Rajasthan Tax Consultants vs Union of India

This unusual litigation is pending since July 1997 under hope to have solution of the grievance which is being agitated herein. The distressing feature of this litigation is that the Union Government and the State Government are lacking coherence and co-ordination to solve the problem of providing residential accommodation to two members of the Tribunal at Jaipur Bench in spite of the fact that direct taxes revenue collected is shared between them. As stated in the petition, the State Government is the recipient and beneficiary of 70 per cent or so of the collection. The grievance agitated in the petition relates to providing official accommodation to the members of the Tribunal, Jaipur Bench more particularly, to its Judicial Member Shri R.K. Gupta. Presently, the Central Government does not have General Pool of residential accommodation in Jaipur and the State Government has been providing residential accommodation to the members of the Tribunal since establishment of its Bench at Jaipur in the year 1971. Since last two years or so, the situation is changed in the matter. This petition has been filed by the Rajasthan Tax Consultants Association. All India Federation of Tax Practitioner and M.C. Gookhru, General Secretary of Rajasthan Tax Consultants Association in public interest seeking issuance of writ of mandamus, directing the respondents to allot residential accommodation to the members of the Tribunal at Jaipur in keeping with their status and entitlement with other connected reliefs.

The Tribunal, in fact, is a judicial forum, constituted u/s 252 of the income tax Act, 1961. Its duties and functions are to be discharged in a judicial manner in consonance with the principles of natural justice. The members of the Tribunal are selected from the Judiciary, Legal and Accountancy profession and other different services like Indian Revenue Services (IRS), etc., considering their vast experience and knowledge. The Tribunal has its Head Office at Mumbai and Benches throughout the country. Jaipur Bench of the Tribunal came to be established in the year 1971 realising justification of the demand agitated from various quarters in the State. Presently, about 14,000 appeals are stated to be pending for decision before the Tribunal. The President of the Tribunal in his letter dated 12-2-1996 admits that Shri M.M. Bauxi, Judicial Member of Jaipur Bench had to be transferred from Jaipur as he could not secure a suitable residential house as per his entitlement and status either from the State Government or otherwise. It also transpires that on account of non-availability of official accommodation, no judicial officer was willing to be posted at Jaipur. When no Judicial Member was being appointed/posted and was functioning of Jaipur Bench came to standstill, a direction was given by this Court in S.B. Civil Writ Petition No. 1814 of 1997 to appoint a permanent Judicial Member within a period of three months and in pursuance to that order, Shri R.K. Gupta assumed charge on June 16, 1997. It also appears that Shri R.K. Gupta made an application for allotment of official accommodation from the State Pool but his request was turned down with a note that it was not possible to allot Government residential accommodation to members of the Tribunal. Similar was the fate of the application made by Shri Gupta to the Dy. Chief Minister. In these circumstances, the present petition came to be filed.

On 24-9-1997, Shri Bhanwar Bagri, appeared on behalf of the Union Government and a direction was given by this Court to make a house available to Shri Gupta, Judicial Member of the Tribunal befitting to his status and entitlement within a period of one month. This order was not complied with, on the other hand, the learned counsel appearing for the State Government and Union Government rather disputed their liability to provide official accommodation. Then this Court issued notice to respondent No. 1 to show cause as to why contempt proceedings be not initiated against him for non-compliance of the above order. It was also observed in the order that in the meantime, the respondents are free to make allotment of a house to the concerned officer as per his entitlement. Reply to this notice has been filed by respondent No. 1.

We have heard Shri A.K. Vali, the learned Standing Counsel for the Central Government, Shri N.M. Ranka for the petitioners and Shri J.S. Rastogi, Additional Advocate General for State of Rajasthan. Shri A.K. Vali, appearing for the Central Government has made following sub- missions :-

(i) Central Government does not have its any ''General Pool'' of residential accommodation at Jaipur and in order to provide official accommodation, it has to depend upon the State Government which is also beneficiary and recipient of larger share of revenue generated from direct taxes as such, the State Government should be directed to provide official residential accommodation as per past practice adhered to;

(ii) as per service conditions and Government orders, House Rent Allowance as per latest Fifth Pay Commission recommendations, Shri Gupta, who is in the rank of Additional Secretary to the Government of India and as per his entitlement, is entitled to 15 per cent of actual basic pay drawn. As Government residential accommodation/ General Pool accommodation is not available for him, he is entitled to get 15 per cent of his basic pay drawn as house rent allowance which comes to Rs. 3,429 per month. Hence, the Central Government owes no legal duty to provide official residential accommodation to Shri Gupta and he can only claim House Rent Allowance as per his entitlement;

(iii) in view of judgment in Shiv Sagar Tiwari v. Union of India 1997 (1) SCC 444 decided on December 23, 1996, there cannot be any out of turn allotment to Shri Gupta even after construction of house in ''General Pool'' at Jaipur;

(iv) ''General Pool'' residential houses are under construction at Jaipur and they are likely to be ready for allotment by March 1998 or so. Besides the Central Government Departments, namely, income tax and Central Excise Department have their own pool of accommodation and Shri Gupta can be provided a house from their Pool, provided an order is passed by this Court, if permissible, in terms of the aforesaid decisions;

(v) that notice of contempt be discharged in the facts and circumstances, particularly looking to the fact that the Law Secretary, Government of India has made all best efforts to get a residential house for allotment to Shri Gupta as is born out from the correspondence between him and the Chief Secretary, Government of Rajasthan, Secretary, Urban Development and Housing Department.

Shri J.S. Rastogi, Additional Advocate General appearing for the State of Rajasthan, contended that it was not feasible under the existing rules to allot any house to the members of the Tribunal. That Judicial Officers of Rajasthan are awaiting of their turn for allotment of houses since long and still there is a long queue. According to Mr. Rastogi, the Rajasthan Civil Service (Allotment of Residential Accommodation) Rules, 1958 do not permit allotment of accommodation to employees of Central Government even they may be working in Rajasthan.

We have given our careful consideration to the respective submissions.

At the cost of repetition, it may be stated that members of the Tribunal perform judicial functions while deciding appeals filed before it. They decide disputes between the assessee and the Revenue against the orders passed by various officers under the Act. Undisputedly, the Tribunal is an important judicial forum and its proper functioning is essential for expeditious disposal of appeals. Expeditious disposal of appeals is also necessary for early recovery of tax which is in dispute. No doubt the Judicial Member of the Tribunal is equivalent in rank to Additional Secretary to the Government of India and he is entitled House Rent Allowance @ 15 per cent of actual basic pay drawn by him as per Fifth Pay Commission Report. This amount has been calculated to be Rs. 3,429 per month by respondent No. 1 in its reply. However, it is a common case that this amount can hardly be sufficient to hire a good exorbiting house in view of prohibiting rent prevailing in Jaipur. This amount is too meagre even to get a house of two rooms set in a good colony. We are also of the view that primarily, it is for the Central Government to provide suitable residential accommodation to the members of the Tribunal while at the same time, the State Government is equally responsible to do so since it is the recipient of at least 70 per cent of the earnings from the revenue as a result of the decisions of the Tribunal. We are further of the view that it is not expected either from the Central or the State Government to compromise the position of members of the Tribunal particularly the Judicial Member by placing them in a harassing position with landlords/owners of private residential accommodations since that would not be befitting to their official position or status as holders of public office.

The question to provide residential accommodation to every Judicial Officer was considered by the Apex Court in All India Judges'' Association Vs. Union of India and others, and it was observed thus :

"Provision of an official residence for every judicial officer should be made mandatory. A judicial officer to work in a manner expected of him has to free himself from undue obligations of others, particularly owners of buildings within his jurisdiction who ordinarily may have litigations before him. This is mostly the case in rural areas where outstation judicial courts are located. We are aware of cases where a rural court is located in the building belonging to a lawyer or a client. Even the residential accommodation of the judicial officer belongs to people of that category. Such a situation often gives occasion to personal embarrassment to the judicial officer and it has to be avoided.

35.... A judicial officer who is not provided residential accommodation is obliged to go in for rented accommodation. In view of the prevailing rate of rent the smallest accommodation that can be taken may often cost 75 per cent to 100 per cent of the monthly salary, a situation which cannot be countenanced by any logic. It is absolutely necessary that appropriate conditions should be provided for the judicial officer and he should have reasonable mental peace in order that he may perform his duties satisfactorily. Rendering justice is a difficult job. It is actually a divine act. Unless the judicial officer has a reasonably worry free mental condition, it would be difficult to expect unsoiled justice from his hands.

37.... Providing adequate residential accommodation should be considered as a priority. Until adequate Governmental accommodation is available, it should be the obligation of the State at the instance of the High Court to provide requisitioned accommodation for every judicial officer according to his entitlement and recovery of not more than 121/2 per cent of salary of the officer towards rent should be made and the balance should be met by the State exchequer. We would emphasis the need of provision of a separate and exclusive office room as an indispensable component of every such official residence and the accommodation should take into account this feature."

The matter was reconsidered by the Supreme Court on review petitions filed by Union of India and various States raising some objections to the above decision which were decided on 24-8-1993, reported in 1993 (4) SCC 288 (sic). It was observed that Judges are not employees and as members of judiciary, they exercise the sovereign judicial power of the State. They are holders of public offices in the same way as the members of the Council of Ministers and the Members of the Legislature. Then in para No. 8 independence of judiciary was emphasised as under :

"8. This distinction between the Judges and the members of the other services has to be constantly kept in mind for yet another important reason. Judicial independence cannot be secured by making mere solemn proclamations about it. It has to be secured both in substance and in practice. It is trite to say that those who are in want cannot be free. Self-reliance is the foundation of independence. They so very has a stake in ensuring the independence of the judiciary, and no price is too heavy to secure it. To keep the Judges in want of essential accoutrements and, thus, to impede them in the proper discharge of their duties, is to impair and whittle away justice itself."

Dealing with the problem of residential accommodation of Judicial Officer, it was observed in para 41 :

"41.... The Governments have not so far shown any keen awareness of the problems faced by the Judges for want of accommodation and of the manner in which it affects the discharge of their duties. It is for these reasons that it was suggested that the Government should give top priority to the provision of residential accommodation to the Judges and construct enough houses with the requisite facilities."

In para 43, it was then reiterated :

"We now understand that the judiciary has been included as a plan subject by the Planning Commission. If this is so, the construction of adequate number of houses with the necessary facilities should be given the top priority being the most primary requirement of the Judges at any place. The provision of house rent allowance is not an answer much less a substitute for the adequate housing facility. In the judgment under review, it has been specifically emphasised that the provision of a separate and exclusive office room is an indispensable component of the official accommodation allotted to the judicial officer. In order to ensure that the quarters constructed for the judicial officer are of proper dimension and with adequate number of rooms, their future construction should be made in consultation with and under the supervision of the respective High Court and the High Court should take adequate interest in their construction."

When full compliance of the directions with regard to providing residential accommodation to judicial officers was not made and finding that the State Governments and Union Government were dragging their feet on the implementation of the directions, the Apex Court in its judgment in All India Judges'' Association and Others Vs. Union of India (UOI) and Others, gave the following directions :

"It should be made clear that when we state that quarters should be allotted to judicial officers on priority basis, the direction should be complied with in letter and spirit, and not by permitting special category allotments by-passing allotment to judicial officer. If despite the same sufficient quarters are not available from the common pool and it becomes necessary to requisition or hire private accommodation the State Government should direct the respective Collectorates to locate accommodation of the prescribed standard and allot the same to the judicial officers. In cases, where that is not done or is not possible for want of accommodation or even though the judicial officer is able to point out accommodation but for some valid reason it is not possible for the State Government to requisition or hire the same and the judicial officer is compelled to hire accommodation for himself, the rental in excess of what the judicial officer is entitled to by way of H.R.A. must be borne by the State Government provided the judicial officer intimates the State Government that on account of its default he has selected a house at a particular rent and would be occupying the same. If after such intimation, the State Government/Collectorate does not provide accommodation to the judicial officer within a month''s time, the judicial officer will be entitled to hire the house and the State Government will pay the rental in excess of the H.R.A. admissible to the judicial officers already in occupation of private accommodation. In the case of judicial officers already in occupation of private accommodation the same benefit should be extended to them also, namely, of payment of the excess amount for the accommodation. In order that the State Government may have reasonable time to comply with this direction, we direct that this order should be worked out as early as possible and will become effective from 1st August, 1995. It is needless to impress upon the State Governments that we expect scrupulous implementation of this order because by the dated 1-8-1995 more than reasonable time would have elapsed since the making of the order in the Review Application. A copy of this order will be sent to the Chief Secretary of every State Government who shall be personally responsible for the implementation of the order. Failure, if any, will invite drastic action."

It is true that the matter before the Supreme Court related to the members of judicial services, i.e., District Judges, etc., and technically the members of the Tribunal may not fall in that category but we are of the opinion that there is no reason that the directions given by the Apex Court should not be made applicable to the members of the Tribunals as for the purposes they are judicial officers and discharge judicial functions. Tribunal is an important wing which decides appeals arising from various orders passed by officers under the income tax Act. They have to decide matters involving crores of rupees and their independence has to be maintained. Their selection is made after considering their legal knowledge and vast experience. We are of the opinion that they should also be equally provided residential accommodation on priority basis like other judicial officers.

We can also conveniently reject contention of Shri Vali that members of the Tribunal can only claim House Rent Allowance payable to them as per the Rules. As held by the Apex Court in All India Judges Association''s case (supra), provision of House Rent Allowance is not an answer much less a substitute for the housing facility.

We are also of the opinion that the judgment in Shiv Sagar Tiwari''s case (supra) does not come in way in making out of turn allotment of house to the members of the Tribunal. In that case also, necessity of out of turn allotments has been accepted though it has been restricted to the extent of 5 per cent. In Shiv Sagar Tiwari''s case (supra), the Supreme Court was considering out of turn allotments of houses in Delhi and whatever observations made and directions given they have to be read with reference to the context.

We are at pains to express that the Union and the State Governments had not been very much serious in providing residential accommodation to the members of the Tribunal at Jaipur who continue to suffer for want of residential accommodation and are seeking excuses on technical ground with a view to escape from responsibility. After giving our anxious consideration to the fact that members of the Tribunal are judicial officers for all purposes as they discharge judicial functions and their independence should be maintained, we observe and direct as under :-

(i) The Union Government, through its Secretaries after negotiation with the State of Rajasthan through Chief Secretary shall take positive steps to solve the problem of residential accommodation of the members of the Tribunal at Jaipur at the earliest;

(ii) In case, the Union Government finds that it cannot get suitable accommodation from the State Government, it shall allot residential accommodation out of turn as and when houses in its General Pool accommodation at Jaipur are ready for allotment. We have been informed that the houses are likely to be ready for allotment by March 1998;

(iii) In case, it is felt that construction of houses in Central General Pool is likely to be delayed or in the meantime, any house in the income tax or Central Excise Colony falls vacant and is suitable as per entitlement of the members of the Tribunal, the same may be allotted to him as an intermediately step;

(iv) If suitable residential accommodation is not expected to be available in near future say, within three months from today, by any of the above means, the Central Government shall take steps to hire accommodation of the prescribed standard and allot the same to the members of the Tribunal. In that situation, the rent in excess of what the members are entitled to by way of HRA shall be borne out by the Union Government.

The matter be listed in Court on 4-5-1998 for compliance of the above directions with the hope and expectations that by that time, the problem of residential accommodation to the members of the Tribunal shall be solved. Presently, we discharge contempt notice issued by this Court vide order dated 24-10-1997 as we find that the Law Secretary, Government of India has taken steps to get a house for the Judicial Member of the Tribunal. However, it is not the end, as we expect that fresh directions given by us shall be complied with in letter and spirit.