IMPORTANT POINT
The central legal point established in the judgment is the direct employment of artisans/karigars by the petitioners for work connected with the establishment, as interpreted under the Employees' State Insurance Act, 1948.

JUDGMENT :

Raja Basu Chowdhury, J.

1. The petitioner no.1 is engaged in the business of trading of embroidery on sarees. The petitioner no.2 is one of the directors of the petitioner no.1. According to the petitioners, the job of embroidery is carried out by independent traders/artisans in their respective premise or through engagement of unidentified persons, on whom your petitioners do not have any control. Once the finished products are brought to the premise of the petitioners, the management decides as to whether the products can be accepted on payment of consideration or the same would be rejected.

2. On acceptance of the products in the manner indicated above, the petitioners pay the cost for the job charges inclusive of all materials used. On the contrary, if ultimately, the products are rejected, the artisans and traders pay the cost price of the clothing to the petitioners and take away the garments. The petitioners claim that the aforesaid arrangement is on principal to principal basis.

3. In usual course, the petitioners have taken on leave and licence a portion of the first floor of premises no. 25/1 Shakespeare Sarani, Kolkata-700017, admeasuring 1700 sq.ft., super built up area. It is also the petitioners’ case that since, the said premises is owned by four co-sharers, separate leave and licence agreements had to be executed by and between the petitioner no.1 and the owners of the respective shares of the said premises. The first floor of the said premises is exclusively used for show-room of the petitioner no.1.

4. In usual course, the artisans/weavers and traders claim payment from the petitioners by raising invoices. The payment is made through online transfer system, or through cheque, or at times in cash. In ordinary course, the work of embroidery requires to be polished and the finished products also require to be polished/dry-cleaned before those are put up on the display in the show-room or sent to the buyers of the petitioners. The payment made to the dry cleaner is recognised as polishing charges and the payment made to the artisans/karigars/traders is recognised as making charges.

5. For the period 2014 to 2015, the ESI authorities while determining contributions payable by the petitioners had passed an order dated 19th June, 2019 under Section 45A of the Employees’ State Insurance Act, 1948 (hereinafter referred to as the “said Act”), thereby, saddling the petitioner no.1 with diverse liabilities under various heads, however, on the said occasion, the making charges and the polishing charges had been specifically excluded, as the same cannot attract the liability of contributions under the said Act.

6. The petitioners contend that for the subsequent period from 2016 to 2017, a notice in Form C-18 dated 3rd April, 2019 was issued alleging non-payment of contributions under certain heads, which also included making charges and polishing charges. Pursuant to the aforesaid, a hearing was conducted by the Authorised Officer and ultimately by an order dated 24th May, 2019 passed under Section 45A of the said Act, the respondent no.3 had determined an amount of Rs.25,44,935/-for the period from 4th April, 2016 to March, 2017 in respect of five out of thirteen heads of accounting as mentioned in the notice in Form C-18. Although, the petitioners had preferred a statutory appeal, yet the petitioners before the Appellate Authority had agreed to deposit contributions in respect of three out of five heads which included salary, general charges, repair and maintenance. The issue therefore boiled down to the payment of contributions against making charges and polishing charges. The same was decided by the respondent no.2 by an order dated 21st December, 2021, whereby, the objections taken by the petitioners were rejected.

7. Being aggrieved, the instant writ petition has been filed.

8. Mr. Majumder, learned advocate representing the petitioners, submits that both the respondent nos.2 and 3 by misconstruing the prov