Civil Appeal No 2315 of 1981
From the Judgment and order dated 1651980 of the Patna High Court in Writ Jurisdiction Case No 1430 of 1979
SR Srivastava for the Appellant
D Goburdhan and A Sharan for the Respondents
The Judgment of the Court was delivered by SEN J
This appeal by special leave is against the judgment and order of the Patna High Court dated 16th May 1980 allowing the writ petition filed by respondent No 4 Dr Kameshwar Prasad and quashing the impugned advertisement No 1211978 issued by the Bihar Public Service Commission inviting applications for the post of Deputy Director Homeopathic in the Directorate of Indigenous Medicines Health Department State of Bihar from scheduled caste candidates and the consequent order of the State Government dated 30th May 1979 for the appointment of the appellant Dr Chakradhar Paswan to that post
A few essential facts would elucidate the nature of the controversy
Prior to 1974 the Directorate of Indigenous Systems of Medicines was a part of the Health Department
On 14th March 1974 the State Government appointed Dr Nagesh Dwivedi Manager State Ayurvedic and Unani Medical Pharmacy Bihar on an ad hoc basis to the post of Director Indigenous Medicines
He assumed charge on the next day and was confirmed in that post on 11th December 1976
The State Government on 6th May 1978 directed the creation of a separate Directorate of Indigenous Medicines the Director being from one of the systems of medicines consisting of Ayurvedic Unani and Homeopathic
At the time of creation of the separate Directorate 134 the Government sanctioned the posts of two Deputy Directors for each of the two remaining systems
The State Government had in the meanwhile on the basis of the decision of this Court in MR Balaji  Ors
vs State of Mysore  1963 Suppl
1 SCR 439 by its circular dated 8th November 1975 prescribed a 50 point roster to implement the policy of reservation to posts and appointments for members of the backward classes under article 164
It was laid down that if in any grade there is only one vacancy for the first time then it will be deemed to be unreserved and for the second time also if there be only one vacancy then it will be deemed to be reserved 
Acting upon the roster the Joint Secretary to the Government General Administration Department Personal made a proposal on 13th June 1978 for reservation of the post of Deputy Director Homeopathic for members of the scheduled castes
He said that in the Directorate of Indigenous Medicines three posts had been sanctioned 1 Director of Indigenous Medicines 2 Deputy Director Homeopathic and 3 Deputy Director Unani
All these posts were Class I posts
He suggested that according to the roster of appointments out of these three posts the first namely that of Director which had been filled by Dr Nagesh Dwivedi be treated as unreserved the second should be treated as a reserved for a scheduled caste candidates and the third should be unreserved
According to him all the posts could be grouped together from the view point of reservation
After the qualifications had been prescribed in consultation with Dr Jugal Kishore Advisor to the Government the Health Minister passed an order on 28th July 1978 for the reservation of the post of Deputy Director Homeopathic for a scheduled caste candidate
The Public Service Commission on being moved by the Government issued the impugned advertisement inviting applications from members of the scheduled castes and the appellant was selected for appointment to the post
Apprehending that the Government would appoint the appellant to the post respondent No 4 moved the High Court by a petition under article 226 of the Constitution for the grant of an appropriate writ direction or order
The Government however by order dated 30th May 1979 appointed the appellant to the post of Deputy Director Homeopathic and he assumed charge to that post and was later confirmed in the post
Although the appointment of the appellant has been declared to be invalid by the High Court he is continuing to hold the post by virtue of the interim stay granted by this Court on 26th June 1980
It appears that steps were thereafter taken to fill up the post of Deputy Director Unani and Dr Mohammad Kamruzzama Kamar Pradhyapak Government Tibbia College Patna was promoted and 135 appointed to that post and he is working on regular basis
On 5th October 1982 the Government sanctioned the additional post of Deputy Director Ayurvedic and this post was filled up by promotion of Dr Smt Uma Sinha who is holding additional charge of the post in addition to the charge of her own post as Pradhyapak Government Ayurvedic College Patna
Thus in the Directorate of Indigenous Medicines for the present there are four posts all being Class I posts
Out of these the post of Deputy Director Homeopathic is held by the appellant who belongs to a scheduled caste and the remaining three posts including the post of Director are held by members belonging to the general category Lalit Mohan Sharma J speaking for a Division Bench held that 1 Reservation to the only post of Deputy Director Homeopathic for members belonging to the scheduled castes is tantamount to 100 reservation
2 The two posts of Deputy Director Homeopathic and Deputy Director Ayurvedic cannot be linked together for purposes of reservation of posts
And 3 The order reserving the post of Deputy Director Homeopathic infringes the principle embodied in the Government circular introducing 50 point roster according to which if in a particular cadre a single post falls vacant it should in the case of first vacancy be considered as general and on the second occasion when a single post again falls vacant the same must be treated as reserved
The learned Judge also said that it has been laid down that if in a particular cadre there is only one post then in case when it is being filled up for the second time it will be considered reserved that is on the first occasion it must be treated as a general seat
In substance the High Court was of the view that the posts of Director and three Deputy Directors could not be clubbed together for reservation of posts and appointments
Nor could the posts of Deputy Directors of Homeopathic Ayurvedic and Unani which form distinct and separate systems of medicines be grouped for purposes of reservation
The main contention of Dr YS Chitale learned counsel for the appellant is that there are four posts in the Directorate of Indigenous Medicines and all the posts are Class I posts and therefore according to the 50 point roster the post of Director having been treated as unreserved by the rotational system the post of Deputy Director Homeopathic was rightly reserved for a scheduled caste candidate
According to him the High Court fell into an error in assuming that the reservation of the post of Deputy Director Homeopathic for a scheduled caste candidate under article 164 amounted to 100 reser 136 vation and suffered from the vice of offending against the equality clause under article 161 read with article 14 of the Constitution
In answer to the argument Shri LN Sinha learned counsel appearing for respondent No 4 submits that firstly the posts of Director and Deputy Directors are not carried in the same cadre and therefore they could not be grouped for purposes of implementing the policy of reservation under article 164 and secondly the three systems of indigenous medicines namely Homeopathic Ayurvedic and Unani are distinct and separate systems of medicines and thus the 50 point roster could not be applied
As we had doubt and difficulty as to whether the posts of Director and Deputy Directors were Posts belonging to the same cadre we called upon the parties to file further and better affidavits to elucidate the point
The State Government has now placed on record the additional affidavit of the Law officer in the Health Department State of Bihar dated 10th November 1987
The affidavit discloses certain facts namely 1 The pay scale of Director of Indigenous Medicines is different from that of the Deputy Directors
2 The posts of the Deputy Director Homeopathic Deputy Director Ayurvedic and Deputy Director Unani are carried in the pay scale of Rs1900 75 2500
3 Although the pay scale of all the three Deputy Directors is identical the posts are filled by doctors belonging to different branches of indigenous medicines namely Homeopathic Ayurvedic and Unani
4 The post of Director is the highest post in the Directorate of Indigenous Medicines and the said post is in the higher pay scale of Rs2225 75 2675
5 Though the posts of Director and Deputy Directors in the Directorate do not belong to unified grade but for the purpose of determining the quantum of reservation the three posts ie that of the Director Deputy Director Homeopathic and Deputy Director Unani were grouped together as all of them were Class I posts
6 The newly created post of Deputy Director Ayurvedic which at present is vacant is being filled up by following the principle of 50 point roster
These facts are not controverted by the appellant by any affidavit in rejoinder
The questions that fall for our determination are 1 Is the post of Deputy Director Homeopathic an isolated post  and therefore reservation of the post for a scheduled caste candidate amounts to 100 reservation and must therefore be declared to be impermissible under article 164 2 Whether the posts of the Director and the three Deputy Directors could be grouped together for purposes of implementing the policy of reservation according to the 50 point roster
137 And 3 Could the posts of the Director and the three Deputy Directors in
the Directorate of Indigenous Medicines although they are posts carried on different grades still be clubbed together for purposes of reservation merely because they are Class I posts The argument of learned counsel for the appellant suffers from the infirmity that it overlooks that though the Directorate of Indigenous Medicines comprises of four posts namely that of the Director and three Deputy Directors which are Class I posts the posts of Director and Deputy Directors do not constitute one cadre 
They are members of the same Service but do not belong to the same cadre
According to the 50 point roster if in a particular grade a single post falls vacant it should in the case of first vacancy be considered as unreserved ie general and on the second occasion when a single post again falls vacant the same must be treated as reserved
Admittedly the post of the Director is the highest post in the Directorate of Indigenous Medicines and is carried in the higher pay scale or grade of Rs2225 75 2675 while the posts of the Deputy Directors are carried in the pay scale of grade of Rs1900 75 2500
In service jurisprudence the term cadre  has a definite legal connotation
In the legal sense the word cadre  is not synonymous with service 
Fundamental Rule 94 defines the word cadre  to mean the strength of a service or part of a service sanctioned as a separate unit
The post of the Director which is the highest post in the directorate is carried on a higher grade or scale while the posts of Deputy Directors are borne in a lower grade or scale and therefore constitute two distinct cadres or grades
It is open to the Government to constitute as many cadres in any particular service as it may choose according to the administrative convenience and expediency and it cannot be said that the establishment of the Directorate constituted the formation of a joint cadre of the Director and the Deputy Directors because the posts are not interchangeable and the incumbents do not perform the same duties carry the same responsibilities or draw the same pay
The conclusion is irresistible that the posts of the Director and those of the Deputy Directors constitute different cadres of the Service
It is manifest that the post of the Director of Indigenous Medicine which is the highest post in the Directorate carried on a higher grade or scale could not possibly be equated with those of the Deputy Directors on a lower grade or scale
In view of this according to the 50 point roaster if in a particular cadre a single post falls vacant it should in the case of first vacancy be considered as general
That being so the State Government could not have directed reservation of the post of Deputy Director Homeopathic which was the first vacancy in a particular cadre ie 138 that of the Deputy Directors for candidates belonging to the scheduled castes
Such reservation was not in conformity with the principles laid down in the 50 point roster and was impermissible under article 164 of the Constitution and clearly violative of the guarantee enshrined in article 161 of equal opportunity to all citizens relating to public employment
Clause 4 of article 16 is by way of an exception of the proviso to article 161
The High Court rightly held that the reservation of the post of Deputy Director Homeopathic amounted to 100 reservation which was impermissible under article 164 as otherwise it would render the guarantee of equal opportunity in the matter of public employment under article 161 wholly elusive and meaningless
Another serious infirmity in the argument of the learned counsel for the appellant is that it overlooks the basic principle that if there is only one post in the cadre there can be no reservation under article 164 of the Constitution
The whole concept of reservation for application of the 50 point roster is that there are more then one posts and the reservation as laid down by this Court in MR Balaji s case can be upto 50
The Government cannot for instance declare that the post of the Director of Indigenous Medicines shall be reserved for candidates belonging to scheduled castes
The Directorate is a para medical service with Director as its head and the three Deputy Directors belonging to three distinct and separate disciplines viz
Homeopathic Unani and Ayurvedic under him
In the para medical system the three posts of Deputy Directors pertain to three distinct systems and therefore each of them is an isolated post by itself
The same principle should we think as in the case of the Director apply
It is a moot point whether the isolated posts like those of the Deputy Directors can be subjected to the 50 point roster by the rotational system
We refrain from expressing any opinion on this aspect as it does not arise in the present case
Assuming that the 50 point roster applies admittedly the first vacancy in the cadre of Deputy Directors was that of the Deputy Director Homeopathic and it had to be treated as unreserved the second reserved and the third unreserved
The first vacancy of the Deputy Director Homeopathic in the cadre being treated as unreserved according to the roster had to be thrown open to all
A candidate belonging to the scheduled caste had therefore to compete with others
There is another aspect
The three posts of Deputy Directors of Homeopathic Unani and Ayurvedic are distinct and separate as they pertain to different disciplines and each one is isolated post by itself 139 carried in the same cadre
There can be no grouping of isolated posts even if they are carried on the same scale
The instructions issued by the Government of India from time to time relating to reservations of posts and appointments for the scheduled castes and scheduled tribes are contained in the Brochure on Reservation for Scheduled Castes and Scheduled Tribes in Service
Chapter 2 Part I gives the percentage of reservation of appointments or posts in favour of any backward class of citizens which in the opinion of the State is not adequately represented in the services under the State
These instructions have been issued to carry out the mandate of article 164 consistent with the equality clause under article 161 and 162 and the requirements of article 335 namely the maintenance of efficiency of administration
Para 24 provides that the reservations will be applied to each grade or post separately but isolated posts will be grouped as provided in Chapter 6
Paragraph 61 of Chapter 6 which is relevant for our purposes states that in the case where the posts are filled by direct recruitment isolated individual posts and small cadres may be grouped with posts in the same class for purpose of reservation taking into account the status salary and qualifications prescribed for the posts in question 
For this purpose it provides that a cadre or a grade or a division of a service consisting of less than 20 posts may be treated as a small cadre
A group so formed should not ordinarily consist of 25 posts
It then adds It is not intended that isolated posts should be grouped together only with other isolated posts
 That precisely is the situation here
The Government of India instructions clearly show that there can be no grouping of one or more isolated posts for purposes of reservation
To illustrate Professors in medical colleges are carried on the same grade or scale of pay but the posts of Professor of Cardiology Professor of Surgery Professor of Gynaecology pertain to particular disciplines and therefore each is an isolated post
We are not aware of any decision of this Court where excessive reservation of appointments or posts in favour of any backward class of citizens to the extent of 100 has been upheld except in the application of the carry forward rule
article 164 is an exception to article 161 and article 162 and therefore the power to make a special provision for reservation of posts and appointments in favour of the backward classes must not be so excessive which would in effect efface the guarantee of equal opportunity in the matter of public employment or at best 140 make it illusory
In Balaji s case which has now become locus classicus on the subject the Court attempted to impose a constitutional limit to the extent of preference not on narrower ground of reservation  but on broader grounds of policy
It spoke of adjusting  the interests of the weaker sections of society to the interests of the community as a whole  and declared that a formula must be evolved which would strike a reasonable balance between the several relevant considerations 
While striking down as unconstitutional government order by which 68 of the seats in educational institutions were reserved for Scheduled Castes Scheduled Tribes and other Backward Classes on the ground of excessive reservation and as a fraud on the Constitution the Court observed Speaking generally and in a broad way a special provision should be less than 50 per cent how much less than 50 per cent would depend upon the relevant prevailing circumstances in each case
 It is quite obvious that the observations in Balaji about 50 limit were not to be taken as a precise formula
In less than a year the Court in T Devadasan vs Union of India  Anr  while dealing with the effect of a carry forward rule which permitted reservation of over 50 posts in the third year held that reservation of 644 posts was unconstitutional
The Court by a majority of 4 1 held that article 164 was a proviso or an exception to article 161 and therefore should not be interpreted so as to nullify or destroy the main provision as otherwise it would in effect render the guarantee of equality of opportunity in the matter of public employment under article 161 wholly illusory and meaningless and added The overriding effect of cl
4 of article 16 on cls
1 and 2 could only extend to the making of a reasonable number of reservations of appointments and posts in certain circumstances
A reasonable number  is one which  strikes a reasonable balance between the claims of the backward classes and those of other citizens  Thus reservations are legitimate to the extent that they provide the backward classes with an opportunity equal to that of members of the more advanced classes 
The maximum permissible limit for the backward classes according to the majority in Devadasan s case is that 141 under which both they and others would enjoy equal opportunity 
The Court further added that the reservation for backward communities should not be so excessive as to create a monopoly or unduly disturb the legitimate claims of other communities
In State af Kerala  Anr
vs NM Thomas  Ors  the majority accepted the dissenting opinion of Subba Rao J in Devadasan s case and held that article 164 is not an exception to article 161 but is a legislative device by which the framers of the Constitution have preserved a power untrammelled by the other provisions of the Article
It is a facet of article 161 as it fosters and furthers the idea of equality of opportunity with special reference to under privileged and deprived classes of citizens
In his dissenting opinion Khanna J speaking for himself and AC Gupta J adhered to the majority view in Devadasan s case that article 164 was an exception to article 161 and 2
According to the learned Judges article 161 only embodies the notion of formal or legal equality and therefore there is no scope for spelling out any concept of preferential treatment from the language of cl1 of article 16
In Thomas the Court upheld reservation to the extent of 68 on the basis of a carry forward rule which related to Class III posts and allowed relaxation to the scheduled caste candidates from appearing in the examination for promotion
What is of significance is that Krishna Iyer J who formed the majority in Thomas has gone back upon his view in Akhil Bharatiya Soshit Karamchari SnaghRailway vs Union of India  ors
   and held that article 164 is an exception to article 161 and 2
While considering whether scheduled castes or scheduled tribes were already duly represented or not in specific cadres of the service the Court reaffirmed the principle of reservation of appointments or posts under article 164 and upheld the carry forward rule
It was emphasised that what had to be seen was the overall picture and not restricted to a particular service or cadre
The maximum of 50 for reserved quotas in their totality was held to be fair and reasonable
Chinnappa Reddy J in his concurring judgment observed When posts whether at the stage of initial appointment or at the stage of promotion are reserved or other preferential treatment is accorded to members of the Scheduled Castes Scheduled Tribes and other socially and economically backward classes it is not a concession or privilege extended to them it is in recognition of their undoubted Fundamental Right to Equality of opportunity and in discharge of the Constitutional obligation imposed upon the 142 State to secure to all its citizens Justice social economic and political  and Equality of status and opportunity  to assure the dignity of the individual among all citizens to promote with special care the educational and economic interests of the weaker section of the people  to ensure their participation on equal basis in the administration of the affairs of the country and generally to foster the ideal of a Sovereign Socialist Secular Democratic Republic 
Every lawful method is permissible to secure the due re presentation of the Scheduled Castes and Scheduled Tribes in the Public Services
There is no fixed ceiling to reservation or preferential treatment in favour of the Scheduled Castes and Scheduled Tribes though generally reservation may not be far in excess of fifty per cent
 It follows that though the maximum limit of 50 as indicated was not an inflexible rule but in making special provision for reservation of posts or appointments the State must seek to strike a balance of adjusting the interests of the weaker sections of society to the interests of the community as a whole
In State of Maharashtra vs Shivaji Y Garge CA No 411784 decided on 19th October 1984 this Court held the reservation of posts to the extent of 80 as excessive and destructive of the principle of equality of opportunity in matters relating to public employment guaranteed under article 161 of the Constitution and directed that the State Government would step down the reservation for economically weaker sections of the society from 46 to 21 in future leaving in tact 34 posts reserved for scheduled castes scheduled tribes denotified nomadic tribes and other backward classes
Thus the overall picture was that reservation of posts and appointments under article 161 was reduced from 80 to 55
Once the power to make reservation in favour of scheduled castes and scheduled tribes is exercised it must necessarily follow that a roster pointwise for the purpose of vacancies for which reservation has been made must be brought into effect and in order to do full justice a carry forward rule must be so applied that in any particular year there is not more than 50 reservation
According to the SO point roster admittedly the post of Deputy Director Homeopathic was the first vacancy in the cadre of Deputy Directors and therefore it had to be treated as general ie unreserved
In the recent case of KC
Vasanth Kumar  Anr
vs State of Karnataka 1985 Suppl
SCC 714 one of us Sen J dealing with the 143 extent of reservation under article 154 and article 164 observed that the doctrine of protective discrimination embodied therein and the mandate of article 292 was subject to the requirements of article 335 and could not be stretched beyond a particular limit
It was observed Questions as to the validity or otherwise of reservations have been agitated several times before this Court and resolved
The frequency and vigour with which these questions are raised is a disturbing indication of the tension and unease in society in regard to the manner in which article 154 and article 164 are operated by the State
The Preamble to our Constitution shows the nation s resolve to secure to all its citizens Justice social economic and political
The State s objective of bringing about and maintaining social justice must be achieved reasonably having regard to the interests of all
Irrational and unreasonable moves by the State will slowly but surely tear apart the fabric of society
It is primarily the duty and function of the State to inject moderation into the decisions taken under articles 154 and 164 because justice lives in the hearts of men and a growing sense of injustice and reverse discrimination fuelled by unwise State action will destroy not advance social justice
If the State contravenes the constitutional mandates of article 161 and article 335 this Court will of course have to perform its duty
 A note of caution was then added The State exists to serve its people
There are some services where expertise and skill are of the essence
For example a hospital run by the State serves the ailing members of the public who need medical aid
Medical services directly affect and deal with the health and life of the populace
Professional expertise born of knowledge and experience of a high degree of technical knowledge and operational skill is required of pilots and aviation engineers
The lives of citizens depend on such persons
There are other similar fields of governmental activity where professional technological scientific or other special skill is called for
In such services or posts under the Union or States we think there can be no room for reservation of posts merit alone must be the sole and decisive consideration for appointments
 144 There is one more decision that calls for our attention namely that of Arati Ray Choudhury vs Union of India  Ors  where the effect of a carry forward rule resulted in 100 reservation
After the decision in Devadasan s case the Ministry of Home Affairs issued a memorandum modifying the carry forward rule so as to com ply with the decision
The said memorandum was suitably modified by the Railway Board in its application to Railway Services by its letter dated 6th October 1964
The Railway Board prepared a model roster signifying the turns of reserved and unreserved vacancies
The Note appended to the roster provided If there are only two vacancies to be filled on a particular occasion not more that one may be treated as reserved and if there be only one vacancy it should be treated as unreserved
If on this account a reserved point is treated as unreserved the reservation may be carried forward in the subsequent two recruitment years
 In order to minimise chances of reserved posts being converted into unreserved posts the Railway Board modified the reservation rule in 1971 by adding the following words If there is one post to be filled selection should invariably be held for two posts ie one actual and the other to cover unforseen circumstances
 It was contended on behalf of the petitioner that the carry forward rule was violative of articles 14 and 16 of the Constitution and the vacancy in the post of Headmistress of the Kharagpur School ought to be treated as unreserved vacancy
In repelling the contention Chandrachud J observed The model roster accompanying the letter of the Railway Board dated January 16 1964 is designed to meet the requirements of the new situation arising out of the rules framed in deference to the judgment in Devadasan s case
Both the letter and the Note appended to the roster state expressly that if there are only two vacancies to be filled on a particular occasion not more than one may be treated as reserved and if there be only one vacancy it should be treated as unreserved
The words on a particular occasion were substituted on September 2 1964 by the words year of recruitment
Thus in the first place each year of 145 recruitment is directed to be considered separately and by itself as laid down in Devadasan s case so that if there are only two vacancies to be filled in a particular year of recruitment not more than one vacancy can be treated as reserved
Secondly and that is directly relevant for our purpose if there be only one vacancy to be filled in a given year of recruitment it has to be treated as unreserved irrespective of whether it occurs in the model roster at a reserved point
The appointment then is not open to the charge that the reservation exceeds 50 for if the very first vacancy in the first year of recruitment is in practice treated as reserved vacancy the system may be open to the objection that the reservation not only exceeds 50 but is in fact cent per cent
But if on this account that is to say if on account of the requirement that the first vacancy must in practice be treated as unreserved even if it occurs in the model roster at a reserved pointa reserved point is treated as unreserved the reservation can be carried forward to not more than two subsequent years of recruitment
Thus if two vacancies occur say within an initial span of three years the first vacancy has to be treated as an unreserved vacancy and the second as reserved
 The learned Judge held that the open class reaped a benefit in 1966 67 when a reserved vacancy was treated as unreserved by the appointment of an open candidate Smt
Gita Biswas
If the carry forward rule had to be given any meaning the vacancy had to be carried forward for the benefit of scheduled castes and scheduled tribes until the close of the financial year 1968 69
The Kharagpur vacancy could not therefore go to the petitioner which admittedly did not belong to the reserved class
It was further observed that the construction sought to be put on the rule by the petitioner would perpetuate a social injustice which has clouded the lives of a large section of humanity which is struggling to find its feet
Such a construction was contrary to the plain language of the letter of the Railway Board the intendment of the rule and its legislative history
The decision in Arati Ray Choudhury s case therefore turned on the carry forward rule and is clearly distinguishable on facts It is quite clear after the decision in Devadasan s case that no reservation could be made under article 164 so as to create a monopoly
Otherwise it would render the guarantee of equal opportunity contained in articles 161 and 162 wholly meaningless and illusory
146 These principles unmistakably lead us to the conclusion that if there is only one post in the cadre there can be no reservation with reference to that post either for recruitment at the initial stage or for filling up a future vacancy in respect of that post
A reservation which would come under article 164 pre supposes the availability of at least more than one posts in that cadre
We would for these reasons uphold the judgment of the High Court quashing the impugned advertisement issued by the Bihar Public Service Commission as also the appointment of the appellant to the post of Deputy Director Homeopathic
We direct the Public Service Commission to take steps to re advertise the post with advertence to the observations made above
However having regard to the fact that the appellant has continued to hold that post ever since 30th May 1979 and confirmed against that post we direct the State Government to adjust him in an equivalent post in the Health Department
At the time of his appointment the appellant was Medical officer Homeo of Government Homeopathic Dispensary Raharia Saharsa and his appointment to the higher grade of Deputy Director Homeopathic in the directorate of Indigenous Medicines was virtually a promotion for him
This may be kept in view by the Government while passing suitable orders
There shall be no order as to costs
HSK Appeal dismissed


Summary:
 Section 5A1 of the Kerala General Sales Tax Act 1963 requires a dealer to pay purchase tax on the taxable goods purchased in circumstances in which no tax is payable if he a consumes such goods in the manufacture of other goods for sale or otherwise or b disposes of such goods in any manner other than by way of sale in the State or c despatches them to any place outside the State except as a direct result of sale or purchase in the course of inter state trade or commerce
The assessee company a manufacturer and dealer in ceramics was sought to be assessed to tax under section 5A of the Act for the assessment years 1974 75 1975 76 and 1976 77 among other things for the purchase turnover of cashew shells and consumed stores lime shells etc purchased by it
The assessee contended that cashew shells were used by them as fuel for manufacturing products and therefore by virtue of notification SRO 73273 the purchase turnover of cashew shells was exempt from tax
In the alternative it was contended that the purchases in question were not liable for levy of tax since none of the conditions prescribed in clause a b or c of section 5A1 of the Act were satisfied and that lime shells and certain consumed stores had been used in the maintenance of the kiln and the factory and were not taxable in view of the conditions prescribed in section 5A
The assessing authority and the First Appellate Authority brought these purchases to tax under section 5Al of the Act
The Tribunal rejected the assessee s claim of exemption under the said notification
However it held that these items were not taxable under section 5A of the Act
It took the view that the cashew shells had been used only as fuel in the kiln for the manufacture of tiles and other goods and hence clause a of section 5A1 of the Act was not satisfied there being no consumption of the 249 cashew shells in the manufacture of other goods or otherwise that there was no disposal of lime shells or the consumed stores which were used up for the maintenance of the factory and kiln and that there was also no consumption of those goods in the manufacture of other goods for sale or otherwise
The High Court upheld the decision of the Tribunal
Dismissing the special leave petitions by the Revenue  HELD l Goods used for ancillary purpose like fuel in the process of manufacture do not fall within section 5A1a of the Act
Consumption must be in the manufacture as raw material or of other components which go into the making of the end product to come within the mischief of the section
Cashew shells do not tend to the making of the end product
These had been used as fuel in the kiln and did not get transformed into the end product
These had not been used as raw material in the manufacture of the goods but only as aid in the manufacture of goods by the assessee
Cashew shells therefore do not attract levy of tax under the said section
The same is the position with regard to the lime shells and consumed stores which have been used only in the maintenance of the kiln and the factory and not used in the manufacture of the end product
252E G 2
Disposal means transfer of title in the goods to any other person
The expression dispose means to transfer or alienate
Clause b of section 5A1 requires that the goods in question should be transferred to some person otherwise than by way of sale
In the instant case there was no evidence of transfer of cashew shells the lime shells or the consumed stores at all
These were used by the assessee himself as fuel in the case of cashew shells for maintenance of kiln
Therefore there was no disposal of the goods as known to law
Sub clause b of section 5AI was therefore not applicable
253G H 254A B