The authorities specified in section 7-A of the Employees Provident Funds Act, 1952 have the power to determine the liability of an employer to pay the amount due under the Act and the scheme before determining the amount payable by the employer.

The petitioner, a partnership-firm, prays for the issue of a writ of mandamus directing the respondents not to enforce the provisions of the Employees Provident Funds Act, 1952 (hereinafter referred to as the Act) under the following circumstances. The petitioner-firm, said to have been started 25 years ago, is manufacturing snuff. Its factory is situated at Adidravidan Street at Kamuthi, Ramanathapuram District. The firm has also a shop at Nadar Bazar, Kamuthi. On 21st November, 1968, the petitioner-firm furnished some particulars to the Provident Fund Inspector, Sivakasi, stating that 14 women were employed in the factory, that 6 men were employed in the bazar shop and that 9 persons were under their employment continuously for one year. On the basis of this information, the Regional Provident Fund Commissioner issued a notice to the petitioner dated 17th December, 1968 stating that the factory came within the purview of the Act and the scheme framed, thereunder, inasmuch as the factory had completed five years from the date of the commencement of production. To that communication, the petitioner-firm replied on 16th January, 1969 stating that the statement given on 21st November, 1968 was only at the instance of the Provident Fund Inspector, that there were not 20 employees as would be seen from the Attendance Register and Pay Disbursement Register and that, therefore, the provisions of the Act were not applicable to them.There was no reply to this communication. The petitioner sent another communication on 24th February, 1969 stating that they were prepared to produce their records to support their contention and requested the Provident Fund Commissioner to give an opportunity. There was no reply even to this communication. On 4th December, 1969 the Regional Provident Fund Commissioner issued a notice stating that the petitioner had violated the provisions of the Act and that if it did not remit the amount mentioned therein, action would be taken to recover the amount by attaching the properties under the Revenue Recovery Act. This was followed by another communication dated 9th December, 1969. The petitioner-firm protested. But without giving an opportunity to the petitioner-firm to establish its contention that the factory did not fall within the purview of the Act another communication was issued on 22nd December, 1969 stating that if the amount was not paid within the specified time, action would be taken for recovery of the same. It is in these circumstances that the petitioner-firm has prayed for the issue of a writ of mandamus alleging inter alia that its establishment does not fall within the purview of the Act, that no opportunity was given to the petitioner-firm to establish its contention that its factory does not fall within the purview of the Act and that, therefore, respondents should be restrained from taking action.

2. In the counter filed on behalf of the respondents it is alleged that the inspection of the factory and shop disclosed that 20 persons had been employed, that, therefore, the establishment falls within the scope of the Act and the scheme, that the petitioner-firm did not ask for an enquiry under section 7 (A), that without holding an enquiry it was open to the authorities to make a demand for payment of the contribution on the materials available and that, therefore, the petitioner-firm is not entitled to the relief prayed for.

3. The Act has been passed to provide for the institution of provident fund for the employees in factories and other establishments. It applies to establishments employing 20 or more persons. The contention of the petitioner-firm is that in its factory there are only 14 employees, that the factory has no connection with the shop where six persons are employed, that the information about the number of persons working in the shop was given at the instance of the Provident Fund Inspector who inspected the factory on 21st November, 1968, that the correct position was