JAGANNATH SAHU Vs. REGIONAL PROVIDENT FUNDS COMMISSIONER BHUBANESWAR

JUDGEMENT

(1.) In this writ petition-prayer has been made for quashing Annexure 5, a notice of demand for payment of contribution of Rs. 32,233/- to the employees' provident funds and Rs. 925/- as administration charges determined by the Regional Provident Funds Commissioner, Orissa (opposite party) in a proceeding S. 7A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as the 'Act') by order dated 28-4-1979.

(2.) The facts may be stated in brief. The petitioner is the managing partner of M/s. Sahu Transport Corporation of Jajpur Road, Cuttack which is a partnership firm constituted by the deed of partnership (Annexure-1) on 1-41968 to carryon business in transport of goods and passengers, the constituents of which are the three brothers who had separated by Court decree in the year 1958. Prior to the constitution of the partnership firm, the three brothers were carrying on transport business individually, but as they found it growing difficult to continue as such on account of various problems they pooled their assets and resources together in order to carry on the business in partnership. By demand notice dated 18-12-1971, the opposite party called upon the petitioner to pay provident fund contribution and administration charges for the period from May, 1968 up to Dec., 1970. The demand notice was challenged in O.J.C. No. 312 of 1971 and by order dated 9-8-1972 it was quashed leaving it open to the opposite party to initiate a fresh enquiry in course of which the petitioner claimed exemption for payment of contribution and administration charges for the infancy period under S. 16(1)(b) of the Act for a period of five years. The petitioner's claim was not accepted and by order dated 19-2-1976 of the opposite party there was fresh demand of contribution to the provident fund and administration charges. This order was challenged in O.J.C. No. 204 of 1976 which was disposed of by order, Annexure-4 with the observation that there had been no determination of the petitioner's liability in terms of S. 7-A of the Act and it was open to the petitioner to challenge its liability at the time of assessment. It was thereafter that there was fresh assessment of liability by the impugned order dated 28-4-1979 and demand of contribution to the provident fund to the tune of Rs. 32,233/- and administration charges to the tune of Rs. 925/- culminating in the impugned 'demand notice (Annexure-5) for the period beginning from 1968 to 1973 which has been challenged in this writ petition. It is the contention of the petitioner that the partnership firm was a new legal entity and so during the infancy period of five years it is exempted from payment of contribution to the employees' provident fund as well as administration charges under S. 16(1)(b) of the Act.

(3.) The opposite party in its counter stated that the three brothers doing individual transport business constituted the partnership firm to carry on the same business collectively using the same vehicles, staff, stores, assets and movables. As a matter of fact, all their individual assets and liabilities were transferred and taken over to the partnership. business with effect from the date of its constitution. So, it is apparent that the three brothers continued their transport business in a different garb and form and so it cannot be said that the partnership business was started a new so as to be entitled to the exemption envisaged under S. 16(1)(b) of the Act. As more than forty employees were working as per the report of enquiry on 1-4-1968 and 8-7-1970, the petitioner was liable to pay contribution to the provident fund as well as administration charges as determined under S. 7-A of the Act. Therefore, the impugned order passed in accordance with law, as well as the demand notice (Annexure 5) cannot be quashed.