ORDER

This Writ Petition has been filed challenging the order passed by the first respondent, thereby allowed the appeal filed by the second respondent.

2. Heard the learned counsel appearing for the petitioner and the learned counsel appearing for the second respondent and perused the materials available on record.

3. The second respondent firm is covered under the Employees Provident Funds and Miscellaneous Provision Act, 1952 (herein after referred to as the “Act”). It failed to remit the Provident Fund and Insurance Fund dues with all eligible components of wages for the period from March 2011 to September 2012. In order to determine the amount payable in respect of the second respondent, an enquiry was initiated under Section 7A of the Act. The second respondent was also duly served with a notice dated 09.08.2012 for a personal hearing to determine the contributions. During enquiry, the second respondent stated that the House Rent Allowance, Washing Allowance and Conveyance Allowance were not taken into account for Provident Fund contribution since it is not being paid uniformly to all employees. It is also stated that only its workmen were paid allowances for washing their uniforms which is not paid to other staffs.

4. They also admitted that the wages and dearness allowance leaving the wage components of City Compensatory Allowance and Washing Allowance. The Enforcement Officer, during investigation, found that the Provident Fund has not been contributed on City Compensatory Allowance, Washing Allowance and House Rent Allowance and also been split up into basic, fixed Dearness Allowance, variable Dearness Allowance, House Rent Allowance, City Compensatory Allowance and Washing Allowance. Further, they had also been shown 30% to 60% of the basic wages in respect different categories of employees. Accordingly, the Enforcement Officer has submitted his report.

5. During enquiry, the second respondent had contended that

70% of the PF contribution is being paid to the employees. Based on the records, it is observed that the second respondent had split up the wage components as basic wages, fixed DA, variable DA, HRA, CCA and Washing Allowance. It has not substantiated it with material records to split up the wage components with basic pay. The HRA paid to the employees are not uniform to all the category of employees and the reasons for such variations has not been established by the terms of contract of the employment. They have no justification to split up the pay package and categorizing HRA to an extent from 30% to 60% of total wages. Therefore, it cannot be accepted that the second respondent is paying HRA to the employees at certain fixed percentage which is not attracting the payment of PF.

6. Inspite of split up of wage components, under various nomenclatures it is felt proper and just to arrive at a conclusion that the salary/wages has been split up with a view to subterfuge the PF contributions and thus the wages has to be limited to the ceiling of Rs.6500/- for arriving at the dues payable and disallowing the disproportionate HRA. Without considering the above, the Appellate Authority, viz., the first respondent, allowed the appeal filed by the second respondent.

7. The learned counsel appearing for the petitioner would submit that the Hon'ble Supreme Court of India in the case of Bridge & Roof Co India Ltd case reported in (1962) 2 LLJ 490 held that to satisfy the definition of basic wages, the allowance should satisfy the “test of universality”. Therefore, the Washing Allowance is also a part of basic wages, since it is liable for PF deductions. The second respondent also failed to remit the Provident Fund and Employees Pension Fund Contributions and Administrative charges towards Provident Fund and Insurance Fund dues with all eligible components of wages for the period from March 2011 to September 2012 in order to determine the amount payable in respect of the second respondent.

8. A perusal of the counter filed by t