EMPLOYEES PROVIDENT FUND ORGANISATION Vs. BPL LIMITED

JUDGEMENT

(1.) BPL Limited (the first respondent in the Writ Appeal and the petitioner in the Writ Petition) defaulted in payment of the employer's contribution to the employees' provident fund within time. The Company paid the contribution later, but delay occurred. The contribution payable was for the period from April 2003 to August, 2004.

(2.) As per Ext. P3 order dated 18.2.2005, the Assistant Provident Fund Commissioner, Calicut imposed a penalty under Section 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as 'the Act') read with para 32A of the Employees' Provident Funds Scheme. It is submitted that depending upon the extent of delay, the penalty varied from different periods and the maximum penalty imposed was 37%, the maximum provided under para 32A of the Scheme then in force. Challenging Ext. P3 order, BPL Limited filed appeal before the Employees Provident Fund Appellate Tribunal. The Tribunal dismissed the appeal as per Ext. P5 order dated 8.12.2010. BPL Limited approached this Court in W.P. (C) No. 7698 of 2011 challenging Exts. P3 and P5 orders. The learned single Judge, by the judgment dated 20.2.2013, reduced the damages to 25% of the amount assessed under Section 14B. The judgment of the learned single Judge is challenged in this Writ Appeal by the Employees Provident Fund Organisation.

(3.) It is well settled that the assessing authority has discretion in imposing damages by way of penalty under Section 14B of the Act read with para 32A of the Scheme. It is also well settled that various factors which disabled the assessee from paying the dues within the prescribed time is also a relevant factor to be taken into account. The authorities below mechanically imposed damages by way of penalty without properly applying their mind and it is evident on a perusal of Exts. P3 and P5 orders. The learned single Judge held that there was unprecedented financial crisis in the electronic industry at the relevant time and that discretion should be exercised to reduce the penalty by way of damages under Section 14B of the Act.