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2019 Supreme(Del) 360
IN THE HIGH COURT OF DELHI AT NEW DELHI
S. MURALIDHAR, SANJEEV NARULA, JJ.
M/S. Dentsu Marcom Pvt. Ltd. - Appellant
Versus
Central Board of Trustees, Through: Assistant P.F. Commissioner Delhi (South) - Respondent
LPA 688 of 2018 & CM APPL. 51448 of 2018
Decided On : 24-01-2019
For the Appellant :Mr. Ranvir Singh and Mr. Rajiv Arora, Advocates
For the Respondent:Ms. Inderjeet Sidhu, Advocate along with Mr. Sunil Ranjan, EOC (Legal)
Headnote:
Employees Provident Fund and Miscellaneous Provisions Act, 1952 -Section 7-Q, 14-B - Provident Fund - Demands for payment - Damages - interest - Competent Authority concluded that the Appellant had defaulted in remitting the PF and allied dues within the stipulated time and levy damages - Competent Authority reveals that indeed there is no finding on the aspect of mens rea - No plea concerning limitation was raised by the Appellant at that stage - There was no occasion for the Competent Authority to examine whether the Circular dated 28th November 1990 issued by the PF Authority would apply - No clarity as to the dates on which deposits were made by the Appellant towards PF dues - It was not clear whether the Appellant made those deposits soon after deducting the employees' contribution of the PF or later - No interference with the impugned order is caused for of the learned Single Judge - In fresh determination, the Competent Authority will not be influenced by any observation of the Single Judge - Sum of Rs. 62,05,360/- directed to be deposited by the Appellant with the PF Authority.
Dr. S. Muralidhar, J.
1. This is an appeal against an order dated 12th November 2018 passed by the learned Single Judge disposing of W.P.(C) 12089/2018 filed by the Respondent, Central Board of Trustees of the Employees” Provident Fund Organisation (hereafter the “PF Authority”).
2. The background facts are that two show cause notices (SCNs) were issued on 22nd April 2014 by the Assistant Provident Fund Commissioner (hereafter the “Competent Authority”) to the Appellant making demands for payment of damages/interest under Section 14-B of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (EPF Act) for the sum of Rs. 1,07,64,211/- and interest of Rs. 51,95,297/- under Section 7-Q of the EPF Act for the period from March, 2010 till April 2014 and in the sum of Rs. 22,40,679/- as damages under Section 14-B and Rs. 10,87,850/- as interest under Section 7-Q for the period April, 2005 till March 2010. However, in both SCNs it was stated that the demands were for the period from 1st April 1996 to 22nd April 2014.
3. Pursuant to the said SCNs, a hearing took place before the Competent Authority on 18th June 2014 during which two written replies were handed over by the Appellant to the Competent Authority. Copies of both replies, which are undated, have been enclosed with the present appeal as Annexure “A-4”. Both mention the relevant period as 1st April 2005 to 22nd April 2014. In one reply the Appellant stated that they had already deposited a sum of Rs. 53,00,384/- towards interest and in the other that they had deposited Rs. 9,04,976 towards interest. According to the Appellant the balance amount payable by it under one SCN was Rs. 1,14,481 towards interest under Section 7-Q of the EPF Act and Rs.1,07,60,295 towards damages under Section 14-B of the EPF Act. The amounts due under the second SCN were Rs. 1,70,920 towards interest under Section 7-Q of the EPF Act and Rs. 22,19,357 towards damages under Section 14-B of the EPF Act.
4. An order was passed by the Competent Authority on 3rd January 2015, a copy of which was dispatched to the Appellant under a covering letter dated 23rd January 2015. The Competent Authority referred to the replies of the Appellant. The Competent Authority then discussed the merits and concluded that the Appellant had defaulted in remitting the PF and allied dues from 1st April 1996 to 13th March 2014 within the stipulated time frame i.e. within 15 days from the end of every month. The Competent Authority proceeded to levy damages under Section 14-B of the EPF Act for the entire period from 1st April 1996 to 12th September 2014 in the sum of Rs. 1,30,46,614/- and interest under Section 7-Q of the EPF Act in the sum of Rs. 63,05,099/-.
5. On receiving the above order, the Appellant wrote a letter on 10th March 2015 to the Competent Authority pointing out that they had already deposited Rs. 62,05,360/- towards interest under Section 7-Q of the EPF Act. The Appellant enclosed the year-wise calculation of the interest, copies of relevant challans and bank statements. The Competent Authority was asked to give credit to the deposited amount and “revise the demand accordingly”.
6. On 21st April 2015, another communication was sent by the Competent Authority to the Appellant, this time revising the damages under Section 14-B of the EPF Act to Rs.1,21,29,791/- and interest under Section 7-Q to Rs. 10,16,562/-.
7. The Appellant filed Appeal No. ATA 461 (4) 2015 before the Employees Provident Fund Appellate Tribunal questioning both the order dated 23rd January 2015 as well as the subsequent communication dated 21st April 2015 of the Competent Authority. Inter alia in the memorandum of appeal, it was urged that a demand could not have been made for a period prior to the date of issue of the SCN as per the departmental Circular issued by the PF Authority on the advice of the Central Government on 28th November 1990. It was further pointed out that damages sought from the Appellants was more than 100 %
