This writ petition is filed to call for the records of the 1st respondent in its Recovery Certificate bearing No.TN/CBE/Circle.88/RRC/Penal/Damages/9488/2003, dated 20.9.2004 and quash the same and forbear the respondents from initiating recovery proceedings against the petitioner company without following the due process of law as envisaged under Sec. 14(B) of the Employees Provident Fund and Miscellaneous Provisions Act.
2. The petitioner in this case is an establishment, which is required to comply with the provisions of the Employees Provident Fund and Miscellaneous Provisions Act 1952. There have been some delayed payment of Provident Fund Dues for which, a show cause notice-cum-levy order dated 2.9.2004 was issued in proceedings No. TN/CBE/PDC/9488/Cir.88/FLD/2004-05 demanding certain amount as penalty. Paragraph 6 of the notice reads as follows:-
" In case the employer want to be heard in person before remitting the damages he may send a written request to the undersigned within fifteen days from the receipt of this order and he will be given an opportunity of personal hearing. On the date of hearing, he may represent his case either in person or through an authorised representative. In case no written request is received seeking personal hearing within 15 days of receipt of this order it will be presumed and confirmed that the employer have no representation to make and the order shall deemed to be effective from date of issue of the order."
3. The show cause notice-cum-levy order dated 2.9.2004 was despatched only on 21.9.2004 as could be seen from the seal which is available on the face of the document enclosed in the typeset. Unfortunately, the respondents issued the recovery notice consequent to the above stated show cause-cum-levy order on 20.9.2004 itself i.e. even before the despatch of the show cause notice-cum-levy order and demanded a certain sum as penalty. Aggrieved thereby, the present writ petition has been filed stating that no opportunity as contemplated in paragraph 6 of the show cause notice-cum-levy order dated 2.9.2004 was given to the petitioner to put forward petitioner's case and therefore, the demand itself is in violation of Principles of Natural Justice and has to be set aside.
4. Learned counsel for the petitioner brought to the attention of this Court the decision of Division Bench reported in Kasthuri Mills (P) Limited rep. By Mr. Ravindra Amaratla - Vs. - Assistant Provident Fund Commissioner and another ( 2007 (1) CTC 201), wherein the Division Bench set aside the order demanding damages in a case where sufficient time was not given by the authorities to reply to the show cause notice. The present case is similar to the above stated case.
5. Learned counsel Shri. Vibishanan, appearing for the respondents stated that the recovery certificate is issued on 26.4.2005 after giving some time to the petitioner. He pointed out this mistake by referring to paragraph 8 of the counter affidavit. He stated that if the Court is inclined to set aside the recovery order, then the department can be directed to hear the petitioner on merits and decide the issue.
6. In the documents filed by the petitioner, the recovery certificate bears the date as 20.9.2004 and it has the seal of the office of the Provident Fund Commissioner. Along with it is enclosed the certificate issued under
Section 8(b) of the Act and it is also dated 20.9.2004. On the face of the recovery certificate dated 20.9.2004 issued by the respondents, it is clear that the same has been issued prior to the date of show cause notice-cum-levy order dated 2.9.2004 issued on 21.9.2004. Hence, the plea of the petitioner that no opportunity was granted has to be accepted. In the counter affidavit, it is stated that the recovery certificate is dated 26.4.2005 but without any proof or basis. The petitioner however states that such proceedings have not been communicated to him. The department has not clarified the confusion with regard to the date of the recovery certificate and therefore, the benefit of doubt in this case will enure to the petitioner. On the basis of the records placed before this Court, it is clear that the recovery certificate has been issued on a date prior to the date of despatch of the show cause notice-cum-levy order (i.e.) on 21.9.2004 and therefore, the same cannot be sustained. The impugned recovery certificate is set aside and the matter is remitted to the appropriate authority to decide the issue on merits based on the show cause notice -cum-levy order dated 2.9.2004 despatched on 21.9.2004. This writ petition is allowed. Consequently, WP.M.P.No. 11776 of 2005 is closed. No costs.
7. The petitioner is directed to submit his explanation if any to the show cause notice-levy order dated 2.9.2004 despatched on 21.9.2004, within a period of 15 days from the date of receipt of a copy of this order and the respondents will proceed thereafter in accordance with law.
8. A perusal of the decision of the Division Bench cited supra and from the records produced in this case, it is clear that the office of the respondents have failed to take proper care while sending such notices in time. The non observance of the procedure results in a number of writ petitions of this being filed whereby, the demands of the provident fund department is stayed by orders of the Court resulting in loss of revenue which can be otherwise avoided. Therefore, the competent authorities of the respondents shall ensure that any officer, who does not comply with the strict requirements of law, is suitably cautioned and steps be taken to collect the Provident Fund dues in time and suitable remedial action be taken against concerned persons to avoid such lapses in future.
ra To
1. The Asst. Provident Fund Commissioner (Damages Cell), Dr. Balasundaram Road, Coimbatore 641 018.
2. The Recovery Officer, Employees Provident Fund Organization, Dr. Balasundaram Road, Coimbatore 641 018