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The Gujarat State Sa... v. The State Of Gujarat...

Gujarat High Court
Dec 20, 1976
Smart Summary (Beta)

Structured Summary of the Opinion (P.D. Desai, J.)

Factual and Procedural Background

The first petitioner is an association of non-gazetted employees of the Sales-tax Department of the State Government of Gujarat. The second, third and fourth petitioners are employees of the Sales-tax Department. The first respondent is the State of Gujarat and the second respondent is the Commissioner of Sales-tax, Gujarat.

There were 120 vacant posts of Sales-tax Inspector to be filled by direct selection. The Commissioner published an advertisement inviting applications; over 15,000 candidates applied. More than 1,000 applicants held First Class university degrees (including about 580 First Class Commerce graduates, 101 First Class Arts graduates and about 500 First Class Science graduates).

To screen applicants, the second respondent decided to restrict the field to First Class graduates only and not to call Second Class or Third Class graduates (including Commerce graduates with Accountancy as the subject) for interview. Two petitioners held Second Class Commerce degrees with Accountancy, and one petitioner held a Third Class Commerce degree with Accountancy (one petitioner also held a postgraduate Commerce degree). The petitioners challenged the screening decision, relying on Rule 2(a) of the Sales-tax Inspectors Recruitment Rules, 1976, which provides minimum eligibility and contains a proviso requiring preference for B.Com (Accountancy), Chartered Accountants, or equivalent qualifications.

The respondents defended the screening as a rational demarcation of the zone of selection given the large number of applicants and contended that the preference in Rule 2(a) operates at the appointment stage, not at the initial screening stage.

Procedural outcome stated in the opinion: the rule (petition) was discharged, with no order as to costs.

Legal Issues Presented

  1. What is the proper interpretation of clause (a) of Rule 2 of the Sales-tax Inspectors Recruitment Rules, 1976—specifically, does the proviso requiring preference for B.Com (Accountancy), Chartered Accountants or equivalent qualifications require that Commerce graduates with Accountancy (even if Second or Third Class) be included at the initial screening stage?
  2. Whether an appointing authority may, in the context of large numbers of applicants, demarcate a field of choice by adopting a rational screening test (here: limiting consideration to First Class graduates) without violating Rule 2(a) or constitutional guarantees under Articles 14 and 16.
  3. Whether the screening practice complained of defeats the object of the preference proviso by excluding Commerce graduates with Accountancy from early consideration.

Arguments of the Parties

Petitioners' Arguments

  • Rule 2(a) requires appointment by direct selection from persons who are under 26 and possess a university degree, but the proviso mandates that preference be given to B.Com graduates with Accountancy, Chartered Accountants, or equivalent qualifications.
  • Because the proviso requires preference to Commerce graduates with Accountancy, the petitioners argued that all Commerce graduates with Accountancy (irrespective of First, Second or Third Class degrees) should have been called for interview at the screening stage to effectuate the preference clause.
  • Screening that weeds out Second or Third Class Commerce graduates at the initial stage renders the preference clause meaningless and denies the preferential treatment that the rule prescribes.

Respondents' Arguments

  • Given the large number of applicants, it was necessary and rational to demarcate a field of choice; inviting only First Class graduates for interview was a permissible screening method.
  • On a true interpretation of Rule 2(a), all degree-holders of recognised universities are eligible for consideration, regardless of faculty; the proviso operates as a preference at the appointment stage and not as an absolute right to be included at every stage of selection.
  • The preference operates "everything else being equal" at appointment; therefore restricting the initial field to First Class graduates does not violate the Rules.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court proceeded to construe Rule 2 as a whole, focusing on clause (a) and its proviso. It identified two parts of clause (a): (i) the substantive provision prescribing minimum eligibility (not more than 26 years of age and possession of a degree of a recognised university), and (ii) the proviso which engrafts a rule of preference in favour of B.Com (Accountancy), Chartered Accountants, or equivalent qualifications recognised by the State Government.

The court analyzed the relationship between the substantive eligibility requirement and the proviso. It concluded that the substantive provision makes graduates of all faculties eligible for consideration and that the proviso creates a preference to be applied in making appointments by direct selection. The court read the proviso as a rule of preference that presupposes that candidates being compared are of equal merit; the proviso does not create an absolute entitlement to be considered at every preliminary stage irrespective of comparative merit.

The court rejected the petitioners' contention that excluding Second or Third Class Commerce graduates at the screening stage nullifies the preference clause. It held that this contention misconceives the scope of the proviso and ignores the recognized power of an appointing authority to demarcate a field of choice when faced with a very large number of applicants.

The opinion explained that it is competent for an appointing authority to devise a rational screening test to limit the zone of selection so that the number of candidates called for interview bears a reasonable proportion to the number of vacancies. Such a power to restrict the zone of selection is compatible with Articles 14 and 16 provided the screening is based on a rational formula; the rule of preference will continue to operate within the restricted zone.

Applying these legal principles to the facts, the court found the screening criterion—limiting consideration to First Class graduates—was a rational and time-honoured test, directly connected to the object of selecting meritorious candidates where about 1,181 candidates passed the test for 120 vacancies. The court further addressed the submission regarding the specialized nature of Sales Tax Inspector duties (requiring accountancy knowledge). It noted there was no material on record detailing the duties, and even assuming accounting skill is desirable, (a) First Class graduates are likely to possess sufficient intellectual calibre and capacity to acquire job-specific skills, and (b) the Rules provide in-built safeguards: training for direct recruits and a departmental examination which, if failed, leads to termination of service. These safeguards mitigate any risk that screening will defeat the substantive object of recruiting suitably qualified persons.

On this basis the court held that the screening adopted by the second respondent did not violate the statutory Rule 2(a) or constitutional guarantees; the preference proviso remains effective at the appointment stage within the restricted field.

Holding and Implications

Holding: The court's final dispositive statement was that the petition fails and the rule is discharged. The opinion records: RULE DISCHARGED, with no order as to costs.

Direct effect on the parties: The second respondent's decision to restrict the field of candidates to First Class graduates for the purpose of calling candidates for interview was upheld; the petitioners' challenge to that screening process was rejected.

Broader implications: The opinion explains the legal principles governing the interpretation of a proviso creating a preference and confirms the appointing authority's competence to adopt a rational screening test when faced with a large applicant pool, with the proviso operating within the restricted zone. The opinion itself does not state that it is establishing or announcing a broader rule of precedent beyond its reasoning in this case.

Judge: P.D. Desai, J. (as named in the opinion).

Show all summary ...

P.D Desai, J.:— The first petitioner is an Association of Non-gazetted employees of the Sales-tax Department of the State Government. The second, third and fourth petitioners are employees of the State Government in the said Department. The first respondent is the State of Gujarat and the second respondent is the Commissioner of Sales-tax, Gujarat.

2. Amongst the posts borne on the staff of the Sales-tax Department is the post of Sales-tax Inspector. Recruitment to the said post is governed by statutory rules framed under Article 309 of the Constitution of India. The said rules are known as the Sales-tax Inspectors Recruitment Rules, 1976 (hereinafter referred to as ‘the rules’). The Rules were promulgated on August 17, 1976, I shall presently examine the various provisions of those rules. For the time-being, suffice it to say that appointment to the post of Sales-tax Inspector is required to be made either by direct selection or by promotion in certain proportion. The present petition involves the question of interpretation of clause (a) of Rule 2 of the Rules which lays down the criterion for appointment by direct selection.

3. It appears that 120 posts of Sales-tax Inspectors are lying vacant and they are required to be filled in by direct selection. The second respondent, therefore, issued an advertisement which was published in the newspapers on August 5, 1976 inviting applications from eligible candidates. In response to the said advertisement, more than 15000 candidates applied including the second, third and fourth respondents. Such large number of applications required the adoption of some test for screening the candidates at the threshold. It was found that more than 1000 applicants were holding First Class Degrees in different Faculties of Recognized Universities, Amongst them there were about 580 First Class Commerce Graduates, about 101 First Class Arts Graduates and about 500 First Class Science Graduates. Looking to the number of posts that were to be filled up by direct selection and having regard to the fact that more than 1000 candidases possessed First Class degrees in various Faculties of recognised Universities, the second respondent, at the stage of screening, restricted the field of choice to First Class Graduates only and decided not to call for interview Second Class or Third Class Graduates including Graduates having Commerce Degree with Accountancy as the subject. It is this decision of the second respondent which has given rise to the present petition at the instance, inter alia of the second, third and fourth petitioners who were amongst the candidates eliminated since two of them are graduates in Commerce with Accountancy as the subject, holding Second Class Degree, and one of them is a Commerce Graduate with Accountancy, holding a Third Class Degree. It might be stated that one of the petitioners also holds a post-graduate Degree in Commerce. The contention of the petitioners is that under Rule 2(a) of the Rules appointment to the post of Sales-tax Inspectors is to be made by direct selection of a person who: (1) shall be not more than 26 years of age; and (2) possesses a degree of a recognized University, but preference has to be given to a candidate who possesses the degree of B.Com with Accountancy, or Chartered Accountants, or possesses a qualification recognised to be equivalent to such examination by the Government of Gujarat and that accordingly in order to meet with the requirement of the preference clause, all Graduates who possess B.Com Degree with Accountancy, or a qualification recognised to be equivalent to such examination by the Government of Gujarat, or who are Chartered Accountants were required to be called for interview, irrespective of whether the concerned candidate held the graduate degree in First Class, Second Class or Third Class. According to the petitioners, screening was a step in the process of direct selection and even at that stage, the preference rule operated with full vigour and, therefore, Commerce Graduates with Accountancy as a subject were required to be preferred even to First Class Graduates of other faculties and by adopting the screening test that he did, the second respondent violated the statutory Rule 2(a).

4. The case of the respondents, on the other hand, is that having regard to the large number of applicants, it was necessary to demarcate a field of choice or zone of selection and that, therefore, a very rational test was adopted by the authorities of inviting for interview only those candidates who possessed First Class Degree in the various disciplines of the recognised Universities. The respondents contend that on a true interpretation of the relevant rule relating to appointment by direct selection, all persons who held a degree of a recognised University, irrespective of the faculty, branch or discipline, in which they possessed such a degree, were entitled and eligible to be considered for the post of Sales-tax Inspector and that, therefore, to invite only First Class Graduates in various faculties was not only rational but was also permissible under the Rules. The preference clause, according to the respondents, operates at the stage of appointment and Commerce Graduates with Accountancy and others referred to in Rule 2(a) are to be preferred, everything-else being equal, at that stage.

5. From the foregoing statement of facts and narration of the rival case of the parties, it would appeal that the only question in this case is one of the true interpretation of the relevant Recruitment Rule. The Rule with which we are directly concerned is Rule 2(a). However, in order to interpret the Rule in its proper context, it would be necessary to set put the whole of Rule 2. The said Rule reads as under:—

“Appointment to the post of Sales Tax Inspectors shall be made either.

(a) by direct selection of a person who—

(i) shall be not more than 26 years of age; and

(ii) possesses a degree of a recognised University.

Provided that preference shall be given to a candidate who possesses the degree of B.Com with Accountancy or Chartered Accountants or possesses a qualification recognised to be equivalent to such examination by the Government of Gujarat; or

(b) by promotion of a person of proved merits and efficiency from amongst the persons holding the posts of Senior Clerk in the Sales Tax Department who has served satisfactorily for about four years in the Sales Tax Department and who has passed the examination prescribed for Sales Tax Inspectors.”

6. It might also be useful to refer to the other Rules which have a bearing on the matter under consideration. Rule 3 prescribes the ratio between the posts to be filled in by direct selection and by promotion and the ratio is 3:2, that is to say, three candidates by direct selection and two candidates by promotion. Rule 5, inter alia, provides that a candidate appointed by direct selection shall have first to undergo a course of training for a period of three months conducted by the Sales Tax Department and Rule 6 makes a similar provision in respect of the promoters. Rule 7 provides that direct recruit shall be required to pass the Departmental Examination in specified period and in specified chances in accordance with the rules prescribed by the Government in that behalf from time to time. Rule 9 provides that if such a candidate fails to pass the Departmental Examination, his services shall be terminated.

7. Having set out the relevant Rule, let us proceed to construe Rule 2(a) which, as earlier stated, is the provision which falls for direct consideration inasmuch as the petitioners, though they are employees of the Department, offered themselves as candidates for recruitment by direct selection. The said clause of Rule 2 provides for appointment to the post of Sales Tax Inspectors by direct selection and lays down the minimum eligibility qualifications. Two qualifications which are laid down are that the candidate must not be more than 26 years of age and must possess a degree of a recognised University. It would thus appear that every person, who possesses a degree of a recognised University, is eligible for being considered for direct recruitment provided he has not crossed the age of 26. This is the substantive provision of clause (a) of Rule 2 and be it noted that it makes no distinction between the Graduates of various faculties. There is, however, a proviso to clause (a) which says that preference shall be given to a candidate who; (1) possesses the degree of B.Com with Accountancy; (2) is a Chartered Accountant; (3) posseses a qualification recognised to be equivalent to such examination by the Government of Gujarat. The proviso, therefore, engrafts a rule of preference on the substantive provision and it requires the appointing authority to give a preference, while considering direct recruits for appointment to the concerned post, to a candidate of the Commerce Faculty having Accountancy as the subject, or to a Chartered Accountant or to a person who possesses a qualification recognised to be equivalent to such examination by the State Government. It is required to be borne in mind, however, that the preference is to be given in making appointment by direct selection and that though the preference clause does not say so in so many words, the question of giving preference can only arise when Graduates from the other faculties and the faculty of Commerce are found to be of equal merit. This is implicit in the rule of preference and will have to be read into it in order to give it a reasonable construction. It is inconceivable that in a matter of recruitment to a public service, the rule-framing authority could have enviseged that preference should be given to Commerce Graduates with Accountancy as one of the subjects or to a candidate having the other specified qualifications in clause (a) even though he is found, at an open competition between graduates of all faculties, to be a person who cannot be bracketed on merits with candidates who are graduates from other faculties. This construction derives support also from the substantive provision of the Rule which makes all graduates, irrespective of faculty, broach or discipline, eligible for being considered for appointment by direct selection. To hold that the rule of preference was enacted to give to Commerce graduates with Accountancy or to candidates having other prescribed qualifications an absolute preference over the graduates of other faculties would be to denude the substantive provision of much of its force and effect and to covert the rule of preference into a rule of reservation thereby obliterating altogether the right of other candidates possessing degree of recognised Universities in various other faculties to be considered for the post. Such could not be the reasonable construction of the rule and it could not even have been the intention of the trainers of the Rules.

8. It was strenuously urged on behalf of the petitioners that, if, at the very stage of screening, candidates holding second Class or Third Class Degrees in Commerce with Accountancy as a subject are permitted to be weeded out, the preference clause would become meaningless and it would enable the recruitment agency to leave out of consideration a class of candidates who are required to be given a preferential treatment in the matter of appointment. The argument, in the first place, is misconceived, for, it proceeds upon a misconception of the true meaning and scope of the preference clause as exaplained above. In the next place, it is well-settled that though the Recruitment Rules may prescribe the minimum eligibility qualification, it is competent to an appointing authority to demarcate the field of choice, that is to say, to prescribe some rational screening test by the adoption of which the necessity of calling for interview or for examination, as the case may be, every eligible candidate is eliminated and the zone of selection is restricted to candidates with merit bearing a reasonable proportion to the number of vacancies to be filled up. In other words, though an obligation to consider every qualified candidate may be implicit in the recruitment rules as also in the equal opportunity right enshrined in Articles 14 and 16 of the Constitution, screening a candidate out of consideration at in initial stage of the process of selection is not illegal or unconstitutional, if a legitimate field demarcating the choice by reference to some rational formula is carved out. The power to prescribe a zone of selection or field of choice cannot be denied even in a case where there is a preference clause inasmuch as the rule of preference will still continue to operate in the restricted zone of consideration. In the present times of large-scale unemployment, unless such power is recognised, the appointing authority will have to allow every eligible candidate to compete in the process of selection at all stages upto the final appointment, involving such waste of public time, money and energy and arousing false hopes in the minds of the competing candidates. There is, therefore, nothing inherently wrong in restricting the field of choice in the present case to First Class graduates of various faculties. The test adopted is undoubtedly rational and time-honoured and it has direct nexus with the object of selection, for the object is to draw upon the best talent in order to fill up the requisite number of posts. In the present case, about 1181 candidates qualify for consideration on adoption of this test and such number of candidates bears a reasonable proportion to the number of vacancies to be filled up, namely, 120.

9. It is true that Commerce graduates having Accountancy as the subject and candidates having other prescribed qualifications are required to be preferred under the proviso to clause (a). However, as earlier stated, the rule of preference operates at the stage of appointment and, that too, provided all other things are equal, and it will still continue to operate even in the restricted field of choice. Therefore, amongst First Class graduates of various faculties, graduates belonging to the Commerce faculty, having Accountancy as a subject, or candidates having other prescribed qualifications, will have to be preferred, provided everything else is equal, at the stage of final selection. It would be unreasonable, indeed illogical, to hold, however, that the preference clause contains a at to the effect that, at the stage of screening, a Third Class Commerce graduate must be grouped with a First Class graduate of another faculty and that he could be eliminated only at the stage of final selection. Such is not the effect and intendment or the preference clause and to place it on such an absolute pedestal would render the underlying object of the Recruitment Rules nugatory and make the process of selection cumbersome. It would thus appear that there is no violation either of any constitutional guarantee or of any statutory provision in the second respondent adopting the aforesaid screening test.

10. Another point which was pressed for serious consideration was that the nature of duties to be performed by the Sales Tax Inspectors requires them to have specialized knowledge of accountancy and that it is with that object in mind that the rule of preference was enacted in the Recruitment Rules and that, therefore, to weed out Commerce graduates with Accountancy as a subject at the screening stage would frustrate the salient provision made in the preference clause with the end in view of recruiting the best talent suited to perform the duties of the job efficiently. There is no material on the record of the case to indicate as to what the duties of a Sales Tax Inspector are. Assuming, however, that a Sales Tax Inspector is required to go into the account-books of the various assessees and that, therefore, ordinarily he should be a person who is well-qualified to deal with matters relating to accounts, there is no reason to hold that by bringing into the field of choice First Class graduates of all faculties, the mort suitable person would not be selected and the best talent suitable for the job would not be recruited. In this connection, two things are required to be borne in mind. First, the field of choice having been carved out so as to limit it to candidates who have a meritorious academic record at the final University Examinations, candidates passing the screening test would ordinarily be persons possessing certain intellectual calibre and statute. It may not be difficult for them to acquire necessary equipment for the job in course of time and to give their best. Secondly and this is more important candidates appointed by direct selection are required under the Recruitment Rules to undergo a course of training conducted by the Department. It is legitimate to presume that in the course of such training they will be imparted all the knowledge and practical education requisite for the job. The candidates will then have to pass a Departmental Examination in specified period and in specified chances and failure to pass such Examination accordingly results in the termination of services. In would thus appear that there is an in built safeguard in the Rules themselves for testing the suitability of such Candidates for the job even after selection and that if it is found that they have still not acquired the proficiency and skill required for the job, their services are liable to be terminated. The interests of public service would not, therefore, suffer and the underlying object would not be frustrated by interpreting the Rule in the aforesaid manner. The foregoing discussion would show that the test adopted by the second respondent for demarcating the zone of choice in the present case is not violative either of the constitutional guarantee or of the relevant statutory rules. The present petition must, therefore, fail.

11. Rule discharged with no order as to costs.

12. Rule discharged.