Upgraded pay scales operate in rem and apply notionally from 01.01.1996 to all similarly situated employees.

The applicants are serving and retired Inspectors and Superintendents of the Central Tax and Customs Department.

Historically, these officers enjoyed pay parity with their counterparts in the CBI and IB.

Following the 4th Central Pay Commission (CPC), parity was disrupted as CBI/IB Inspectors received higher scales (Rs. 2000–3200), while Central Excise Inspectors remained at Rs. 1640–2900.

After prolonged agitation, the Ministry of Finance issued an Office Memorandum (OM) dated 21.04.2004, upgrading the scales to Rs. 6500–10500 and Rs. 7500–12000, but only with prospective effect.

Previous litigations before the Kolkata High Court led to the formation of a Special Anomaly Committee, which recommended that the upgraded scales be applied notionally from 01.01.1996 (the start of the 5th CPC) and actually from 21.04.2004.

While the Government implemented this for the Central Board of Direct Taxes (CBDT) and specific litigants in the Central Board of Indirect Taxes and Customs (CBIC), the 2nd Respondent issued a letter dated 16.06.2025 restricting these benefits strictly to the parties named in those court orders.

The applicants challenged this selective implementation, seeking parity as similarly situated employees.

1. Whether the Original Applications (OAs) are maintainable despite the respondents' objections regarding limitation, jurisdiction, and the lack of a personal cause of action

2. Whether the judicial decisions granting notional pay fixation from 01.01.1996 are judgments in rem, entitling all similarly situated employees to the same benefit regardless of whether they were parties to the original litigation

3. Whether the applicants are entitled to notional fixation from 01.01.1996 and actual monetary benefits from 21.04.2004

Principle of Equality under Article 14 of the Constitution of India, which prohibits arbitrary discrimination among identically situated employees.

Benefits arising from the determination of a common service condition for a class of employees must be extended to the entire class as a judgment in rem (State of Karnataka v. C. Lalitha [(2006) 2 SCC 747]).

Section 21 of the Administrative Tribunals Act, 1985, noting that pay fixation constitutes a recurring cause of action and that "fence-sitters" should not be penalized for not litigating if the issue is a matter of settled law (K.L. Shephard v. Union of India [(1987) 4 SCC 431]).

The Tribunal first dismissed the respondents' preliminary objections, ruling that the 16.06.2025 communication, which denied the class-wide application of pay benefits, created a fresh cause of action.

On the merits, the court noted that both CBDT and CBIC operate under the same Department of Revenue; therefore, the recommendations of the Special Anomaly Committee (accepted for CBDT) must apply uniformly to CBIC to avoid violating Article 14.

The Tribunal rejected the "judgment in personam" argument, stating that when a court resolves a general anomaly for a cadre, the state as a "model employer" should implement the relief for all similarly situated staff without forcing every individual to litigate.

It found that the applicants were identically situated to the successful litigants in the Hyderabad, Kolkata, and Jaipur Bench cases, and thus entitled to the same relief.

It held that the judgments were in the nature of judgments in rem.

Refix the applicants' pay in the grades of Inspector and Superintendent with effect from 01.01.1996 as per the CCS (Revised Pay) Rules, 1997.

Grant consequential benefits on a notional basis from 01.01.1996 and on an actual monetary basis from 21.04.2004.

Include all consequential benefits, including revised pensionary benefits for retired applicants, to be completed within two months.