RANAJANA Vs. GOVERNMENT OF MAHARASHTRA

JUDGEMENT

(1.) Rule Heard forthwith.

(2.) The following issue arises in this petition:-"are the respondents right in charging profession tax under the provisions of the maharashtra State Tax on Profession, trades, Callings and Employment Act, 1975 from the petitioners on the basis of ex-gratia received under a scheme of optional voluntary retirement, even after the relationship of employee, employer has come to an end on the employee retiring under the scheme of voluntary retirement on the ground of drawing constructive service between the date of voluntary retirement and the actual date of superannuation. "

(3.) All the petitioners were working with the Reserve Bank of India at its Nagpur branch. The Reserve Bank of India floated a scheme known as Optional Early Retirement scheme. The salient features of the scheme were that it was introduced with effect from 16th May, 2002 and was applicable to employee who have completed 25 years of full time regular service in the bank and have also completed 50 years of age. It was further clarified that only an employees who has completed 25 years of service and 50 years of age as on 1st August, 2003 (for convenience) , will be eligible to apply for retirement under the Optional Early Retirement Scheme. Under clause (g) , Income Tax was to be deducted at source on the entire amount payable as Ex- gratia. Clause 5 of the Scheme reads as under:-"ex-gratia payable: Upon acceptance of the application for early retirement under the scheme, the employee will be eligible for ex-gratia amount equal to Pay plus Dearness allowance for the number of years of actual service rendered at 60 days for each completed year of service or part thereof in excess of six months of Pay plus Dearness allowance for remaining months of service reckoned upto the date on which the employee would retire on superannuation, whichever is less. "as noted earlier the ex-gratia amount was payable in one lump-sum subject to recovery of Income Tax which was to be borne by the employee.