JAY PRAKASH LALIT V. R.P.FUND COMMNR.

WP(C)/6871/2006

AI Insights

Jayprakash Lalit, a contractor supplying security personnel, approached the court to quash demand notices related to EPF dues. The notices were issued following an order under Section 7-A of the EPF Act, 1952, due to non-compliance with payment directives. The petitioner argued that the actions of the authorities were arbitrary and illegal. However, the court found that the petitioner had an alternative remedy under Section 7-I of the EPF Act, which was not utilized. Furthermore, the petitioner had not challenged the original order under Section 7-A, leading to the dismissal of the writ petition.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 726130 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 08-04-2016
• Assessment Year: misc
• Laws Referred To: Employees Provident Fund and Miscellaneous Provisions Act, 1952, Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Keywords: Arbitrary action; EPF dues; Legal provisions; Quash notice; Security Personnel; Writ petition
• Section: 8; 7(a); 7(I); 8-G

Judgement Text

"W.P.(C) No.6871 of 2006 05. 08.4.2016 Jayprakash Lalit, Vrs. R.P.F. Commissioner and another Heard the learned counsel for the petitioner. None represented the opposite party R.P.F. Commissioner. The petitioner has approached this court to quash the notice as contained in A nnexures-3 & 4 annexed to the writ petition. The case of the petitioner as per the pleading made in this writ petition is t hat he being a contractor who supplies security personnel to various organizations who are the principal employer and as such the principal employers are liable to make payment of EPF dues for the security personnel engaged by them, but they have caused delay in making payment. The petitioner has paid the EPF dues for the period from its coverage till the date and also file d the annual as well as monthly return for the period from 2002 to 2003, 2003 to 2004 & 2004 t o 2005. The petitioner received a summon dtd.14.7.2006 for demand of Rs.68,433/- and on enquir y the petitioner has found that another summon was issued on 14.7.2005 in the earlier address, both are contained in Annexure-3 & 4 respectively. It has been stated that when the representative of the petitioner had appeared before the opposite party no.2 to know about the summon and demand he was informed to deposit the said amount or else the petitioner would be arrested and the amount would be realized by bank attachment. The petitioner further states that the action of the authorities are highly ar bitrary, illegal and contrary to the provision of law and as such the demand notices as contai ned in Annexures-3 & 4 are liable to be quashed. Counter affidavit has been filed on behalf of opposite parties in which prelim inary objection regarding maintainability of the writ petition has been raised on the ground o f availability of alternative remedy of appeal as provided U/s.7-I of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter referred to as The Act, 1952). It has been stated therein that the petitioner establishment is covered under the provision of the Act, 1952 and as such required to comply the statutory provision as fram ed under the Act, failure has resulted into initiation of proceeding U/s.7-A of the Act and af ter providing sufficient opportunity of being heard to the petitioner an order U/s.7-A has bee n passed. The petitioner has been directed to comply with the said order but he remained silen t and as such the authorities have invoked the jurisdiction as conferred upon them U/s.8 of th e Act. It has further been stated that the Act is very well applicable to the petitio ner establishment and while proceeding was going on U/s.7-A of the Act, 1952, the Managing Pa rtner or the authorized representative was not bothered to submit the document in support of t heir stand and now at this stage they are challenging the demand notice. Hence in the light of this situation it has been submitted that the demand not ices as contained in Annexures-3 & 4 does not warrant any interference. It has been contended that the demand notices as contained in Annexures-3 & 4 are the subsequent order which has been issued when the authorities have not complied with the order passed U/s.7-A of the Act, 1952 and the petitioner without challenging the order U/s.7- A of the Act, 1952 cannot question the demand notices. Having heard learned counsel for the petitioner and from perusal of the materi al available on record it is evident that the petitioner has challenged Annexures-3 & 4 annexe d to the writ petition which are the summons issued on 14.7.2006 and 14.7.2005 respectively un der para 83 of the 2nd Schedule of Income Tax Act, 1961 informing the petitioner regarding cer tificate No.CC-40/05 dtd.15.6.2005 which has been instituted for recovery of sum of Rs.68,433/ - and accordingly the petitioner was directed to appear before the court on 10th March, 2006 a t 11 A.M. The petitioner instead of approaching before the authority as per the summon h as filed this writ petition on 10.5.2006 and accordingly notice was issued and an interim orde r has been passed restraining the authorities in taking coercive action in pursuance to annexu res 3 & 4 till the next date. The opposite parties have taken the ground of availability of alternative reme dy to file an appeal as per the provisions as provided U/s.7-I of the Act, 1952 but in the fac ts and circumstances of this case the said argument is not fit to be accepted since the statut e provides power to the party aggrieved to file appeal U/s.7-I of the Act before the Tribunal against the order passed U/s.7-A or U/s.7-B or U/s.7-C or U/s.14-B. The relevant provision is being quoted herein below for ready reference:- 7-I. Appeal to Tribunal.- (1) Any person aggrieved by a notification issued by the Central Government, or an order passed by the Central Government or any authority, under the proviso to sub-section (3), or sub-section (4), of section 1, or section 3, or sub-section (1) of section 7-A, or section 7-B [except an order rejecting an application for review refer red to in sub-section (5) thereof], or section 7-C, or section 14-B, may prefer an appeal to a Tribunal against such notification or order. (2) Every appeal under sub-section (1) shall be filed in such form and manner, within such time and be accompanied by such fees, as may be prescribed. Admittedly, in this writ petition the order passed U/s.7-A has not been challe nged as would be evident from the of the writ petition which is being referred herein below:- PRAYER- It is, in the circumstances, humbly prayed that your lordship may be g raciously pleased to admit the writ petition issue notice to the Opp. Parties to show cause as to why this writ petition shall not be allowed and if the Opp. Parties do not show cause or s how insufficient or false cause then after hearing the counsel for the parties be pleased to a llow the writ petition by quashing Annexure-3 & 4 and be pleased to pass any other or further order / orders as deem fit and proper in the facts and circumstances of the case. Thus, this plea of opposite parties is not fit to be accepted and is hereby re jected. So far as the merit of the case is concerned, the power has been conferred upo n the authorities of the Provident Fund under the Act, 1952 t determine the amount due from th e employers, the said power has been conferred U/s.7-A of the Act, 1952. The fact which transpires from the counter affidavit and the same has not been controverted by the petitioner since no response to the counter affidavit has been filed, it is evident that when the petitioner establishment has defaulted in making payment, a proceedi ng U/s.7-A of the Act, 1952 was initiated and an order was passed directing the petitioner es tablishment to deposit an amount of Rs.67,996/- along with interest component @ 12% per annum vide order passed in this regard on 15th December, 2004 with a direction to deposit the entire amount within 15 days but the order passed U/s.7-A has not been complied with by the petition er establishment and as such after expiry of the statutory period as contained in the order p assed U/s.7-A the authorities have resorted to the provision of Section 8 of t he Act, 1952 wh ich confers power upon them to recover the amount due from the employers and in view of the sa id provision the summons have been issued under para 83 of the 2nd Schedule to Income Tax Act, 1961, which power has been conferred U/s.8-G of the Act, 1952 which is being reproduced herei n below for ready reference:- 8-G. Application of certain provisions of Income-tax Act.- The provisions of t he Second and Third Schedules to the Income-tax Act, 1961 (43 of 1961), and the Income-tax (Ce rtificate Proceedings) Rules, 1962, as in force from time to time, shall apply with necessary modifications as if the said provisions and the rules referred to the arrears of the amount me ntioned in section 8 of this Act instead of to the income-tax: Provided that any reference in the said provisions and the rules to the assess ee shall be construed as a reference to an employer as defined in this Act. The said summon has been challenged in this writ petition. Now the question ar ises as to whether the consequence of an order can be quashed without challenging the original order, because in this case the summons have been issued under para 83 of 2nd Schedule of Inc ome-tax Act, 1961 after invoking the power conferred U/s.8-G of the Act, 1952 which provides p ower of recovery of money due to the employer and the admitted position is that the dues have been determined by the authorities in exercise of power conferred U/s.7-A of the Act, 1952, he nce this court cannot quash the summon which is the consequence of the original order passed U /s.7-A of the Act, 1952 having not been quashed. Moreover from the pleading it is evident that the petitioner has not made any reference about the order passed U/s.7-A of the Act, 1952 and the writ petition has been filed challenging the summons to show to this court that there is no basis to issue the said summon , but in the counter affidavit the facts have been clarified by stating therein that the summo ns have been issued U/s.8 of the Act, 1952 which is in consequence of the order passed U/s.7-A . Thus the petitioner has suppressed the material facts from this court and it i s settled that if the aggrieved party is not approaching the extraordinary jurisdiction of thi s Court conferred under Article 226 of the Constitution of India with clean hand, rather by su ppression of material facts hence the writ petition is liable to be dismissed and for the reas ons that the petitioner has challenged the summon without challenging the order passed U/s.7-A of the Act, 1952 and suppressing the material fact from this court as discussed herein above, hence this writ petition is fit to be dismissed. Accordingly, the writ petition is dismissed. ... S.N. Prasad, J. mkp 1 "