IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN MONDAY, THE 19TH JULY 2010 / 28TH ASHADHA 1932 WA.No. 1020 of 2010() --------------------- AGAINST THE JUDGEMENT IN WPC.11488/2009 .................... APPELLANTS/RESPONDENTS 1 TO 3 IN WPC. ---------------------------------------- 1. STATE OF KERALA, REP.BY THE PRINCIPAL SECRETARY, FINANCE DEPARTMENT, GOVERNMENT SECRETARY, THIRUVANANTHAPURAM. 2. THE DEPUTY DIRECTOR OF COLLEGIATE EDUCA- TION, OFFICE OF THE DEPUTY DIRECTOR OF COLLEGIATE EDUCATION, KOTTAYAM. 3. THE TREASURY OFFICER, DISTRICT TREASURY OFFICE, PATHANAMTHITTA. BY SR. G.P. SRI.N.MANOJ KUMAR RESPONDENTS/PETITIONERS & 4TH RESPONDENT IN THE WPC. --------------------------------------------------------- 1. LILLY GEORGE, AGED 53 YEARS, W/O. ABRAHAM MATHEW, LECTURER SELECTION GRADE, DEPARTMENT OF PHYSICS, CATHOLICATE COLLEGE, PATHANAMTHITTA - 689 645 PIN. 2. ROSHINI CHERIAN, AGED 54 YEARS, W/O. DR.EAPEN VARGHESE, LECTURER SELECTION GRADE, DEPARTMENT OF ENGLISH, CATHOLICATE COLLEGE, PATHANAMTHITTA - 689 645 PIN. 3. ELSAMMA THOMAS AGED 53 YEARS, W/O.K.V.TH OMAS,LECTURER SELECTION GRADE, DEPARTMENT OF ENGLISH, CATHOLICATE COLLEGE, PATHANAMTHITTA - 689 645 PIN. 4. REGI VARGHESE, AGED 49 YEARS, S/O. P.VARGHESE,,LECTURER SENIOR SCALE, DEPARTMENT OF ENGLISH, CATHOLICATE COLLEGE, PATHANAMTHITTA - 689 645 PIN 5. MARY MATEHW, AGED 45 YEARS,W/O.GEORGE ZACHARIA,LECTURER SELECTION GRADE, DEPARTMENT OF ENGLISH, CATHOLICATE COLLEGE, PATHANAMTHITTA - 689 645 PIN 6. LATA MARINA VARGESE, AGED 45 YEARS, W/O.FR,.IDICULLA CHABDY,,LECTURER SELECTION GRADE, DEPARTMENT OF ENGLISH, CATHOLICATE COLLEGE PATHANAMTHITTA - 689 645 PIN 7. FR.GEORGE MATHEW, AGED 50 YEARS, S/O.V.M.GEORGE,LECTURER SELECTION GRADE, DEPARTMENT OF ENGLISH, CATHOLICATE COLLEGE PATHANAMTHITTA - 689 645 PIN. 8. DR.MATHEW P.JOSEPH, AGED 44 YEARS, S/O.P.M.JOSEPH, LECTURER ,SELECTION GRADE DEPARTMENT OF ENGLISH, CATHOLICATE COLLEGE PATHANAMTHITTA - 689 645 PIN. 9. SUSAMMA SAMUEL, AGED 53 YEARS, W/O PHILIP MATHEW, LECTURER ,SELECTION GRADE DEPARTMENT OF MALAYALAM CATHOLICATE COLLEGE PATHANAMTHITTA - 689 645 PIN. 10. DR.B.PRABHULLA CHANDRAN PILLAI, AGED 53 YEARS, S/O.V.N.BALAPPAN PILLAI, LECTURER ,SELECTION GRADE DEPARTMENT OF MALAYALAYM , CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN. ªª 11. SHIRLY THOMAS, AGED 51 YEARS, W/O. A.E.JACOB,LECTURER ,SELECTION GRADE DEPARTMENT OF MALYALAM CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN. 12. R.BHADRAN PILLAI, AGED 49 YEARS, S/O.S.RAGHAVAN PILLAI,LECTURER ,SELECTION GRADE DEPARTMENT OF MALYALAM CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN. 13. ANU.P.T. AGED 33 YEARS, W/O.FR.JOHN PHILIPOSE,LECTURER ,SELECTION GRADE DEPARTMENT OF MALYALAM CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN. 14. DR.K.J.MATHEW, AGED 53 YEARS, S/O.T.M.JOHN,,LECTURER,SELECTION GRADE DEPARTMENT OF HINDI CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN. 15. MARIAMMA V.MATHEW, AGED 50 YEARS, W/O.K.V.PATHORSE, LECTURER SELECTION GRADE DEPARTMENT OF HINDI, CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN. 16. DR.C.SWAMINATHAN, AGED 55 YEARS, S/O.CHELLAPPAN ACHARI, LECTURER SELECTION GRADE DEPARTMENT OF HINDI CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN. 17. DR.JANCY THOMAS, AGED 45 YEARS, W/O.GEORGE V,MATHEW, LECTURER SELECTION GRADE DEPARTMENT OF HINDI CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN. 18. DR.MARY VARGHESE, AGED 47 YEARS, W/O. FR.ABRAHAM GEORGE, LECTURER SELECTION GRADE DEPARTMENT OF HINDI CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN. 19. DR.MINI GEORGE, AGED 42 YEARS, W/O.DR.KOSHY P.GEORGE, LECTURER SELECTION GRADE DEPARTMENT OF HINDI CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN. 20. FR.KURIAN DANIEL, AGED 48 YEARS, D/O.DANIEL, LECTURER SELECTION GRADE, DEPARTMENT OF SYRIAC CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN 21. FR.P.T.JOHN, AGED 49 YEARS,S/O. THOMAS SAMUEL, LECTURER SELECTION GRADE DEPARTMENT OF SYRIAC CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN 22. ELIZABETH JOSHUA, AGED 54 YEARS, W/O.C.K.JOSEPH, LECTURER SELECTION GRADE DEPARTMENT OF HISTORY CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN 23. K.V.THOMAS, AGED 52 YEARS, S/O.THOMAS VARGHESE, LECTURER SELECTION GRADE, DEPARTMENT OF HISTORY, CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN 24. SMITHA SARA PADIYARA, AGED 32 YEARS, W/O.THOMAS GEORGE, LECTURER SELECTION GRADE DEPARTMENT OF HISTORY, CATHOLICATE COLLEGE, PATHANAMTHITTA-689 645 PIN 25. DAISY MATHEW, AGED 52 YEARS, D/O.V.O. MATHEW, LECTURER SELECTION GRADE DEPARTMENT OF ECONOMICS CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN 26. SHYNI T.ALEXANDER,AGED 32 YEARS, W/O.BINU BABY, LECTURER, DEPARTMENT OF ECONOMICS,CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN 27. P.VILZON KOSHY, AGED 53 YEARS, S/O.KOSHY THOMAS, LECTURER SELECTION GRADE DEPARTMENT OF COMMERCE, CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN 28. A.V.THOMAS, AGED 52 YEARS, S/O.A.T VARGHESE, LECTURER SELECTION GRADE DEPARTMENT OF COMMERCE CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN 29. T.I.ANDREWS, AGED 51 YEARS,S/O.KURIAN ISSAC, LECTURER SELECTION GRADE DEPARTMENT OF COMMERCE, CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN 30. SALI THOMAS, AGED 50 YEARS, W/O.ISAC ABRAHAM, LECTURER SELECTION GRADE DEPARTMENT OF COMMERCE CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN 31. ALEXANDER V.GEORGE, AGED 48 YEARS, S/O.REV.GEORGE ZACHARIAH, LECTURER SELECTION GRADE DEPARTMENT OF MATHEMATICS, CATHOLICATE COLLEGE, PATHANAMTHITTA-689 645 PIN 32. RAJU VARGHESE, AGED 50 YEARS,S/O. P.V.VARGHESE,LECTURER SELECTION GRADE DEPARTMENT OF MATHEMATICS, CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN 33. K.O,RAJU, AGED 47 YEARS,S/O.OONNOONNY ,LECTURER, SENIOR SCALE, DEPARTMENT OF MATHEMATICS, CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN 34. RENNY P.VARGHESE, AGED 36 YEARS, S/O.P.V.BABY,,LECTURER SELECTION GRADE DEPARTMENT OF MATHEMATICS, CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN 35. SUSHA D,AGED 38 YEARS, W/O.P.N.HARIKUMAR LECTURER SELECTION GRADE DEPARTMENT OF MATHEMATICS, CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN 36. DAIS GEORGE, AGED 40 YEARS, W/O.SAJIMON ABRAHAM,,LECTURER SELECTION GRADE DEPARTMENT OF MATHEMATICS, CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN 37. DR.M.J.ELIZABETH, AGED 51 YEARS, W/O.BABU K.KOSHY, READER DEPARTMENT OF ZOOLOGY, CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN 38. WILSON VARKEY, AGED 59 YEARS, S/O. P.T.JOSHN, LECTURER,SELECTION GRADE,DEPARTMENT OF ZOOLOGY, CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 39. DR.P.THOMAS JOHN, AGED 52 YEARS, S/O.P.T.JOSHN, LECTURER, SELECTION GRADE, DEPARTMENT OF ZOOLOGY, CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 40. DR.MANU OOMMEN, AGED 49 YEARS, S/O.M.K.OOMMMEN,READER DEPARTMENT OF ZOOLOGY, CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN 41. THOMAS JOHN, AGED 53 YEARS, S/O.JOHN, LECTURER, SELECTION GRADE, DEPARTMENT OF PHYSICS CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN 42. VALSAMMA M.SAMUEL, AGED 52 YEARS, W/O.K.GEORGE VARGHESE, LECTURER, SELECTION GRADE, DEPARTMENT OF PHYSICS CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 PIN-689 645 43. M.J.KURIAN, AGED 51 YEARS, S/O.KURIAN JOSEPH, LECTURER, SELECTION GRADE, DEPARTMENT OF PHYSICS CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 44. DR.GEORGE VARGHESE, AGED 51 YEARS, S/O.OOMMEN GEEVARGHESE, READER, DEPARTMENT OF PHYSICS CATHOLICATE COLLEGE PATHANAMTHITTA -689 645 45. ELIZABETH GEORGE, AGED 50 YEARS, W/O.DR.JOSEPH MATHEWS,LECTURER SELECTION GRADE DEPARTMENT OF PHYSICS,CATHOLICATE COLLEGE PATHANAMTHITTA -689 645 46. RACHEL THOMAS, AGED 50 YEARS, W/O.GEORGE KOZHY,LECTURER, SELECTION GRADE, DEPARTMENT OF PHYSICS,CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 47. JOHN VARGHESE, AGED 50 YEARS, S/O.IDICULLA VARGHESE, LECTURER, SELECTION GRADE, DEPARTMENT OF PHYSICS CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 48. KUNJAMMA JOHN, AGED 54 YEARS, W/O.JOSEPH ZACHARIA, LECTURER, SELECTION GRADE, DEPARTMENT OF CHEMISTRY,CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 49. RACHEL P.MATHEW, AGED 52 YEARS, W/O.THOMAS VARGHESE, LECTURER, SELECTION GRADE, DEPARTMENT OF CHEMISTRY,CATHOLICATE COLLEGE PATHANAMTHITTA-689 645 50. MARIAMMA ISSAC, AGED 53 YEARS, W/O.K.C.JACOB, LECTURER, SELECTION GRADE, DEPARTMENT OF CHEMISTRY, CATHOLICATE COLLEGE, PATHANAMTHITTA 689 645 PIN. 51. BABU.K.KOSHY, AGED 52 YEARS S/O.K.K.KOSHY, LECTURER SELECTION GRADE, DEPARTMENT OF CHEMISTRY, CATHOLICATE COLLEGE, PATHANAMTHITTA-689 645 PIN. 52. G.JOHN, AGED 52 YEARS, S/O.GEORGE, LECTURER SELECTION GRADE, DEPARTMENT OF CHEMISTRY, CATHOLICATE COLLEGE, PATHANAMTHITTA 689 645 PIN. 53. ELIZABETH GEORGE, AGED 49 YEARS W/O.VARGHESE, LECTURER SELECTION GRADE, DEPARTMENT OF CHEMISTRY, CATHOLICATE COLLEGE, PATHANAMTHITTA 689 645 PIN. 54. MOHANAN VARGHESE, AGED 52 YEARS, S/O.M.VARGHESE, LECTURER SELECTION GRADE, DEPARTMENT OF CHEMISTRY, CATHOLICATE COLLEGE, PATHANAMTHITTA 689 645 PIN. 55. ANITHA KOSHY, AGED 47 YEARS, W/O.T.VARGHESE PANICKER, LECTURER SELECTION GRADE, DEPARTMENT OF CHEMISTRY, CATHOLICATE COLLEGE, PATHANAMTHITTA 689 645 PIN. 56. SUNIL JACOB, AGED 40 YEARS, S/O.JACOB, LECTURER SELECTION GRADE, DEPARTMENT OF CHEMISTRY, CATHOLICATE COLLEGE, PATHANAMTHITTA 689 645 PIN. 57. RAJU THOMAS, AGED 52 YEARS, S/O.P.THOMAS, LECTURER SELECTION GRADE, DEPARTMENT OF BOTANY, CATHOLICATE COLLEGE, PATHANAMTHITTA 689 645 PIN. 58. BAJI VARGHESE, AGED 53 YEARS S/O.K.C.VARGHESE, LECTURER SENIOR SCALE , DEPARTMENT OF BOTANY, CATHOLICATE COLLEGE, PATHANAMTHITTA 689 645 PIN. 59. PHILIPOSE OOMMEN,AGED 42 YEARS, S/O.OOMMEN,LECTURER SELECTION GRADE, DEPARTMENT OF BOTANY, CATHOLICATE COLLEGE, PATHANAMTHITTA 689 645 PIN. 60. MARY JOHN, AGED 51 YEARS, W/O.THOMAS JACOB, LECTURER SELECTION GRADE, DEPARTMENT OF ZOOLOGY CATHOLICATE COLLEGE, PATHANAMTHITTA 689 645 PIN. 61. DR.M.S.SUNIL, AGED 49 YEARS, W/O.P.THOMAS, LECTURER SELECTION GRADE, DEPARTMENT OF ZOOLOGY CATHOLICATE COLLEGE, PATHANAMTHITTA 689 645 PIN. 62. DR.A.ALICE, AGED 50 YEARS, W/O.AJAYAN, LECTURER SELECTION GRADE, DEPARTMENT OF MALAYALAM CATHOLICATE COLLEGE, PATHANAMTHITTA 689 645 PIN. 63. DR.V.RAJEEV, AGED 47 YEARS S/O.N.VASUDEVAN NAMBOODITHIRI LECTURER SELECTION GRADE, DEPARTMENT OF MALAYALAM CATHOLICATE COLLEGE, PATHANAMTHITTA 689 645 PIN. 64. KALAPANA, AGED 47 YEARS W/O.M.U.SOMASUNDARAM, LECTURER SELECTION GRADE, DEPARTMENT OF HINDI CATHOLICATE COLLEGE, PATHANAMTHITTA 689 645 PIN. 65. ANNIE M.JOHN, AGED 52 YEARS, W/O.SHAJI OOMMEN, LECTURER SELECTION GRADE, DEPARTMENT OF HISTORY CATHOLICATE COLLEGE, PATHANAMTHITTA 689 645 PIN. 66. JOY THOMAS, AGED 37 YEARS, S/O.C.M.THOMAS, LECTURER,SELECTION GRADE, DEPARTMENT OF HISTORY CATHOLICATE COLLEGE, PATHANAMTHITTA 689 645 PIN. 67. DR.P.M.THOMAS, AGED 54 YEARS S/O.P.G.MATHAI, LECTURER SELECTION GRADE, DEPARTMENT OF HISTORY CATHOLICATE COLLEGE, PATHANAMTHITTA 689 645 PIN. 68. DR.ACHAMMA KURIAN, AGED 53 YEARS W/O.DR.MATHEW VARGHESE, READER, DEPARTMENT OF PHYSICS, CATHOLICATE COLLEGE, PATHANAMTHITTA 689 645 PIN. 69. THE PRINCIPAL , CATHOLICATE COLLEGE, PATHANAMTHITTA, PIN-689 645. BY ADV. SRI.K.K.CHANDRAN PILLAI THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ALONG WITH W.A. NO.1132/2010 ON 19/07/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.R. C.N.RAMACHANDRAN NAIR & P.S.GOPINATHAN, JJ. .................................................................... Writ Appeal Nos.1020 & 1132 of 2010 .................................................................... Dated this the 19th day of July, 2010. JUDGMENT Ramachandran Nair, J. These appeals are filed by the State Government challenging the decision of the learned Single Judge directing the State to recover tax deducted at source from the DA arrears paid to the respondent- employees and credit only the balance in their Provident Fund Account. The contention of the State is that though liability for payment of DA is approved by the Government, the scheme is not to release payment but to credit in the P.F. Account which is with the Government. However, contention of the respondents is that when salary in the form of DA arrears accrued to them, they are liable to include it in the salary income and are liable to pay tax which necessarily involves deduction of tax at source in terms of Section 192 of the Income Tax Act. 2. Government Pleader appearing for the appellants referred to the scheme of payment of DA arrears and submitted that DA arrears are W.A. 1020&1132/10 2 paid with retrospective effect and the employees are not entitled to either payment in cash or are entitled to withdraw the same from PF Account to which it is credited. He has stated about the lock in period provided against withdrawal means that DA, though credited in the individual account of the employee, cannot be withdrawn within the time stipulated. We do not think the claim of the Government that the scheme of payment of arrears of DA by crediting the PF Account with lock in period affects the scheme of deduction of tax at source under Section 192 of the Act. In fact, State itself has no case that recovery need not be made in terms of Section 192 at the time of crediting the DA arrears in the PF Account of the employee concerned. In our view, Government rightly treated the credit of DA arrears in the individual account of the employee concerned as payment of salary in terms of Section 192. However, the mistake committed by the Government is only in making recoveries of tax for the arrears of DA paid to the account of the employees from the regular salary payable to them. What is required to be done under Section 192 is to deduct tax at W.A. 1020&1132/10 3 source on the income disbursed by way of salary which includes DA arrears at the time of payment or credit in the employees' account and the recovery under Section 192 should be from the amount so paid or credited in the account. In fact, under Section 15 of of the Income Tax Act, "income" under the head "salary" includes any salary due, whether paid or not. In our view, the credit of DA arrears in the PF account, though with lock in period, amounts to payment and in any case atleast it amounts to salary declared as due to the employee and so much so, liability is there on the employee for payment of tax on the DA arrears so credited in the assessment year following. Therefore, State rightly decided to deduct tax at source and remit the same. However, recovery has to be necessarily made from the DA arrears credited and the employees are entitled to credit of only the net amount in the PF account after deduction at source. In other words, the tax portion of the DA arrears payable to each employee has to be paid in cash by State Government to Central Government towards TDS for each employee and certificate has to be issued to the employee concerned. The W.A. 1020&1132/10 4 balance of course could be credited in the PF Account of the employee with lock in period against withdrawal. The learned Single Judge in this regard rightly held so and we see no merit in the Writ Appeals filed by the State by which State is canvassing the position contrary to the statutory provision under the Income Tax Act. Writ Appeals are consequently dismissed. C.N.RAMACHANDRAN NAIR Judge P.S.GOPINATHAN Judge pms