charge
Rule 37 B provided for maintenance of register of refunds against exports of Indian made for eign liquor and said that the Excise Inspector incharge of the distillery shall enter all the details given by the distillers in the statement in form PD 31 in a register to be maintained by him in form PD 31 A As and when refunds are allowed by the Excise Commissioner he shall make entries about refund in this register in relevant columns under his signature
Similar entries shall also be made by the office of the Assistant Excise Commissioner concerned on the copies of PD 31 statement received from the exporters and be initialled by the Assistant Excise Commissioner after verification
Thus it is seen that though not specifically mentioning charging up of differential export duty on excess wastage the above rules definitely envisaged refund of excise duty of countervailing or equalising nature
Mr Agarwal also brings to our notice Rale 8 14 which substituted the old Rule by the Excise Commissioner s Noti fication No 10909IX
241 A dated February 8 1978
It provided as under Allowance for loss in transit
An allowance upto 05 per cent will be made for the actual loss in transit by leakage evaporation or other unavoidable cause or spirit transport ed or exported under bond in wooden casks or metal vessels
The allowance to be made under this rule will be determined by deducting from the quantity of spirit despatched from the distillery the quantity received at the place of destina tion both quantities being stated in terms of alcohol
The allowance will be calculated on the quantity contained in each wooden cask metal vessels comprised in a consignment
If the report of the officer by whom the consign ment of spirit has been gauged and proved at its destination shows that the wastage has occurred above the limit allowa ble the person executing the bond shall be liable to pay duty on so much of the deficiency as in excess of the allow ance
The rate of duty leviable shall be the highest rate of duty leviable on such spirit in this State
178 When the wastage does not exceed the prescribed limit no action need be taken by the Officer in charge of the Distillery or bonded warehouse as the case may be but when the wastage exceeds the allowable limit the Officer in charge of the Distillery shall obtain the expla nation of the Distillers or the person executing the bond and forward the same together with a full report of the circumstances to the Assistant Excise Commissioner or the Deputy Excise Commissioner of the charge in which the Dis tillery is situated
The Assistant Excise Commissioner or the Deputy Excise Commissioner shall charge duty on excess wastage provided that when the total wastage in a consign ment is within the allowable limit
DeputyAssistant Excise Commissioner of the charge may write off the excess wastage in any particular wooden cask or metal vessel Provided further that the Deputy Excise Commis sioner may write off the duty upto Rs500 if he is satis fied that the excess wastage in a consignment was on account of an accident or other unavoidable cause but in other cases the matter shall be referred to the Excise Commis sioner for orders
Cases in which the Deputy Excise Commis sioner writes off duty shall be reported by him to the Excise Commissioner
 It is emphasised by Mr Agarwal that this provision is meant to discourage evasion of duty
If any part of the lower export duty charged liquor is not in fact exported it should be made to pay the higher excise duty as payable on home consumed liquor
It does not impose any new duty
We are inclined to agree
This rule does not authorise imposition of any new tax but only authorises charging up excise duty on the excess wastage of liquor in course of export which was charged at concessional rate
The old Rule 814 of the Rules was made by BO No 423V 284 B dated September 6 1910 and No 208 V E 980B dated May 28 1918 providing for allowance for Joss in transit
It said An allowance will be made for the actual loss in transit by leakage evaporation or other unavoidable cause of spirit transported or exported under bond
The allowance is subject to the following maximum limits
 Limits were prescribed differently for wooden casks and metal vessels keeping in mind the duration of transport
179 Thus we find that the minimum limits of wastage in transit was prescribed even under the old rule
This by implication enjoined that the excess wastage would be taxed as if not wasted
The question may arise as to the date of the new Rule 814 to decide whether the impugned notices would be covered by it or by the old Rule
Section 77 of the Act provides the answer
It says 77
Publication of rules and notifications
All rules made and notifications issued under the Act shall be published in the Official Gazette and shall have effect as if enacted in this Act from the date of such publication or from such other date as may be specified in that behalf The two provisos are not relevant for the purpose of this case Both the old and the new Rule 8 14 must therefore have effect from the date of publication in the Official gazette or from such other date as may be specified in that behalf as if enacted in the Act
The object of this ancient formu la namely as if enacted in this Act was to emphasise the fact that the notifications were to be as effective as the Act itself
Its validity could be questioned in the same way as the validity of the Act could be questioned
It is an ancient form of rule making still to be found in the Act
Thus the Act having provided for fixed wastage allowance also in effect provided that the excess above the allowable wastage will be taxed
It can not therefore be said that no such charging up of excise duty on the excess wastage in transit could be validly made
The validity of Rule 814 had not been questioned before the High Court
Absolute equality and justice is not attainable in taxing laws
Legislature must be left to decide the State policy within Constitution al limitations
In Ms Mohan Meakin Breweries Ltd vs Excise  Taxation Commissioner Chandigarh reported in 10  1 the appellant company carried on the busi ness of manufacture storage and sale of liquors
Between June 1967 and April 1969
it transported various quanti ties of liquor from its distilleries in UP to its bonded warehouse at Chandigarh
On arrival the consignments were examined by the Officer in Charge of the warehouse and a shortage was found exceeding the wastage allowance permis sible under rule 8 of the Punjab Bonded Warehouse Rules 1957
The Excise and Taxation Commissioner exercising the powers of the 
Financial Commissioner issued a show cause notice and then ordered 180 the appellant to pay duty on the wastage in excess
The show cause notice required the appellant to pay duty on excess wastage in course of import of liquor from UP and the rules governing the appellant s licence provided for a wastage allowance not exceeding 1 of the actual loss in transit by leakage or breakage of vessels or bottles con taining liquor and if the wastage exceeded the prescribed limit the licensee should be liable to pay duty at the prescribed rate as if the wastage in excess of the pre scribed limit had actually been removed from the Warehouse and it was also provided that the Financial Commissioner could in his discretion on goods cause being shown remit the whole or a part of the duty leviable on such wastage and these provisions were challenged
This Court held that the impugned rules did not impose any new duty or create any liability and that they were in essence and substance of a regulatory character meant to guard against perpetration of fraud or deception on the revenue
They provide for and regulate the storage and subsequently the removal of liquor from the bonded warehouse on payment or otherwise of the duty which is chargeable under the Fiscal Rules of 1937
 We agree with Mr Agarwal that the instant Rules 636 and 814 are also a regulatory character and they are precautionary against perpetration of fraud on the excise revenue of the exporting State
If out of the quantity of military rum in a consignment a part or portion is claimed to have been wastage in transit and to that extent did not result in export the State would in the absence of reasonable expla nation have reason to presume that the same have been disposed of otherwise than by export and impose on it the differential excise duty
A statute has to be construed in light of the mischief it was designed to remedy
There is no dispute that excise duty is a single point duty and may be levied at one of the points mentioned in Section 28
The submission of the respondents that they paid duty on the entire quantity of rum to be exported under excise passes issued to the importer and that after payment of the export duty the rum bottled under the conditions enumerated in the Rules was supplied to the consignee at the distillery premises and the consignments were taken by the consignees under their seals and under the seal of the Railway authori ties and the consignments reached their destination with seals intact would not go to support the contention that the State Government was not competent to levy any duty on the excess wastage that is shown to have occurred during transit inasmuch as only a concessional rate of duty was levied on the liquor which was supposed to be exported out side the State of UP and if the entire quantity on which such concessional duty was paid did not reach its destination and the 181 shortage is shown as wastage in transit it surely meant that the short delivery was not exported
The reason of the wastage would not be material so far as this conclusion is concerned
Had this quantity been not exported but consumed locally the State would have derived higher duty of which it has been deprived
The argument that countervailing duty is paid by the importers in the importing State on the quantity actually received would also be immaterial for this conclusion though that may be of some importance for the purpose of revenue of the importing State as well as the consignee
In case countervailing duty has been paid on the entire quanti ty of the consignment in the importing State there may be room for adjustment in accordance with the provisions of Rules 636 637 637 A and 637 B of the Rules
The only material question may be whether the wastages was caused while the bottles were on transit but still within the territory of the exporting State or in transit inside the importing State
If as a matter of fact it is found that the exported liquor actually crossed the territory of the ex porting State intact there may not be any justification for demanding differential duty
That will of course be a ques tion of fact in no way affecting the right to demand the differential duty
The decision in Ms Ajudhia Distillery Rajaka Sahaspur vs State of Uttar Pradesh and Anr report ed in 1980 Taxation Law Reports 2262 quashing such a demand and holding that the exporting State had no jurisdiction to charge duty on the liquor wastage in transit cannot be said to have been correctly decided and the impugned judgment in the instant case suffers from the same infirmity and has to be set aside
Rule 814 envisages the levy of such differen tial duty
There is no question of double charging or multi ple point charging in this case
It is only a question of recovery of the difference on proof of the purposes for which lower duty was earlier levied having failed to be achieved entailing liability to make good the difference
The Rules 636 637 A and 637 are also relevant to this extent
It was reiterated in Ms Mc Dowell and Co Ltd vs Commercial Tax Officer VH Circle Hyderabad  14   following Abdul Kadir supra that excise duty is a duty on the production or manufacture of goods produced or manufactured within the country though laws are to be found which impose a duty of excise at stages subsequent to the manufacture or production
Similarly what was stated in Kalyani Stores vs The State of Orissa and Ors   was reiterated in Ms Mohan Meakin Breweries Ltd supra that a countervailing duty is meant to counter balance to avail 182 against with equal force or virtue to compensate for some thing or serve as equivalent or substitute for
A counter vailing duty is meant to equalise the burden on alcoholic liquors manufactured or produced in the State
 They may be imposed at the same rate as excise duty or at a lower rate so as to equalise the burden after taking into account the cost of transport from the place of manufacturing to the taxing State
Countervailing duties are meant to equalise burden on alcoholic liquors imported from outside the State and the burden placed by excise duties on alcoholic liquors manufactured or produced in the State
Countervailing duties can only be levied if similar goods are actually produced or manufactured in the State on which excise duties are being levied
Thus countervailing duty paid in the importing State does not ipso facto affect the excise revenue of the exporting State
The fact that the importer is required to pay counter vailing duty on the imported military rum could therefore ipso facto be no ground for opposing the levy of differen tial duty on the excess wastage of exported rum that duty being levied with a view to safeguard the excise revenue of the exporting State
If the excess wastage was actually lost to consumers while in the importing State no justification of such a duty may arise that however would be an entire ly different question without in any way affecting the competence of the legislature of the exporting State to impose such a duty
The fact that the exported rum was on payment of export duty or on bond would not again be materi al inasmuch as when the rum meant for export failed to be exported there may be a presumption may be rebuttable one that what is shown as the excess has merged in mass of rum consumed within the State and was not separated from such a mass
The imposition of differential duty was only deferred to this moment and it still continued to be a duty on pro duction or manufacture of rum
It could not be regarded as a duty not connected with the taxable event of manufacture or production
There is also no similarity with the excise duty sought to be levied only on the unlifted quantity of liquor by contractors which was held to be impermissible under Sec tions 28 and 29 of the Act in Excise Commissioner UP vs Ram Kumar and State of Madhya Pradesh vs Firm Gappulal  In the instant case the military rum was obtained for the purpose of export and the lower export duty was paid and only when the rum did not result in export the question of imposing the differential duty arose
The notion of the excise duty being changed or cancelled on account of what transpires later is not foreign to excise law
Generally speaking 183 the imposing of the differential duty ie charging up the duty on the report of the excess wastage is the opposite of the system of drawback prevalent in some systems
Drawback means the repayment of duties or taxes previously charged on commodities from which they are relieved on exportation
For example in the customs laws of some countries an allow ance is made by the Government upon the duties due on im ported merchandise when the importer instead of selling it within the country re exports it and then the difference of duty is refunded if already paid
Similarly in England there is a provision of refund of duties on British wine when the wine incidentally is spoilt or otherwise unfit for use or when delivered to another person has been returned to the maker as so spoilt or unfit
The system of charging up the duty on the subsequent event of non export can not therefore be said to be irrespective of production or manufacture
In the instant case if it is proved to the satisfaction of the appropriate authorities that countervailing duty had been paid on the entire consignment irrespective of the wastage then the question would arise as to whether the wastage could be ignored altogether by the exporting State as was done by the importing State
Counsel for the parties had no objection to the idea that if the explanation for wastage was satisfactory and the countervailing duty was paid in the importing State on the entire consignment irre spective of the wastage there would be room for adjustment by reducing the duty to similar extent
For the foregoing reasons the impugned Judgment is set aside and the appeal is allowed but under the facts and circumstances of the case without any order as to costs
Y Lal Appeal allowed


Summary:
The petitioner was appointed as Excise Sub Inspector in February 1964 in the State of UP and was later promoted as Excise Inspector on ad hoc basis on February 24 1972
He was confirmed as Excise Sub Inspector wef April 1 1967
Though promoted on ad hoc basis the petitioner has continuously been working as Excise Inspector since February 24 1972
Raghubir Singh and Ram Dhan respondents are direct recruits to the post of Excise Inspector and they had joined the cadre later in point of time than the petitioner ie after 2421972
They were promoted to the post of Excise Superintendent on 2991983 and the petitioner was ignored
Being aggrieved the petitioner has filed this petition under Article 32 of the Constitution
According to the State and other respondents the petitioner s promotion to the post of Excise Inspector being on ad hoc basis was against the 1967 rules he continues to be an ad hoc appointed and as such is not a member of the Excise Inspectors service constituted under the rules
His name has not been shown in the seniority list of Excise Inspectors
According to them his case has rightly not been considered for further promotion
On the other hand it is contended on behalf of the petitioner that the 1967 Rules in as much as they confine the channel of promotion to Tari Inspectors and Clerks were wholly arbitrary and as such violative of Articles 14 and 16 of the Constitution
It is submitted on his behalf that the petitioner is in any case entitled to be promoted substantively to the cadre of excise Inspectors under 1983 rules and he is also entitled to fixation of seniority by counting his entire service as Excise Inspector from 1972 onwards
Respondents concede that the petitioner can be appointed under 1983 rules but contend that he is not entitled to the benefit of past service for purposes of seniority
885 Allowing the writ petition this Court HELD When the 1967 rules were enforced on May 24 1967 there was in existence a permanent cadre of Excise Sub Inspectors
The nature of duties of both the cadres were similar
The Excise Inspectors on molasses duty of the ranges used to supervise the work of excise Sub Inspectors under them
The Excise Sub Inspectors were thus natural contenders for the post of Inspectors
There was no justification whatsoever with the framers of the 1967 rules to have kept the Excise Sub Inspectors out of the channel of promotion to the post of Excise Inspectors
Prime facie there is no escape from the conclusion that the Excise Sub Inspectors were dealt with in an arbitrary manner by the framers of 1967 rules
890H 891B It is not disputed that under the 1983 rules the petitioner is eligible to be promoted and appointed as Excise Inspector
891C D The 1983 rules came into force on March 24 1983
There is nothing on the record to show as to why the petitioner was not considered for promotion under the 1983 rules till today
Inaction on the part of the State Government is wholly unjustified
The petitioner has been made to suffer for no fault of his
He has been serving the State Government as Excise Inspector since February 24 1972 satisfactorily
891E Rule 21i of the 1983 rules specifically permits substantive appointment to the cadre of Excise Inspectors with back date
In all probability the provision of back date appointment was made in the 1983 rules to do justice to persons like the petitioner
The petitioner is eligible under the rules to be appointed as Excise Inspector by way of promotion
Accordingly the Court directed that the petitioner shall be deemed to be appointed by way of promotion as substantive Excise Inspector under the 1983 rules with effect from February 24 1972
The petitioner shall be entitled to the benefit of his entire period of service as Excise Inspector from February 24 1972 towards fixation of his seniority in the cadre of Excise Inspector
The petitioner shall be considered for promotion to the post of Excise Superintendent from a date earlier than the date when respondents Ram Dhan and Raghubir Singh were promoted to the said post
The petitioner shall also be entitled to be considered to the post of Assistant Excise Commissioner in accordance with the rules from a date earlier than the date when any of his juniors were promoted to the said post
891G 892B E None of the respondents who have already been promoted to the 886 higher rank of Excise Superintendents or Assistant Excise Commissioners be reverted to accommodate the petitioner or any other person similarly situated
The State Government shall create additional posts in the cadre of Excise Superintendents and Assistant Excise Commissioners to accommodate the petitioner and other similar persons if necessary
892F Masood Akhtar Khan  Ors
vs State of Madhya Pradesh  Direct recruits Class II Engineering Officers Association vs State of Maharashtra  Ors   P Mahendran  Ors etc
vs State of Karnataka Singh  Ors
   Krishena Kumar  Ors
vs Union of India  Ors
   AK Bhatnagar  Ors
vs Union of India  Ors
   Baleshwar Dass  Ors etc
vs State of UP  Ors
 1981 1 SCC 449 Narender Chadha  Ors
vs Union of India  Ors
  and Kumari Shrilekha Vidyarthi etc
vs State of UP  Ors
  referred to