Back
PATNA HIGH COURT
Shambhu Prasad Singh and Muneshwari Sahay JJ.
Mahalaxmi Fibres And Industries Ltd.
Versus
State Of Bihar
Civil Writ Jurisdiction Case No. 36 of 1973 ; 40 of 1973 ; 41 of 1973 ; 263 of 1973 ;
Decided On : MAY 6, 1976
EMPLOYEES STATE INSURANCE ACT, 1948 - Section 73-A - Special contribution payable by an employer under Section 73-A is not a fee but a tax or an impost in the nature of special assessment and could be realised from the petitioner without conferring any benefit upon it or its employees.
Fact of the Case:
The petitioner, a public limited company, challenged the notices issued to it for recovery of dues payable to the Employees State Insurance Corporation (ESIC) as special contribution under Section 73-A of the Employees State Insurance Act, 1948 (the Act). The petitioner claimed that it was not liable to pay the special contribution, that no certificate under the Revenue Recovery Act could be sent by the Collector to the Certificate Officer for realization of dues, and that the Certificate Officer had no jurisdiction to realize the dues under the Bihar and Orissa Public Demands Recovery Act on certificates issued by the Collector under the Revenue Recovery Act.
Finding of the Court:
The Court held that the special contribution payable under Section 73-A of the Act was not a fee but a tax or an impost in the nature of special assessment. It was not dependent on the enforcement of the provisions of Chapters IV and V of the Act and could be realized compulsorily even when no benefits under Chapter V were being conferred to the employees of the employers from whom the special contribution was realized. The Court also held that the Corporation was a public officer for the purposes of Section 5 of the Revenue Recovery Act and could make a request to the Collector for recovery of the sums payable to it or, in other words, recoverable by it as arrears of revenue. The Court further held that the Collector could adopt some of the provisions of the Public Demands Recovery Act which were not in conflict with the provisions of the Revenue Recovery Act for recovery of dues for which a requisition is received under Section 3 or 5 of the Revenue Recovery Act.
Issues: 1. Whether the special contribution payable by an employer under Section 73-A of the Act was a fee or a tax? 2. Whether a certificate for recovery of the dues could be issued under the Revenue Recovery Act? 3. Whether the dues could be realized by the Certificate Officer under the Bihar and Orissa Public Demands Recovery Act on certificates issued by the Collector under the Revenue Recovery Act?
Ratio Decidendi: 1. The special contribution payable under Section 73-A of the Act was not a fee but a tax or an impost in the nature of special assessment. It was not dependent on the enforcement of the provisions of Chapters IV and V of the Act and could be realized compulsorily even when no benefits under Chapter V were being conferred to the employees of the employers from whom the special contribution was realized. 2. A certificate for recovery of the dues could be issued under the Revenue Recovery Act by the Collector to the Certificate Officer for realization of dues. 3. The dues could be realized by the Certificate Officer under the Bihar and Orissa Public Demands Recovery Act on certificates issued by the Collector under the Revenue Recovery Act.
Final Decision: The Court dismissed all four writ applications filed by the petitioner.
SHAMBHU PRASAD SINGH, J.
1. The petitioner in all these four writ applications under Articles 226 and 227 of the Constitution of India is a public limited company incorporated under the Indian Companies Act having registered office in Calcutta and a spinning factory at village Ormanjhi in the district of Ranchi within the State of Bihar. It appears that various certificate proceedings are pending before the Certificate Officer, Ranchi, respondent No. 5, against the petitioner for reailisation of dues payable to the Employees State Insurance Corporation (hereinafter referred to as the Corporation) as special contribution under Section 73-A of the Employees State Insurance Act (hereinafter referred to as `the Act). In two of these writ applications, namely, C. W. J. C. No. 36 of 1973 (R) and C. W. J. C. No. 40 of 1973 (R) prayer has been made by the petitioner for quashing Annexures 3, 3-A, 4 and 4-A which are notices issued to the petitioner in two of the said certificate proceedings. The aforesaid annexures to the application in C. W. J. C. No. 36 of 1973 (R) relate to Certificate Case No. 82 (OD) of 1972-73. According to the said notices, the petitioner is liable to pay Rs. 9,859.00 as special contribution for the quarters which ended on 30th of June, 1971, of September, 1971, and 31st of December, 1971. The said four annexures to the application in C. W. J. C. No. 40 of 1973 (R) relate to Certificate Case No. 69 (OD) of 1971-72 and according to them, the petitioner is liable to pay Rs. 4,645.25 as special contribution for the quarters which ended on 31st of March, 1970, 30th of June, 1970 and 30th of September, 1970. In C. W. J. C. No. 263 of 1973 (R), a general prayer has been made for quashing the proceeding in Certificate Case No. 128 (OD) of 1970-71. This case is for realisation of Rs. 8.402.35 P. for the quarters which ended on 31st of March, 1969, 30th of June, 1969, 30th of September, 1969 and 31st of December, 1969. In C. W. J. C. No. 41 of 1973 (R), the prayer of the petitioner is for issuance of a writ directing the respondents to forbear from proceeding with certificate case No. 37 (OD) of 1971-72 and No. 72 (OD) of 1973-74 pending disposal of E. S. I. Case No. 1 of 1971 pending before the Industrial Tribunal at Patna. Certificate Case No. 72 (OD) of 1973-74 relates to the quarters which ended on 31st of March, 1972, 30th of June, 1972, 30th of September, 1972, 30th of December, 1972 and 31st of March, 1973. It is not stated in the writ petition as to which period Certificate Case No. 37 (OD) of 1971-72 relates.
2. The office of the Regional Director of the Corporation, respondent No. 2, is situate at Patna. He made requests to the Collector, Patna, respondent No. 3, under the Revenue Recovery Act to recover the dues which, according to him, were payable by the petitioner as special contribution under Section 73-A of the Act. As the factory of the petitioner was situate in the district of Ranchi, respondent No. 3 in his turn sent certificates for realisation of dues to the Collector of Ranchi, respondent No. 4. Respondent No. 4 appears to have sent the certificates to the certificate Officer, Ranchi, respondent No. 5, before whom the aforesaid proceedings are pending.
3. Facts of the cases are not in dispute and, therefore, it is not necessary to state in any detail the averments made in the writ applications and supplementary affidavits filed on behalf of the petitioner and in the counter-affidavits filed on behalf of the respondents. It will suffice to say that the petitioner claims that it was not liable to pay the special contribution, that no certificate under the Revenue Recovery Act could be sent by respondent No. 3 at the request made by the Corporation or respondent No. 2 and that respondent No. 5 had no jurisdiction to realise the dues from the petitioner under Bihar and Orissa Public Demands Recovery Act on certificates issued by respondents 3 and 4 under the Revenue Recovery Act. The respondent
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
