Deeming of dearness allowance as additional emoluments depends on post-appointed-day payment, not when the index rise occurred.

For Explanation I to Section 2(b) of the Additional Emoluments (Compulsory Deposit) Act, 1974, the deeming provision turns on the timing of the automatic payment of dearness allowance after the appointed day, not on when the cost of living index rise occurred. Where dearness allowance is linked to a cost of living index and becomes payable automatically after the appointed day in consequence of that linkage, it is treated as additional dearness allowance. A past index rise does not prevent the provision from applying if the payment itself accrues after the appointed day.

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Issues: Whether, for the purpose of Explanation I to Section 2(b) of the Additional Emoluments (Compulsory Deposit) Act, 1974, the rise in the cost of living index must occur after the appointed day, or whether it is sufficient that the automatic payment of dearness allowance consequent upon such rise takes place after the appointed day.

Analysis: Section 2(b) defines additional dearness allowance as dearness allowance sanctioned after the appointed day, and Explanation I is a deeming provision inserted to cover cases where dearness allowance is linked to a cost of living index. The controlling words in the Explanation are that any automatic payment after the appointed day, in consequence of a rise in the cost of living index, shall be deemed to be additional dearness allowance. The Explanation attaches the statutory consequence to the timing of the payment, not to the timing of the rise in the index. The linkage of dearness allowance to a past index period does not exclude the operation of the deeming provision if the payment becomes due after the appointed day.

Conclusion: It is not necessary that the rise in the cost of living index should occur after the appointed day. The automatic payment of dearness allowance made after the appointed day is deductible as additional dearness allowance.

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