Case Note & Summary
The Employees' State Insurance Corporation (ESIC) filed appeals under Section 82 of the Employees' State Insurance Act, 1948, challenging a common judgment of the ESI Court, Ahmedabad, which allowed applications filed by AIA Engineering Limited and set aside a notice in Form C-18 dated 21.09.2006 and an order under Section 45A of the Act dated 10.10.2007. The ESIC alleged that the respondent-company engaged contractual workers but failed to submit ESI contributions and maintain separate records. Before passing the Section 45A order, the ESIC supplied a copy of the Revenue Inspector's report to the employer. The ESI Court found that the copy of the report was not supplied, violating principles of natural justice, and set aside the order. The High Court held that the finding of fact by the ESI Court regarding non-supply of the report was final and not open to challenge in an appeal under Section 82, which lies only on substantial questions of law. The appeals were dismissed, affirming the ESI Court's order.
Headnote
A) Employees' State Insurance - Section 45A Assessment - Natural Justice - ESI Act, 1948, Section 45A - ESIC passed assessment order under Section 45A without supplying copy of Revenue Inspector's report to employer - Held that failure to supply report violates principles of natural justice and renders order void - ESI Court rightly set aside the order (Paras 4-10).
B) Employees' State Insurance - Appeal under Section 82 - Scope - ESI Act, 1948, Section 82 - Appeal lies only on substantial question of law - Finding of fact by ESI Court regarding non-supply of report is final and not open to challenge in appeal under Section 82 (Paras 11-15).
Issue of Consideration
Whether the order passed under Section 45A of the Employees' State Insurance Act, 1948, without supplying the copy of the Revenue Inspector's report to the employer, is sustainable in law.
Final Decision
The High Court dismissed all four appeals, upholding the ESI Court's order setting aside the C-18 notice and the Section 45A assessment order.
Law Points
- Natural justice
- Section 45A ESI Act
- 1948
- Section 75 ESI Act
- Section 82 ESI Act
- ESI Revenue Manual
- C-18 notice
- assessment of contributions
- contractual workers
- opportunity of hearing
- violation of principles of natural justice
Case Details
2026 LawText (GUJ) (02) 823
R/First Appeal No. 4701 of 2023 with R/First Appeal No. 4702 of 2023 with R/First Appeal No. 4703 of 2023 with R/First Appeal No. 4704 of 2023
Mr. Sachin D. Vasavada for the Appellant, Mr. Devang Nanavati assisted by Mr. Vandan Baxi for the Respondent
Employees State Insurance Corporation
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Nature of Litigation
Appeal under Section 82 of the Employees' State Insurance Act, 1948 against order of ESI Court setting aside Section 45A assessment order.
Remedy Sought
ESIC sought to set aside the ESI Court's order allowing the employer's application and quashing the C-18 notice and Section 45A order.
Filing Reason
ESIC alleged that the employer failed to submit ESI contributions for contractual workers and failed to maintain separate records.
Previous Decisions
ESI Court, Ahmedabad, allowed ESI Application No. 111 of 2007 and set aside the C-18 notice dated 21.09.2006 and the Section 45A order dated 10.10.2007.
Issues
Whether the ESI Court's finding that the Revenue Inspector's report was not supplied to the employer is a finding of fact and not open to challenge in appeal under Section 82?
Whether the order under Section 45A passed without supplying the report violates principles of natural justice?
Submissions/Arguments
Appellant (ESIC) argued that a copy of the Revenue Inspector's report was supplied to the employer before passing the Section 45A order.
Respondent (Employer) contended that no copy of the report was supplied, and the order was passed in violation of natural justice.
Ratio Decidendi
The finding of fact by the ESI Court that the Revenue Inspector's report was not supplied to the employer is final and cannot be re-agitated in an appeal under Section 82 of the ESI Act, which lies only on substantial questions of law. Non-supply of the report violates principles of natural justice, rendering the Section 45A order void.
Judgment Excerpts
The present appeal is filed under Section 82 of the Employees’ State Insurance Act, 1948...
The learned Court allowed the application and set aside the notice issued under Form C-18 dated 21.09.2006, as well as the order passed under Section 45A of the Act dated 10.10.2007.
Procedural History
ESIC issued C-18 notice on 21.09.2006 and passed Section 45A order on 10.10.2007. Employer filed ESI Application No. 111 of 2007 before ESI Court, Ahmedabad, which allowed the application on 31.08.2023. ESIC filed four First Appeals under Section 82 of the Act in 2023, which were heard and dismissed by common judgment on 12.02.2026.
Acts & Sections
- Employees' State Insurance Act, 1948: Section 45A, Section 75, Section 82
