The exercise of powers under Section 14B must be reasonable, and the absence of a limitation period does not justify arbitrary actions leading to irretrievable prejudice.

JUDGMENT AND ORDER

1. By the present writ petition, challenge has been put to a notice dated 21.10.2021, issued by the respondent wherein it has been alleged that the petitioner made certain payments for the period 01.04.1996 to 31.03.2014, after the respective due dates and as such, the petitioner was liable to pay penalty and interest under Section 14B and 7Q of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter referred to as the Act). Thereafter, in the proceedings that ensued, vide order dated 03.02.2023, under Section 14B of the Act, the petitioner was found liable to pay damages amounting to Rs.41,73,951/- and by another order of the same date passed under Section 7Q of the Act, the petitioner has been found liable to pay interest amounting to Rs.18,83,923/-. The petitioner on the ground that the aforesaid proceedings and orders passed therein, being without jurisdiction, inasmuch as, recovery was sought for a period beyond 25 years is therefore before this Court by way of the instant writ petition.

2. Mr. S. Jindal, learned counsel for the petitioner has submitted that by the impugned notice dated 21.10.2021, the respondent had indicated the period of scrutiny to be from 01.04.1996 to 31.03.2014, wherein it was found that certain payments were made after the respective due dates, which made the petitioner liable to payment of damages and interest. Thereafter, it is submitted the petitioner appeared before the respondent on several dates for hearing, and it was stated by the petitioner before the respondent that the delay if any, was not intentional but on account of change from the CDA pattern to IDA pattern on the applicable scales of pay. It has further been submitted that as the queries from the respondent required the production of bank statements for the period 1996 to 2001, the same though on being requested from the bank, could not be obtained, as the records pertained to the periods before the bank was computerized, which communicated the same vide letter dated 14.12.2021 (Annexure -3), It is also submitted that, it was pointed out to the respondent that it was not possible to trace out records or documents of the last 15-25 years, and as such, it was prayed that the respondent close the proceedings on the ground that the demand was for very old cases. As due to the circumstances, it was impossible to produce the relevant records, it is submitted that the petitioner by a letter dated 25.05.2022, addressed to the respondent, highlighted the fact that exercise of powers under Section 14B of the Act, was to be within a reasonable period of time and not for periods that extend beyond 25 years, which would result in irretrievable prejudice being caused. However, he submits that there was no acknowledgement to the said letter, and the result was in the impugned orders being passed.

3. It is then contended that even though Section 14B itself, does not contemplate any period of limitation, it would be an unjust and unfair exercise to order for production of documents for the period stretching as far back as 26 years. To support his contention with regard to ‘reasonable period’ and ‘irretrievable prejudice’ learned counsel has placed reliance on the following judgments.

(i) Regional Provident Fund Commissioner, Jalpaiguri vs. Darjeeling Dooars Plantation (Tea) Limited & Anr. reported in 2015 SCC OnLine Cal 6868 (ii) Presidency Kid Leathers (Private) Ltd. vs. Regional Provident Fund Commissioner, Madras reported in 1997(3) LLN 381 (iii) Gandhidham Spinning and Manufacturing Company, Ltd. vs. Regional Provident Fund Commissioner & Anr. reported in 1986 SCC OnLine GUJ 68 (iv) Hindustan Times Ltd. vs. Union of India & Ors. reported in (1998) 2 SCC