Employees Provident Fund Organization & Anr. vs M/s Glass Palace & Anr.

KIRTI SINGH, J. (ORAL)

The present writ petition has been filed under Article 226/227 of the Constitution of India seeking quashing of the order dated 17.9.2014 (Annexure P-11), whereby appeal filed by respondent No. 1 under Section 7-I of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (for short ‘the Act of 1952’) has been accepted and the entire assessment made under Section 7-A of the Act has been set aside..

As per the pleaded facts, it was discovered by the squad of Enforcement Officers inspecting the premises of respondent No. 1 on 07.01.2011, that services of more than 20 employees had been engaged by the management. The squad met 36 employees and prepared a list containing their names, parentage, addresses, dates of joining and monthly salaries. The signatures of the said employees were obtained on the list. Out of the said employees, 10 employees gave written statements to the Enforcement Officers. The respondent-establishment supplied three additional lists containing details of 18, 28 and 10 employees, respectively, which were duly and stamped by its authorized representative. Subsequently, on the basis of the report of the Enforcement Officers, the list of employees and other material, it was found that the establishment had employed more than 20 employees for over four years. Accordingly, a coverage letter dated 25.01.2011 was issued calling upon the establishment to deposit statutory dues for 61 employees with respect to the period from January 2007 to July 2011. Upon failure of the respondent-establishment in doing the needful, assessment proceedings under Section 7-A of the Act of 1952 were initiated and summons dated 15.02.2011 were issued upon the respondent-establishment. During the said proceedings, the respondent-establishment only submitted the photocopies of the attendance register for the period w.e.f. April 2007 to March, 2011 and the salary sheets for the period w.e.f. January 2011 to June 2011, and pleaded that the establishment was coverable only w.e.f. 01.01.2011. After considering the record, calculations and statements of the representatives, the assessing authority passed the order dated 02.9.2011, issued vide Endst. No. C.1/PN/38981 dated 08.09.2011, determining Rs. 34,47,245/- as statutory dues payable by respondent No. 1 for the period from January 2007 to July 2011. Aggrieved by the said assessment order, respondent No. 1 filed an appeal before the Employees’ Provident Fund Appellate Tribunal. Vide impugned order dated 17.09.2014 (Annexure P-11), the said appeal was allowed and the entire assessment proceedings were set aside on the ground that the report of the Enforcement Officer had not been produced before the Tribunal, and that no opportunity had been given to the establishment to rebut the same. Moreover, on the application moved by respondent No. 1 and without affording an opportunity of hearing to the petitioner-organization, the order dated 17.9.2014, whereby the date 01.1.2007 has been ordered to be read as 01.1.2011, was amended on 18.11.2014. Aggrieved thereby, the petitioner has approached this Court by way of the present writ petition.

Learned counsel for the petitioner submits that the impugned order dated 17.09.2014 passed by the learned Appellate Tribunal is cryptic, non-speaking and has been passed without proper application of judicial mind. It is submitted that learned Appellate Tribunal has erred in accepting the appeal filed by the respondent-establishment and in setting aside the entire assessment merely on the ground that the report of the Enforcement Officer had not been produced before it. It is submitted that the said report was a part of the record available before the Assessing Authority, and could have accordingly been summoned from the competent authority instead of setting aside the entire assessment. It is further submitted that the learned Tribunal failed to appreciate that the onus to prove the illegality or otherwise of the order dated 02.9.2011 passed under Section 7-A of the Act of 1952 was on the respondent-establishment, which in fact failed to produce on record the entire records before the Appellate Tribunal. Moreover, the learned Appellate Tribunal even erred in changing the date of the application from 01.1.2007 to 01.1.2011 by its subsequent order dated 18.11.2014, without affording any opportunity of hearing to the petitioner-organization. Therefore, it is prayed that the impugned order deserves to be quashed and set aside.

Per contra, learned counsel for respondent No. 1 opposes the present petition and submits that there is no infirmity in the impugned order. It is further emphasized that a copy of the report prepared by the Enforcement Officers after their visit at the premises of respondent-establishment was in fact not even provided to the respondent-establishment. Therefore, it is contended that the appellate authority was justified in setting aside the liability wrongly imposed upon it.

I have heard learned counsel for the parties and perused the relevant material on record.

A perusal of the material on record reveals that the learned Appellate Tribunal set aside the entire assessment proceedings essentially on the ground that the report of the Enforcement Officer was not available before it. The record, however, indicates that the said report formed part of the material considered by the Assessing Authority during the proceedings under Section 7-A of the Act of 1952. In such circumstances, the learned Appellate Tribunal ought not to have set aside the assessment in its entirety merely on account of the non-availability of the said report before it. The appropriate course was to call for the complete assessment record, including the report of the Enforcement Officer, and thereafter adjudicate the appeal on merits after affording the respondent-establishment an effective opportunity to meet the material relied upon against it. The grievance regarding non-supply of the report could thus have been adequately addressed without annulling the entire assessment proceedings.

Accordingly, the impugned order dated 17.09.2014, as amended vide order dated 18.11.2014, is set aside. The matter is remanded to the learned Appellate Tribunal at Chandigarh for fresh consideration in accordance with law. The learned Appellate Tribunal shall call for the complete assessment record, including the report of the Enforcement Officer, ensure that a copy thereof is made available to the respondent-establishment, afford both parties due opportunity of hearing and thereafter decide the appeal afresh on its own merits, without being influenced by any observation made herein.

The petition stands disposed of as such.

Pending miscellaneous application(s), if any, shall also stand disposed of.