Case Note & Summary
The appellant, M/s. Mohib Shoes (P) Ltd., an employer, faced proceedings under Sections 7A, 14B and 7Q of the Employees Provident Funds and Miscellaneous Provisions Act, 1952. The competent authority passed an assessment order determining provident fund dues, and a recovery notice followed. The appellant claimed it had not been served with the assessment order and, instead of requesting a copy or filing an appeal, filed W.P. No. 25027 of 2024 to challenge the proceedings. A single judge of the Madras High Court, by order dated 28.08.2024, directed the appellant to settle the assessed amount and prefer an appeal under the Act. In appeal, the division bench noted that even after filing the writ appeal, the appellant had made no payment. The respondents argued that the appellant had already been given an opportunity to pay in instalments but failed to comply. The appellant submitted that if served with a copy of the assessment order, it would be in a position to prefer an appeal by depositing some amount. The division bench observed that the appellant ought to have simply requested a copy of the order rather than protracting litigation to delay payment. Balancing the equity, the court directed the respondents to serve one more copy of the assessment order and allowed the appellant to also approach the respondents for a copy. The court then recorded the admitted balance amount as Rs. 26,50,39,038 and directed the appellant to pay 50% of this sum (Rs. 13,25,19,519) within eight weeks, and the remaining 50% in four equal instalments within three months thereafter. The appellant was expressly kept at liberty to work out its remedy under the provisions of the EPF Act. The writ appeal was disposed of with these directions, and no costs were imposed.
Headnote
A) Employee Provident Fund - Assessment and Recovery - Appeal and Deposit - Sections 7A, 14B, 7Q, Employees Provident Funds and Miscellaneous Provisions Act, 1952 - Interim Relief - The appellant, an employer, claimed non-service of assessment order determining provident fund dues; the High Court directed service of order copy and payment of 50% of admitted balance amount within eight weeks, with remaining in instalments, while permitting the appellant to avail statutory remedy - Held that interim protection can be granted to enable employer to pursue appeal, but liability to deposit substantial portion of dues is necessary to safeguard revenue interest. (Paras 9-10)
Issue of Consideration
Whether the appellant is entitled to challenge the assessment order passed under Sections 7A, 14B and 7Q of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 without preferring an appeal and without depositing the determined amount, on the ground that the assessment order was not served upon them.
Final Decision
The writ appeal is disposed of with directions. The respondents shall serve one more copy of the assessment order to the appellant. The appellant is directed to settle 50% of the admitted balance amount of Rs.26,50,39,038 (Rupees Thirteen Crores Twenty Five Lakhs Nineteen Thousand Five Hundred and Nineteen) within eight weeks from the date of receipt of a copy of this order. The remaining 50% shall be paid in four equal instalments within three months from the expiry of the two-month period. The appellant is at liberty to work out his remedy under the provisions of the Act. No costs. Connected miscellaneous petitions are closed.
Law Points
- Legal points not extracted
- Employer cannot avoid EPF liability on ground of non-service of assessment order
- must first request copy and then prefer statutory appeal
- court may direct part payment in instalments while keeping appeal right open
Case Details
2025 LawText (MAD) (03) 136
S.M. Subramaniam, K. Rajasekar
Mr. B. Sundarapandiyan for appellant, Mr. P.K. Paneer Selvam for respondents 1 to 4, No appearance for respondent 5
M/s. Mohib Shoes (P) Ltd, represented by Chairman Mr. Kottai Mohammed Mozhibullah
The Central Provident Fund Commissioner, Employees Provident Fund Organization; The Additional Central Provident Fund Commissioner, Chennai and Puducherry; The Regional Provident Fund Commissioner- II, Vellore; The Enforcement Officer, Division-4, Vellore; The Sub Registrar, Ambur
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Nature of Litigation
Writ appeal against the order of a single judge in a writ petition challenging the assessment proceedings initiated under the Employees Provident Funds and Miscellaneous Provisions Act, 1952.
Remedy Sought
The appellant sought to set aside the order of the learned single judge dated 28.08.2024 in W.P.No.25027 of 2024, and thereby to obtain relief against the assessment order and recovery proceedings.
Filing Reason
The appellant claimed that the assessment order determining provident fund dues was not served upon them, and hence they could not prefer a statutory appeal. The single judge directed them to settle the assessed amount and prefer an appeal, which the appellant challenged on the ground that they should be allowed to challenge the assessment without deposit.
Previous Decisions
The learned single judge in W.P.No.25027 of 2024, by order dated 28.08.2024, directed the appellant to settle the assessed amount and prefer an appeal under the provisions of the Employees Provident Funds and Miscellaneous Provisions Act, 1952.
Issues
Whether the appellant can challenge the assessment order without preferring an appeal and without depositing the determined amount on the ground of non-service of the assessment order.
What interim directions are appropriate to enable the appellant to avail statutory remedy while protecting the interests of the revenue.
Submissions/Arguments
Appellant argued that if served with a copy of the assessment order, they would be in a position to prefer an appeal by depositing some amount.
Respondents argued that an opportunity had already been given to settle the amount by instalments which the appellant failed to comply with, and thus no leniency should be granted.
Ratio Decidendi
An employer facing recovery under the EPF Act cannot avoid the liability merely on the ground of non-service; the court may grant interim relief by directing service of the order and prescribing a schedule for payment while keeping the right to statutory appeal available.
Judgment Excerpts
admittedly, proceedings were initiated under Sections 7A and 14B and 7Q of the Employees Provident Funds and Miscellaneous Provisions Act, 1952.
the appellant ought to have requested the Authorities to serve with one more copy of the assessment order for the purpose of challenging the same. Contrarily, the appellant has chosen to develop litigation in order to increase the longevity and to clear the liability.
the appellant is directed to settle 50% of the admitted balance amount i.e., 50% of Rs.26,50,39,038/- is Rs.13,25,19,519/- within a period of eight (8) weeks
the appellant is at liberty to workout his remedy under the provisions of the Act.
Procedural History
Proceedings were initiated under Sections 7A, 14B and 7Q of the EPF Act. Assessment was made and recovery notice issued. The appellant filed W.P.No.25027 of 2024 challenging the assessment, claiming non-service of the order. The learned single judge, by order dated 28.08.2024, directed the appellant to settle the assessed amount and prefer an appeal. Aggrieved, the appellant filed the present writ appeal under Clause 15 of the Letters Patent Act.
Acts & Sections
- Employees Provident Funds and Miscellaneous Provisions Act, 1952: 7A, 14B, 7Q
- Letters Patent Act: Clause 15
