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2025 (2) TMI 251 - HC - Indian LawsPlacement of the petitioners in the Commercial Department - Merger Rules 2022 which merged employees from the Entertainment Tax Department into the Commercial Tax Department violated Articles 14 16 and 21 of the Constitution by treating these employees differently and affecting their promotion prospects? - HELD THAT - The overriding effect has been mentioned in Rule 2 of the Merger Rules. Rule 3(3) of the Rules defines the date of Substantive Appointment as the date of appointment at the post held on the date of Notification dated 24.04.2018. Rule 3 (4) of the Merger Rules 2022 defines the cadre of posts in the Commercial Tax Department and the Entertainment Tax Department. Rule 4(4) provides that promotion and other service matters of related posts shall be decided under the concerning Rules of service cadre of the Commercial Tax Department. Rule 4(5) of the Merger Rules 2022 clarifies that the services of the merged employees shall be governed by the concerned Service Rules governing the cadre. Rule 4(7) of the Merger Rules 2022 plays a pivotal role in preserving and protecting the continuity of services of the petitioners. Hence their date of merger is being treated as the date of appointment in the related service cadre of Commercial Tax Department to maintain the continuity of service. It is clear that till framing of Merger Rules 2022 the petitioners have no grievance as they continued to enjoy the service benefits as per the Uttar Pradesh Entertainment and Betting Tax (Gazetted) Service Rules 1992. On account of Merger Rules 2022 when they have been placed at the bottom of the seniority list in the respective cadres of the Commercial Tax Department as on 24.04.2018 they raised their grievance by means of the aforesaid writ petitions stating that the action taken by the State Government is hit by Article 14 of the Constitution of India. The only grievance raised before this Court is that the placement of the petitioners in the Commercial Department has caused prejudice. In this regard reliance placed by the learned counsel for the respondents on INDIAN AIRLINES OFFICERS VERSUS INDIAN AIRLINES LTD. ORS 2007 (7) TMI 660 - SUPREME COURT is fully applicable as it has been held that the whole scheme cannot be said to be arbitrary/discriminatory merely because some employees suffer in terms of promotion/seniority and ultimately their chances of promotion are affected. There is no violation of Articles 14 16 21 of the Constitution of India and since nothing in the Merger Rules 2022 violates the aforesaid Articles the prayer made by the petitioners in both the writ petitions for declaring it ultra vires has no substance and the same has no force in law as the matter pertains to policy decision taken by the State Government. Conclusion - The Merger Rules 2022 were not ultra vires the Constitution. The policy decisions are not subject to judicial interference unless they are manifestly arbitrary or violate specific constitutional provisions. The petitioners substantive appointment and status be treated as of the date specified in the Merger Rules 2022. Petition dismissed.
The judgment from the Allahabad High Court addresses the legal challenges brought by petitioners regarding the "Employee of Entertainment Tax Department (Service Cadres of Officers, Inspectors and Other Employees) in the related cadres of Commercial Tax Department, Uttar Pradesh Merger Rules, 2022" (hereinafter referred to as "Merger Rules, 2022"). The petitioners, former employees of the now-defunct Entertainment and Betting Tax Department, sought to have these rules declared unconstitutional under Articles 14, 16, and 21 of the Indian Constitution.
**Issues Presented and Considered** The primary issues considered were:
**Issue-wise Detailed Analysis** **Legal Framework and Precedents** The petitioners argued that the Merger Rules, 2022, were unconstitutional as they created an unreasonable classification by treating employees of the erstwhile Entertainment Tax Department differently. They cited precedents such as B. Manmad Reddy v. Chandra Prakash Reddy and S. Sivaguru v. State of Tamil Nadu to support their claim that classification based on the origin of employees was impermissible. **Court's Interpretation and Reasoning** The Court noted that the Merger Rules, 2022, were framed as a policy decision by the State Government in response to the repeal of the Entertainment Tax Act under the U.P. Goods & Services Tax Act, 2017. The Court emphasized that policy decisions are generally not subject to judicial review unless they are grossly arbitrary or irrational. **Key Evidence and Findings** The Court found that the merger was a policy decision aimed at protecting the services of the employees following the repeal of their original governing statute. The Court observed that the petitioners continued to receive service benefits under the previous rules until the Merger Rules, 2022, were enacted. **Application of Law to Facts** The Court applied the principles of judicial review, emphasizing the limited scope of interference with policy decisions. It found that the Merger Rules, 2022, did not violate Articles 14, 16, or 21, as they provided a reasonable basis for the classification and seniority determination of the merged employees. **Treatment of Competing Arguments** The petitioners argued that their seniority and promotional prospects were unfairly affected. The Court, however, referenced precedents such as Indian Airlines Officers' Assn. v. Indian Airlines Ltd., which held that changes in promotion prospects do not constitute a violation of constitutional rights. The Court also cited cases like Bihar State Electricity Board v. Dharamdeo Das to support the principle that seniority is determined from the date of entry into a new cadre. **Conclusions** The Court concluded that the Merger Rules, 2022, were a valid policy decision and did not infringe upon the constitutional rights of the petitioners. The rules were designed to protect the continuity of service for employees affected by the statutory repeal and subsequent departmental merger. **Significant Holdings** The Court held that the Merger Rules, 2022, were not ultra vires the Constitution. It emphasized that policy decisions are not subject to judicial interference unless they are manifestly arbitrary or violate specific constitutional provisions. **Core Principles Established** The judgment reinforced the principle that policy decisions, particularly those involving administrative restructuring, are within the purview of the executive and not subject to judicial review unless they are patently unreasonable or discriminatory. **Final Determinations on Each Issue** The Court dismissed the petitions, stating that the Merger Rules, 2022, were a legitimate exercise of the State's policy-making powers. The Court directed that the petitioners' substantive appointment and status be treated as of the date specified in the Merger Rules, 2022, with no costs awarded.
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