The judgement was delivered by a division bench of Chief Justice R Subhash Reddy and Justice V M Pancholi.
The report, prepared by the then agriculture minister Dilip Sanghani and accepted by Chief Minister Narendra Modi, downgraded Sharma's performance as Managing Director of Gujarat Sheep and Wool Development Corporation.
The Central Administrative Tribunal (CAT) had dismissed his petition on the issue, holding that there was nothing wrong with the process of preparation of appraisal report.
Sharma's contention was that Sanghani was not the competent authority who could evaluate his performance because he had not worked under the minister for the minimum period of 90 days, as required. While he had worked for 87 days, he was on leave for rest of the total of 142 days he served at the Corporation, Sharma said.
The government, however, insisted that Sharma had worked for 102 days at the Corporation.