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Judgment
Subhash B. Adi
Petitioner - Trust has sought for quashing of: the order passed by the first respondent dated 31st October 2005 produced at Annexure 10; the order dated 4/10.10.2006 passed by the second respondent produced at Annexure ''M''; the order passed by the Employees'' Provident Fund Appellate Tribunal, New Delhi, in ATA No. 594(6)/2007 dated 05.07.2011 produced at Annexure ''R'' and for quashing of the consequential order passed by respondent No. 1 dated 23.08.2011 produced at Annexure ''S''. The facts, which are not in dispute are that the petitioner was issued show cause notice dated 15.10.2003 by the Assistant Provident Fund Commissioner, produced at Annexure ''F'' inter alia alleging that the petitioner - Trust is running an educational institution and has engaged more than 19 employees with effect from: 01.04.2001 and as such, the said establishment is covered under the Provident Fund Scheme (for short ''the scheme''). However, the Trust has failed to make the contribution under the Employees Provident Fund and Miscellaneous Provisions Act and Scheme, 1952 (hereinafter referred to as ''the Act'') and accordingly, the petitioner was called upon to show cause.
The said show cause notice was suitably replied by the petitioner. Thereafter, the original authority passed the order dated 31.10.2005 as per Annexure ''K'' inter alia observing that the petitioner - Trust is liable to pay Rs. 6,45,946/-towards provident fund contribution and penalty etc., within 15 days along with interest u/s 7Q of the Act and damage u/s 14B of the Act.
The petitioner filed a review application u/s 7B of the Act on 13.01.2006 produced at Annexure ''L'' and the said application also came to be rejected by the second respondent by order dated 4/10.10.2006 as per Annexure ''M'' Consequently, the petitioner filed an appeal before the Employees Provident Fund Appellate Tribunal in ATA No. 594(6)/2007. The said appeal also came to be rejected by order dated 5th July 2011. Hence, the petitioner being aggrieved by these orders, has filed this petition.
Learned senior counsel for the petitioner submits that, the petitioner is a charitable Trust. It is running an educational institution, the charitable educational institutions are not covered under the scheme. The Provident Fund Organization had issued a show cause notice only in respect of educational institutions run by the petitioner. As such, the proceedings initiated in pursuance of the show cause notice were vitiated as the educational institutions are exempted. Nextly, he contended that the persons working in the Trust are all retired bank employees, have attained age of 55 years or 58 years. Thereafter, they have been working in the petitioner - Trust for honorarium. The definition of the Provident Fund Scheme does not include retired employees and there was no need to make any contribution in respect of such employees. Further, it was contended that even if they are treated as employees of the Trust, the number of employees of the Trust does not come under the purview of the Scheme. However, neither the original authority nor the appellate authority has considered this aspect of the matter, as a result, both these authorities have held that the petitioner - Trust is liable to make contribution of provident fund.
On the other hand, the Learned Counsel appearing for the respondent - Provident Fund organization submitted that against the show cause notice, petitioner has caused his reply, the original authority, considering the same, has passed the order. Against the said order, review application was filed and the same also has been rejected. Thereafter, the appellate authority has also rejected the appeal filed by the petitioner. Hence, there is no scope for further enquiry.
However, the Learned Counsel submitted that the show cause notice did not refer to any other institution except the educational institution, and submitted that in the impugned order of the original authority, there is no consideration of the legal issue as to whether the petitioner - Trust is legally covered under the Provident Fund Scheme or not. The original authority has also not considered as regard to whether for the excluded employees, the Provident Fund Scheme is applicable and if the excluded employees are excluded from the number of employees, whether the Trust is covered under the Scheme as the show cause notice does not refer to other employees. Learned Counsel had also contended that the issue of jurisdiction itself has not been considered.
Considering these contentions, it appears from the order passed by the original authority as well as the appellate authority that both these authorities have not considered the relevant legal questions raised by the petitioner, particularly, in reference to whether the Trust is covered under the Scheme, whether the retired employees, who have been working for honorarium in the petitioner-Trust are excluded employees, whether the educational institution is also covered under the scheme, if not, whether the employees of the educational institution are also included for the purpose of seeking contribution. The above issues should have been considered by the original authority. Though the matter had gone to the appellate authority, the appellate Tribunal has also not taken into consideration the said issues. Hence, In my opinion, the ends of justice would be met if the impugned orders are quashed and direction is issued to respondent No. 1, the original authority to reconsider the matter once again in pursuance of the show cause notice and petitioner to file reply to the said show cause notice.
Accordingly, the order passed by respondent No. 1 dated 31.10.2005 produced at Annexure ''K'' and the order passed by the second respondent dated 4/10.10.2006 produced at Annexure ''M'' and the order passed by the Employees Provident Fund Appellate Tribunal in ATA No. 594(6) 2007 dated 05.07.2011 produced at Annexure ''R'' and the consequential order passed by the 1st respondent dated 23.08.2011 produced at Annexure ''S'' are quashed. However, it is made clear that the petitioner shall file his treating the show cause notice issued by respondent No. 1 dated 15.10.2003 produced at Annexure ''F'' is for all the institutions run by the petitioner. If the petitioner files his reply, the first respondent is directed to consider the same in accordance with law and dispose of the same as early as possible not later than three months from the date of such reply given by the petitioner. The petitioner shall file its reply as early as possible not later than two weeks from the date of receipt of copy of this order.