The main legal point established in the judgment is the application of the principles laid down by the Hon'ble Supreme Court in Manipal Academy of Higher Education v. Provident Fund Commissioner and other relevant cases to determine the inclusion of various allowances in 'basic wages' for provident fund contribution.

ORDER

S.K. Gangele, J.

1. Petitioner-Company has filed this petition against the order dated 09.03.2011, Annexure P-1 passed by Employees Provident Fund Appellate Tribunal and the order dated 21.04.2008, Annexure P-2 passed by Assistant Provident Fund Commissioner, Gwalior.

2. The Petitioner is a Company, registered under the provisions of the Companies Act, 1956. Its establishment is governed by the provisions of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952, hereinafter referred to as the 1952 Act and also by the provisions of the Employees' Provident Fund Scheme, 1952, hereinafter referred to as the 1952 Scheme. The Petitioner - Company has been allotted a Provident Fund Code No. MP/15203. The Petitioner has two categories of employees, i.e. Firstly, Executive Category which includes - i.e. Officer, Manager, General Manager and Vice President etc. and secondly Non-executive category, which includes Supervisors, Assistant operators, operators, Fitters, Computer Operators.

3. The Petitioner - company in accordance with the management policy has been paying Variable Dearness Allowance (for brevity, 'VDA') which is payable to second category of employees i.e. non-executive category and they are getting package of salary, which includes Basic + VDA + Conveyance allowance and the Executive Category of employees are getting the package of salary, which includes Basic + HRA + Special allowance. The Petitioner -company has been remitting the provident fund contribution of eligible employees in accordance with the 1952 Act and the 1952 Scheme and it has been deducting provident fund contribution on two components of salary i.e. Basic + VDA. However, it has not been deducting provident fund contribution on other components i.e. HRA + Special allowance + Management allowance and conveyance allowance.

4. The Assistant Provident Fund Commissioner noticed that the Petitioner-Company was paying wages to its workers in guise of allowances to avoid the EPF liability, hence it issued a summon on 09.02.2007 under Section 7A of the 1952 Act for determination of provident fund dues against the Petitioner - company for the period from April 2002 to January 2007.

5. The Petitioner-company contended before the Assistant Provident Fund Commissioner that it was not liable pay provident fund contribution of its workers on other heads of wages except basic wage + VDA. The Authority vide order dated 21.04.2008 has held that the Special allowance is being paid to the workers as a part of monthly salary and in order to reduce the provident fund liability the management has separated this amount from the basic wages.

6. In regard to other allowances, the Authority has held that other allowances are part of basic wages for the purpose of provident fund contribution. Hence, the Authority has held that the Petitioner is liable to deposit provident fund contribution for the period from April 2003 to January 2007 of Rs. 12.54,269/-.

7. Against the aforesaid order the Petitioner-company filed an appeal before the Employees' Provident Fund Appellate Tribunal, New Delhi under Section 7A of the 1952 Act. The appellate authority has dismissed the appeal.

8. Learned Counsel for the Petitioner-Company has contended that the impugned orders passed by the Assistant Provident Fund Commissioner and the Appellate Authority are against the provisions of the 1952 Act. The Petitioner-company is not liable to deduct provident fund from the wages of the workers except basic wages + VDA and it has been depositing the provident fund contribution with the department accordingly. Hence, it is not liable to deposit any additional amount. In support of his contentions learned Counsel relied on the judgment of the Hon'ble Supreme Court in the case of Manipal Academy of Higher Education v. Provident Fund Commissioner, (2008) 5 SCC 428.

9. Contrary to this learned Counsel for the Respondents has contended that basic wages includes all emoluments earned by the workers und