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2014 Supreme(Del) 2454
High Court of Delhi
SURESH KAIT, J.
M/s. Polythene Bag Factory
Versus
Assistant P.F. Commissioner
W.P. (C) No. 5362 of 2013
Decided on: 19-11-2014
Advocate Appeared
For the Petitioner:Anurag Ahluwalia, Advocate.
For the Respondent:Dinesh Kumar, Advocate.
Headnote:
Employees' Provident Funds and Miscellaneous Provisions Act, 1952 -Sections 1 and 3, 7 (A) (1) (a) (b) and (2) (a) (b), 16 - Provident Fund - Recovery proceedings - Assessment - Non-profit making Establishment - Legality of order - Petitioner Establishment is a 'no profit no loss' unit in house production of polythene bags for their own department's use for raising plants and has never earned profit or income - Salaries of the employees are paid from Government Grant and production cost is also given by the Government - Factory is not making any profit on finished goods but the supply of goods to Government is on cost to cost basis for Government purpose - Petitioner has never sold finished goods in open market and has never taken any profit on it - Petitioner has neither Permanent Account Number (PAN) nor Bank Account, never Income Tax Returns since 1978 to 2001 was filed - In September, 1990 the number of employees has reached 20 - Act becomes applicable to the Establishment - Subsequent to the year 1990, the number of employees went down from 20 - Held, once the Act becomes applicable, the Establishment shall continue to be governed by the Act even if the number of persons employed falls below twenty - Concerned Authority is directed to assess the contribution to provident fund for the period starting from September, 1990 instead of February, 1986 - Petitioner shall deposit the difference amount to the respondent - Petition is partially allowed.
Suresh Kait, J.
1. Vide the present petition, the petitioner has assailed the order dated 16.04.2010 passed by the Employees Provident Fund Appellate Tribunal, New Delhi, in ATA No. 398 (5) of 2003.
2. The petitioner has also assailed the recovery proceedings emanating therefrom.
3. Mr.Anurag Ahluwalia, learned Counsel appearing on behalf of the petitioner submitted that petitioner is an Establishment functioning in the Forest Department under the State of Gujarat. It has not applied voluntarily for the coverage of The Employees’ Provident Funds and Miscellaneous Act, 1952 (for short ‘EPF Act’), but the EPF Authority / Respondent brought the petitioner / Establishment within the ambit of the Act and assessed the dues by including the casual employees engaged by the petitioner. The petitioner is a non-profit making Establishment and provisions of EPF Act are not applicable to it. Thus, the order passed by the Authority is illegal.
4. Ld. Counsel has referred Sections 1 and 3 of EPF Act, which read as under:-
“1. Short title, extent and application.- (1) This Act may be called the Employees? Provident Funds and Miscellaneous Provisions Act, 1952.
(2) It extends to the whole of India except the State of Jammu and Kashmir.
(3) Subject to the provisions contained in section 16, it applies -
(a) to every Establishment which is a factory engaged in any industry specified in Schedule I and in which twenty or more persons are employed and
(b) to any other Establishment employing twenty or more persons or class of such Establishments which the Central Government may, by notification in the Official Gazette, specify, in this behalf:
Provided that the Central Government may, after giving not less than two months’ notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act to any Establishment employing such number of persons less than twenty as may be specified in the notification.
(4) Notwithstanding anything contained in sub-section 3 of this section or-sub-section 1 of section16, where it appears to the Central Provident Fund Commissioner, whether on an application made to him in this behalf or otherwise, that the employer and the majority of employees in relation to any Establishment have agreed that the provisions of this Act should be made applicable to the Establishment, he may, by notification in the Official Gazette, apply the provisions of this Act to that Establishment on and from the date of such agreement or from any subsequent date specified in such agreement.
(5) An Establishment to which this Act applies shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time falls below twenty.
3. Power to apply Act to an Establishment which has a common provident fund with another Establishment. - Where immediately before this Act becomes applicable to an Establishment there is in existence a provident fund which is common to the employees employed in that Establishment and employees in any other Establishment, the Central Government may, by notification in the Official Gazette direct that the provisions of this Act shall also apply to such other Establishment.”
5. Mr. Ahluwalia, Ld. Counsel further submitted that EPF Act is applicable upon an Industry if 20 or more workmen are employed by it. To this effect, the petitioner has drawn attention of this Court to the details showing Muster Roll, information, year, month with muster roll number and amount of PBF. He submitted that in the year 1998-99, there were 9 occasions where the number of the workmen touched 20, in the year 1997-98, the number of the workers reached to 20 on 13 occasions and in the year 1991, the number of workmen touched 20 on 5 occasions only. Despite, the ld. Authority passed the order dated 27.09.2001 as under:
“On 25.09.2001, Shri B.J. Nayak-Asst. Forest Conservator Rajpipla-Silva Division, Department of Forest appeared on behalf of the Establishment and submitt
