Upgraded pay scales must apply notionally from the effective date for all similarly situated employees.

The applicants were employed as Inspectors and Superintendents in the Central Excise and Customs Department between January 1, 1996, and April 21, 2004.

Following the 5th Central Pay Commission (CPC) recommendations, the pay scales for Inspectors/Preventive Officers were revised to Rs. 6500–10500 and for Superintendents/Appraisers to Rs. 7500–12000.

The respondents made these revised scales effective from April 21, 2004, rather than the date of the 5th CPC’s implementation on January 1, 1996.

Despite favorable rulings by various Benches of the Tribunal, High Courts, and the Supreme Court granting retrospective notional fixation to similarly situated employees, the respondents denied the same to the applicants via impugned speaking orders dated June 25, 2024, and July 25, 2024.

The respondents contended the claim was barred by limitation under Section 21 of the Administrative Tribunals Act, 1985, and that the applicants were "fence-sitters".

1. Whether the applicants are entitled to the benefit of notional fixation of the upgraded pay scales with effect from January 1, 1996, and actual monetary benefits from April 21, 2004.

2. Whether the present Original Application is barred by the doctrine of delay and laches or if the matter constitutes a recurring cause of action.

3. Whether judicial precedents granting such pay scales operate in rem (applicable to all similarly situated persons) or in personam (restricted to the original litigants).

Article 14 of the Constitution of India mandates that similarly situated persons must be treated equally in service jurisprudence.

State of Karnataka v. C. Lalitha, establishing that service benefits granted to one set of employees must be extended to others similarly placed.

K.C. Sharma v. Union of India, which directs the grant of benefits to bring employees on par with peers to avoid discrimination.

Delhi High Court in W.P.(C) No. 15760/2023, holding that when the government accepts Pay Commission recommendations, it cannot arbitrarily restrict actual benefits, and such claims are not barred by laches if the delay arose from awaiting judicial finality in similar matters.

Lt. Col Suprita Chandel v. Union of India, noting that non-litigants should not be penalized for not approaching the court earlier.

The Tribunal observed that the Central Board of Direct Taxes (CBDT) had already implemented notional fixation from January 1, 1996, for its Inspectors based on a Special Anomaly Committee’s recommendation.

Since both CBDT and the Central Board of Indirect Taxes and Customs (CBIC) function under the same Department of Revenue, the Tribunal found no justification for denying the same benefit to CBIC employees.

The Tribunal rejected the respondents' argument on limitation, concurring with the Delhi High Court that pay fixation is a recurring issue and that the respondents were expected to extend benefits to all similarly situated employees once the legal position was settled by the Supreme Court.

It held that previous judgments on this specific pay scale anomaly were judgments in rem, as they addressed a general policy grievance affecting a class of employees.

Restricting the benefit only to those who litigated earlier was deemed arbitrary and a violation of Article 14.

The applicants are entitled to notional pay fixation in the revised grades with effect from January 1, 1996, and actual monetary benefits (including arrears and pensionary refixation) from April 21, 2004.

The respondents were directed to complete the refixation exercise within two months.

No order was made as to costs.