CWP No. 2382 of 2009 1 IN THE HIGH COURT OF PUNJAB & HARYANA, CHANDIGARH CWP No. 2382 of 2009 Date of decision September 7, 2009 M/s Herman Milkfoods Ltd. ....... Petitioners Versus Union of India and others ........ Respondents CORAM: HON'BLE MR. JUSTICE K. KANNAN Present:- Mr. I. S. Ratta, Advocate for petitioner. Mr. Rajesh Hooda, Advocate for the respondents. **** 1. Whether reporters of local newspapers may be allowed to see the judgment ? 2. To be referred to the reporters or not? 3. Whether the judgment should be reported in the digest? **** 1. The writ petition, after being served with proceedings under Section 14-B of the Employees Provident Fund Act directing damages and interest to be paid for delayed remittance, has been filed seeking for the refund of the amount that has been already calculated on the basis of an order of adjudication made by the authority under Section 7-A of the above Act. The basis of the challenge is that when the order was made in Section 7-A on 15.4.2005, it was purported to be for a period from March 2003 to July, 2004. The factory had been closed, according to the petitioner, at the relevant time on account of disconnection of electricity supply. It was reopened subsequently only after July, 2004 and during the above period when the factory was not working and the workmen had not been employed, the question of making Provident Fund CWP No. 2382 of 2009 2 Contribution did not arise. The attempt of the learned counsel for the petitioner was to show that the power of the competent authority to determine the amount under Section 7-A of the EPF Act was a quasi judicial power and the amount shall be determined by taking into account the wages payable to each workman and a mere tentative estimation would not suffice. 2. Learned counsel for the petitioner refers to the decision of the Hon'ble Supreme Court in Food Corporation of India Vs. Provident Fund Commissioner and others (1990) 1 SCC 68 that dealt with the scope of enquiry before the Commissioner under Section 7-A of the Act. “The Commissioner while conducting an inquiry under Section 7-A has the same powers as are vested in a court under the Code of Civil Procedure for trying a suit. The power given under Section 7-A to the Commissioner is to decide not abstract questions of law, but only to determine actual concrete differences in payment of contribution and other dues by identifying the workmen. The Commissioner should exercise all his powers to collect all evidence and collate all material before coming to proper conclusion. That is the legal duty of the Commissioner. Though the employer and the contractors are both liable to maintain registers in respect of the workers employed but the question is not whether one has failed to produce evidence. The question is whether the Commissioner who is the statutory authority has exercised powers vested in him to collect the relevant evidence before determining the amount payable under the said Act. 3. It was the contention of the learned counsel for the petitioner that the determination of liability must set out the details of calculations and the basis on which the quantum of contribution was payable by the employer and if the same was not done, it would be CWP No. 2382 of 2009 3 opposed to the above stated proposition. He find support from a judgment of a Division Bench of the Patna High Court to the same proposition in M/s India Mica and Micanite Industries Ltd. Vs. The Regional Provident Fund Commissioner reported in 1974 LIC 415. The EPF Act is not a taxing statute and any amount illegally calculated by wrong power made under Section 7-A cannot be retained by them, as held by the Rajasthan High Court in Ess Dee Carpet Enterprises, Jaipur Vs. Union of Inda and others 1985 LIC 1116 . 4. The lofty propositions would be required to be grounded only for the reason that the challenge is made after the determination was made on 15.4.2005 by means of the writ petition in the year 2009. 5. The order of assessment made under Section 7-A refers to the fact that for the period up to the year 2003, details had been furnished by the representative of the Management and the Commissioner had determined Rs. 8,65,421/- as the amount payable. In the order dated 15.4.2005, we have again details as to how the principal of amount of Rs. 2,67,083/- was arrived at which refers to specific account numbers for whom the contributions ought to have been made and the financial reckoning is made with reference to the amounts that were bound to have been credited to the five account numbers. This order dated 15.4.2005 is reported to have been known to the petitioner only on 10.4.2006 and a request for review of the order had been made on 15.4.2006. This request was rejected on 11.8.2006. This date must have been taken as a last date when the petitioner knew that a demand had been wrongly made and that the Provident Fund Commissioner had determined a particular sum as recoverable by him. The petitioner himself accepted the order and made the contribution demanded of him. 6. If the writ petitioner had a remedy by means of an CWP No. 2382 of 2009 4 appeal against the order rejecting his plea for review of the order passed under Section 7-A, he ought to have exercised such a right under the provisions of the EPF Act. The petitioner had not availed of such remedy,complied with the order and waited again till the proceedings were taken under Section 14-B, determining interest and damages for delayed remittance. It was at this stage that the writ petitioner has come to this Court seeking for relief. 7. The objection by the learned counsel for the respondent was that the petitioner had an efficacious alternative remedy by an appeal against the order dated 15.4.2005, and the writ petition was not maintainable. On the other hand, the justification for approach to this Court, is only by reference to the decision in Food Corporation's case (supra). It was a case where the Court finding that the assessment had been wrongly made under Section 7-A intervened in a writ petition filed under Article 226 before the High Court which was later confirmed by the Hon'ble Supreme Court. If the issue was merely whether a challenge under Section 7-A could be made by means of a writ petition, it was perhaps possible for an employer to make out a case of illegal assessment done without setting out any details. The order dated 15.4.2005 was a speaking order in the sense that the authority had a basis on which the assessment was made. If an assessment had been made without any basis it could be a subject of challenge. If the assessment was on a basis which according to the petitioner was insufficient, it shall not be a matter for examination before this Court. A complete absence of basis is wholly different from the inadequacy of material on which the assessment was made. It is the inadequacy of the material available before the Commissioner that is challenged by the petitioner as making the order untenable in law. Again even the order passed on 15.4.2005 was not left without challenge. The petitioner did make an attempt seeking for review which was rejected on CWP No. 2382 of 2009 5 11.8.2006.That order had become final. If he had not taken steps to challenge. That order dated 11.8.2006 and would wait till the year 2009 to make the challenge in collateral proceedings, that is proceedings issued under Section 14-B which was a further process to the interim assessment, the petitioner shall not obtain any relief from this Court. The petitioner only could be seen as guilty of laches. I am not merely disposing of the writ petition as barred by laches but on a substantive ground as well that the petitioner who had suffered an order of assessment on 15.4.2005 cannot have that order nullified when proceedings are taken for recovery of interest and damages under Section 14-B. The claim for refund itself would be possible only in reference to an illegal assessment. The point that learned counsel for the petitioner would convas is for that the order dated 15.4.2005 was illegal and in my view, it is devoid of substance. The reference to the decision of the Hon'ble Supreme Court taking up an instance when the assessment should be termed as illegal would not apply to a case where the assessment was made on materials which were available before the Commissioner. 8. The challenge in the writ petition is untenable and the writ petition is therefore, dismissed. No costs. (K. KANNAN) JUDGE September 7, 2009 archana