1997 (5) TMI 36

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.... Section 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (briefly " the Act "), as it stood in the assessment year 1974-75 relevant for the purpose of the case, provides that where an employer makes default in the payment of any contribution to the fund, the Central Provident Fund Commissioner or such other officer as may be authorised by the Central Government by notification in the Official Gazette in this behalf may recover from the employer by way of penalty such damages, not exceeding the amount of arrears as it may deem fit to impose. The Appellate Tribunal found that the Income-tax Officer disallowed a sum of Rs. 19,081 with the remarks : " Penalty of Rs. 19,081 relevant to previous year and not rel....

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....employer for the breach of the statutory obligation. The object of imposition of penalty under section 14B is not merely ' to provide compensation for the employees '. We are clearly of the opinion that the imposition of damages under section 14B serves both the purposes. It is meant to penalise defaulting employers as also to provide reparation for the amount of loss suffered by the employees. It is not only a warning to employers in general not to commit a breach of the statutory requirements of section 6, but at the same time it is meant to provide compensation or redress to the beneficiaries, i.e., to recompense the employees for the loss sustained by them . . . . . ." " The question whether any such impost is in essence compensatory....