TaxTMI 
TaxTMI 
2012 (11) TMI 785
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....tshell is that it is an Association of executives employed by opp. Party no.2-Coal India Limited and opp. Party no.3 -Mahanadi Coal Fields Limited (subsidiary of Coal India Limited) and it is registered under the Trade Union Act, 1926. By order of opp. Party nos. 2 and 3, they are working at Talcher and opp. Party no.3 allots residential accommodation and provides other amenities without any discrimination to all employees irrespective of class they belong to. From the salary of the employees, Opp. Party nos. 2 and 3 deduct income tax U/s.192 and deposit the same with the Central Government. The opp. Parties by an unreasonable classification, discriminate the members of the petitioner-Association in taking decision not to reimburse the tax deducted and paid on that part of the house rent allowance (hereinafter mentioned as 'perquisites'), while it is reimbursing same to the non- executives by paying an equivalent amount known as "up-keep allowance". 3. Clause 9(a) of the Coal Mines Regulation, 1957 provides for suitable residential accommodation for the Manager and the under- Manager or Assistant Manager within a distance of five kilometers from all mine openings, and every M....
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.... for the petitioner submitted that the order passed under Annexure-1 is hit by Articles 14 and 19 of the Constitution of India by making a hostile discrimination between the non-executive and executive employees. An arbitrary decision has been taken under Annexure-1 relying on un-tested materials and without hearing the members of the petitioner-Association. Opp. Party no.1 passed the impugned order taking into consideration the ex parte materials, like the restraint on it not to pay more than 50% allowance. 6. Further, placing reliance upon the cases in Rupa Ashoka Hurra v. Ashok Hurra and another, (2002) 2 SCC 388 and Maneka Gandhi v. Union of Inida (1978) 1 SCC 248, Mr. Mohanti submitted that the decision rendered in violation of audi altaram partem is null and void. In support of his above contention, he also relied upon some other judgments of the Hon'ble Supreme Court. 7. Placing reliance on the decision of the Hon'ble Supreme Court in Arun Kumar V. Union of India and others, 2007 (1) SCC 732, Mr. Mohanti submitted that though Rule 3 is intra vires, valid, but it is always open to the assessee to contend that there is no concession in the matter of accommodation prov....
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.... house rent to its employees. 9. Mr. Ray further submitted that the impugned order passed under Annexure-1 is a reasoned order. If the petitioner-Association's claim for up-keep allowance will be accepted, it will exceed the ceiling of their basic pay and therefore, it will be in violation of Presidential directive and service conditions. It is also submitted that there is no hostile discrimination as alleged since executive and non-executive are two different classes and are totally different right from entering into their services with regard to the nature of duties rendered, pay scale, perquisite. Hence, the allegation made by the petitioner is totally false, frivolous and liable to be rejected. Opp. Party no.1 after considering all aspects and with due application of mind disposed of the representation rejecting the petitioner's claim for granting up-keep allowance with a well-reasoned order and therefore, the petitioner has no justifiable reason to allege that they have been subjected to hostile discrimination by refusing to grant up-keep allowance. There is huge disparity between the pay scale of the executives and non-executives and the executives are paid up to 50% of th....
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.... distinguish persons or things that are grouped together from others leaving out or left out and such a difference must have rational nexus to the object sought to be achieved by the statute or legislation in question. 14. Petitioner's further case is that both Executive and Non- Executive even taken from different sources, but for the purpose of their pay, service condition, discipline and other perquisites like provision of quarters, education to the children of the employees, facility of medical treatment for the employees and their dependents, recreation etc. are same. 15. The case of opposite parties is that there are two categories of employees working in Mahanadi Coalfields Ltd. One is Executive and the other is Non-executive (Workmen). The entry of executives and non-executives are from two different sources. The executives are posted as Executive Management Trainees in E1 grade, whereas normally the non-executives are posted as general mazdoors Cat-1 which is the lowest non-executive pay scale. In so far as Executives are concerned, the pay and allowances are fixed as per guidelines issued by Department of Public Enterprises, Government of India and so far as non-exe....
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....ee. The court further held that natural justice implies to a duty to act fairly, i.e., fair-play in action. 18. The expression 'civil consequence' encompasses infraction of not merely property of personal rights but of civil liberties, material deprivations and non-pecuniary damages. Under its wide umbrella comes everything that affects a citizen in his civil life. Unless a statutory provision either specifically or by necessary implication excludes the application of principles of natural justice, because in that event the court would not ignore the legislative mandate, the requirement of giving reasonable opportunity of being heard before an order is made, is generally read into the provisions of a statute, particularly when the order has adverse civil consequences for the party affected. The two fundamental maxims of natural justice are- (i) audi altarem partem and (ii) nemo judex in causa sua. Thus, the observance of principles of natural justice is the pragmatic requirement of fair play in action. 19. Petitioner's specific case is that the employer provides residential accommodation to the employees. Opposite Party Nos. 2 and 3 deduct tax at source under Sec....
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....not an income. The nature of the income in respect of accommodation provided by the employer cannot be decided in the writ petition because the relevant material can be more factually examined by the Assessing Authority. This Court cannot examine the materials as an original forum. 24. At this juncture, it is necessary to extract here the relevant portion of Section 192 of the Act: "192.(1) Any person responsible for paying any income chargable under the head "Salaries" shall, at the time of payment, deduct income-tax on the amount payable at the average of income tax computed on the basis of the [rates in force] for the financial year in which the payment is made, on the estimated income of the assessee under this head for that financial year." 25. Salary includes perquisites as provided under Section 17(1) of the I.T. Act and under Section 17(2)(i) 'perquisite' includes the value of rent free accommodation provided to the assessee by his employer. Valuation of the rent free accommodation is done according to Rule 3 of the I.T. Rules, 1962. 26. It is further necessary to extract the relevant portion of Section 197 of the Act: "197. Certificate for deduction at lower....