KARNATAKA STATE ROAD TRANSPORT V. THE DEPUTY LABOUR COMMISSIONER

WP/23184/2015

AI Insights

The case involves the Karnataka State Road Transport Corporation (petitioner) and Abdul Wahab (respondent), who was an employee entitled to gratuity upon retirement. The dispute arose when the gratuity amount was not settled by the petitioner, leading the respondent to approach the Controlling Authority under the Payment of Gratuity Act. The Controlling Authority ordered the petitioner to pay a specific amount with interest, which was partially upheld by the Appellate Authority. The petitioner challenged this in the High Court, arguing for a deduction of income tax from the gratuity amount. The court's decision modified the earlier orders to account for the tax deduction and confirmed the payment made by the petitioner.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 745926 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 20-06-2019
• Assessment Year: misc
• Other Referred Cases: W.P.No.5759/2006
• Laws Referred To: Payment of Gratuity Act, Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: SRIDHAR HEGDE; M K METRI; K SRINIVASA
• Assessee Lawyers: RENUKA R
• Keywords: Appellate Authority; Controlling Authority; Gratuity; Income tax deduction; Payment of Gratuity Act
• Section: 226; 227

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF JUNE, 2019 BEFORE THE HON’BLE MR. JUSTICE P.B.BAJANTHRI WRIT PETITION NO.23184 OF 2015 (L-PG) BETWEEN: KARNATAKA STATE ROAD TRANSPORT CORPORATION, BANGALORE CENTRAL DIVISION, K.H. ROAD, SHANTHINAGAR BENGALURU BY ITS DIVISIONAL CONTROLLER, REPRESENTED BY ITS CHIEF LAW OFFICER ... PETITIONER (BY SMT. RENUKA H R , ADV.,) AND: 1. THE DEPUTY LABOUR COMMISSIONER AND APPELLATE AUTHORITY UNDER THE PAYMENT OF GRATUITY ACT REGION 1, KARMEEKA BHAVANA, BANNERGHATTA ROAD BENGALURU - 560 029. 2. THE ASSISTANT LABOUR COMMISSIONER AND CONTROLLING AUTHORITY UNDER THE PAYMENT OF GRATUITY ACT DIVISION-4, KARMEEKA BHAVANA, BANNERGHATTA ROAD BENGALURU – 560 029. 3. ABDUL WAHAB S/O ABDUL GAFFAR AGED ABOUT 65 YEARS 14TH MAIN, THALLAMSETTY APARTMENT N.S PALYA, BENGALURU – 560 076. ... RESPONDENTS (BY SRI. SRIDHAR N. HEGDE. HCGP FOR R-1, R-2; 2 SRI. M.K. METRI, AND SRI K. SRINIVASA, ADVs., FOR R-3) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDERS PASSED BY THE R-1 DATED 3.3.2015 VIDE ANNEXURE –C AND ETC. THIS PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING: ORDER In the instant petition, the petitioner has assailed the order dated 03.03.2015 of the Deputy Labour Commissioner–cum – the Appellate Authority under the Payment of Gratuity Act, Bengaluru. 2. Respondent No.3 was working with the petitioner-Karnataka State Road Transport Corporation. After his retirement, gratuity amount was not settled. Consequently, he was compelled to approach the competent authority by making application. The Controlling Authority proceeded to pass an order in favour of respondent No.3 directing the petitioner to pay a sum of Rs.86,815/- along with interest at 6% per annum from 22.6.2009 to 26.09.2011, which was 3 quantified at Rs.11,720/- and in all a sum of Rs.98,535/-. 3. Aggrieved by the order of the Controlling Authority, the petitioner preferred an appeal before the Appellate Authority. The Appellate Authority passed an order on 3.3.2015 while modifying the order rejected the petitioner’s appeal in part. Hence, the present writ petition. 4. Learned counsel for the petitioner submitted that the petitioner is required to deduct income tax in terms of the Income Tax Act on the gratuity amount. Respondent No.3 is entitled to gratuity amount in a sum of Rs.4,04,412/-, for which with reference to various slabs, deduction of Rs.3,17,597/- was ordered. Thus, respondent No.3 is entitled to a sum of Rs.30,784/- along with interest at 6% per annum from 22.06.2009 to 26.09.2011. The same has not been appreciated by both the Controlling and the Appellate Authority. The learned counsel has also cited a decision in support of 4 deduction of income tax passed in W.P.No.5759/2006, disposed of on 26.6.2012. 5. Per contra, learned counsel for the respondent fairly submitted that the petitioner is entitled to deduct the income tax if the amount of gratuity is over and above the ceiling limit. 6. Accordingly, the order of the Controlling Authority is modified to the extent that respondent No.3 is entitled to a sum of Rs.30,784/- along with interest at 6% per annum for the period from 22.6.2009 to 26.9.2011. In this regard, the learned counsel for the petitioner submitted that whatever the due after deduction of income tax, respondent No.3 has been paid the gratuity. During the pendency of the present petition, the petitioner is stated to have been deposited a sum of Rs.98,535/-. Therefore, respondent No.3 is entitled for difference of amount after deduction of Rs.30,784/- along with the interest at 6% per annum. If the law provides for refund of deducted income tax in 5 favour of respondent No.3, the respondent is at liberty to make a necessary application before the competent authority. 7. In view of the above observations, the writ petition is disposed of. Sd/- JUDGE SA "