JUDGMENT

Orders Ext.P15 dated 05.10.2010 passed by the Assessing Officer under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and dated 04.10.2021 Ext.P16 rendered in appeal No.554/2019 dismissing the appeal of the petitioner are under challenge in the present writ petition.

2. Petitioner is a corporation fully owned by the Government of Kerala engaged in the development of agricultural infrastructure within the state of Kerala for the purpose of promoting, undertaking, financing, executing land agricultural schemes on behalf of the Government and other schemes providing for land development, and with effect from 2007 also started undertaking the process of consultancy. Since there was a dispute with regard to the employees not joining the scheme under the EPF & MP Act, the scheme was maintained by the Trustees as per the Government order dated 23.06.1979. Vide communication dated

20.09.1991 of the second respondent petitioner was informed that it is covered under the EPF & MP Act and was allotted a Code No.KR/12536. Thus, it came within the purview of the scheme with effect from 31.10.1980. An amount of Rs.2,22,64,644/-(Rupees Two crores twenty two lakh sixty four thousand six hundred and forty four only) was assessed by the respondents on account of non-payment of the contribution which was ultimately paid by the petitioner. As a consequence of the aforementioned order proceedings were initiated. Petitioner is stated to have deposited interest under Section 7Q but as regards the damages, is aggrieved of in the present writ petition.

3. Assessing authority without realizing the objects of the corporation and the fact that it was running into losses and there was no mens rea, assessed the damages to the extent of 100%. Matter was taken in appeal before the appellate court. The appellate court considering the attenuating circumstances reduced the amount to the extent of 70%. That is from Rs.5428,505/- it came down to Rs.37,98,553/-. It is further contended that since there was no mens rea and petitioner had been suffering the losses, if not granted any relief it would be on the verge of closing.

4. On the other hand, learned counsel for the respondents submitted that the provisions of Section 14B of the 1952 Act if read with other provisions of the Act like Employees State Insurance Act and Income Tax Act dealing with the imposition of penalty, the mens rea cannot be looked into. In support of the aforementioned contention relies upon the judgment of Supreme Court in Horticulture Experiment Station Gonikoppal, Coorg Vs. The Regional Provident Fund Organization (2022 (4) SCC 516) and urged this Court for dismissal of the writ petition.

5. I have heard learned counsel for the parties and appraised the paper books.

6. This Court while sitting in the roster dealing with the orders passed under various provisions of the 1952 Act have come across many writ petitions wherein on account of the failure of the parties of the establishment in not making the contributions of the employees, the consequential proceedings under Sections 7Q and 14B of 1952 Act when initiated are perpetually being challenged. It is also seen that appellate authority in certain cases looking into the financial conditions, if brought on record, had reduced not only to the extent of 60% or 70% but considerably to 25%. In the instant case no material has been placed on record to prima facie establish either before the assessing authority, appellate authority or before this Court that at the relevant point of time i.e., the period October,1980 to February, 2005 petitioner corporation was running into losses.

7. The argument of mens rea is no longer sustainable much less able to cut ice in view of the findings laid down in the judgment cited (supra) as in the cited judgment reliance has been laid to three-Judge Bench judgment of Supreme Court in Union of India and Others Vs. Dharmendra Textile Processors and others [(2008) 13 SCC 369] while examinin