S. Osborne Kharjana And 29 Ors. vs. The Union Of INDIA And 3 Ors.

Held

The Court held that the decision to shift the Chief Commissioner's Office from Shillong to Guwahati was a policy decision of the Central Government, taken in public interest for better administration and efficiency in the North Eastern States, particularly in light of the Goods and Services Tax (GST) regime. The Court found no illegality or arbitrariness in the action, citing various Supreme Court and High Court judgments that emphasize that policy decisions are generally not subject to judicial review unless vitiated by mala fides or illegality. The Court noted that the re-organization was aimed at strengthening the organizational structure to cater to the new tax regime. Regarding the petitioners' concerns about dislocation, the Court directed that concerned staff be given the option to opt for Guwahati or be accommodated in other Central Excise and Customs Offices in Shillong to avoid forced dislocation. The writ petition was dismissed as being devoid of merit.

Facts

The petitioners, employees of the Chief Commissioner's Office (CCO) of Central Excise and Service Tax, Shillong, filed a writ petition challenging Notification No. 13/2017 Central Excise (N.T) dated 09.06.2017 and Circular No. C. No. II (39) 04/ET/CCO/SH/2019 dated 20.02.2019. These documents directed the shifting of the CCO from Shillong to Guwahati. The petitioners argued that this action violated the Central Excise Rules, 2002, adversely affected them, and amounted to changing their terms of appointment. They also contended that the decision was not in accordance with approved proposals and that the Shillong office, established by an administrative order in 2003, had not been formally closed or merged.

Key Issues

1. Whether the impugned Notification dated 09.06.2017 and Circular dated 20.02.2019, directing the shifting of the Chief Commissioner's Office from Shillong to Guwahati, are in violation of the Central Excise Rules, 2002, and thus liable to be quashed. (Petitioner's contention: The shifting is arbitrary and illegal as it violates Rule 3(1) and Rule 3(2) of the Excise Rules, 2002, and the Joint Commissioner acted in excess of jurisdiction. Revenue's contention: The decision is a policy decision of the Central Government, not subject to judicial review, aimed at reorganizing formations for the GST regime and strengthening the organizational structure for efficient service delivery in the North Eastern States, with the approval of the Finance Minister.) 2. Whether the impugned actions are vitiated by illegality or arbitrariness, considering the establishment of the Shillong office and the absence of a specific order for its closure or merger. (Petitioner's contention: The Shillong office was established by an administrative order and continues to exist in law as it has not been specifically annulled, closed, or merged. Revenue's contention: The re-organization was a policy decision taken to effectively support the GST rollout and enhance efficiency in the North Eastern States.)