M/S. Tapasya Engineering Works PVT. LTD. vs. Regional Provident Fund Commissioner-Ii

WP/9536/2025HC BombayGSTCNR HCBM01036767202511 July 2025Bench: HON'BLE SHRI JUSTICE MILIND N. JADHAV5 pages

AI SummaryAllowed

Facts

M/s. Tapasya Engineering Works Pvt Ltd (Petitioner) challenged twin orders passed under Section 14B and 7Q of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (the said Act). The liability assessed was approximately Rs. 73.22 Lakhs under Section 14B and Rs. 35.73 Lakhs under Section 7Q. The Respondent, Regional Provident Fund Commissioner-II, attached the Petitioner's bank account and recovered approximately Rs. 57.45 Lakhs without prior notice. The Petitioner argued that the attachment crippled its operations and that the assessment occurred during the COVID period, with inadequate procedural fairness. A statutory appeal was filed before the CGIT-1, Mumbai, under Section 7-I of the said Act.

Held

The Court held that given the substantial amount of Rs. 57.45 Lakhs already recovered from the Petitioner's bank account against the twin impugned orders, and the pendency of the Petitioner's statutory appeal before the Appellate Authority, the appeal needed to be determined expeditiously. The Court was not inclined to ask the Petitioner to deposit any further amount to show bonafides. The recovered amount of Rs. 57.45 Lakhs would be held by the Respondent subject to the final decision of the statutory appeal. The Court directed that no coercive steps would be taken against the Petitioner for recovery of any further amount until the statutory appeal was decided. The bank account of the Petitioner was ordered to be immediately released from attachment. The CGIT-1 Mumbai was directed to decide the statutory appeal expeditiously, within six months, without being influenced by any observations made in this order. All contentions of the parties were expressly kept open.

Key Issues

1. Whether the Respondent's action of attaching the Petitioner's bank account and recovering Rs. 57.45 Lakhs without prior notice was arbitrary and high-handed, especially considering the assessment period was during COVID-19 and the Petitioner had filed a statutory appeal. Petitioner's arguments: The Petitioner contended that the assessment of liability during the COVID period was questionable, and the Respondent's claim of providing 26 hearing opportunities was insufficient, as mere adjournments without adjudication are not permissible. They argued that the Enforcement Officer's report should have been shared to enable them to present their case effectively. Furthermore, the Petitioner highlighted that the impugned order failed to consider correspondence regarding the adverse impact of post-GST slowdown, the COVID-19 pandemic, and business restructuring, which were crucial for determining waiver of damages and interest. They relied on the principle that statutory authorities must follow effective procedures and provide opportunities for appeal. Respondent's arguments: The Respondent acknowledged the recovery of Rs. 57 Lakhs from the Petitioner's bank account. No other specific arguments were recorded in the judgment for the Respondent.

Sections Cited

Section 14B, Section 7Q, Section 7-I

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

912. CIVIL WP-9536-25.docx Amberkar IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 9536 OF 2025 M/s. Tapasya Engineering Works Pvt Ltd .. Petitioner Versus Regional Provident Fund Commissioner-II .. Respondent ....................  Ms. Samiksha Kanani a/w Ms. Gayatri Naik a/w Pavish Waghmare, Advocates for Petitioner  Mr. Gunjan Chaubey a/w Mr. Vinay Kate, Mr. Chaitanya Shirasao & Ms. Chinanya Ningshen, Advocate for Respondent ................... CORAM : MILIND N. JADHAV, J. DATE : JULY 11, 2025 P. C. : 1. Heard Ms. Kanani, learned Advocate for Petitioner and Mr. Chaubey, learned Advocate for Respondent. 2. Twin orders passed under Section 14B and 7Q of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (for short "the said Act") are the subject matter of challenge in the present Petition. The liability assessed under Section 14B is approximately Rs. 73.22 Lakhs whereas the liability under Section 7Q is approximately Rs. 35.73 Lakhs. Admittedly Respondent has attached bank account of Petitioner bearing number 188505000147 in ICICI Bank, Panchpakhadi Branch on 26.06.2025 itself and on 26.06.2025 recovered rather transferred the amount of Rs. 57.45 Lakhs (approx) without notice to Petitioner. 1 of 5 912. CIVIL WP-9536-25.docx 3. Ms. Kanani, learned Advocate for Petitioner makes a grievance that Respondent has created a further lien on the said bank account thus crippling the functioning and operations of Petitioner. 4. On the merits of the case, it is prima facie seen that assessment of the liability is during the COVID period. It is alleged by Respondent that that total number of 26 hearing opportunities were provided during the said period which prima facie has been dealt with by this Court in similar matters wherein contention of Respondent has been outrightly rejected. Merely providing opportunities and adjourning the matters without adjudication cannot be done by the Statutory Authorities especially when allegation of the Authority is with respect to improper assessment due to delay in remittance of the statutory contributions / payments required to be effected by the Establishment. That apart the Enforcement Officer's report is also required to be shared with the establishment to enable the establishment to meet the case of the Assessing Officer and thus in that view of the matter, an effective procedure / provision for Appeal is provided to the establishment. 5. In the present case Ms. Kanani would inform the Court that Statutory Appeal has been filed, copy of which is appended at 28-70 of the Petition before CGIT-1, Mumbai under Section 7-I of the said Act. She would submit that Petitioner is a renowned industry established as 2 of 5 912. CIVIL WP-9536-25.docx far back as in 1986 and a well known establishment in the pharmaceutical industry rather a leading manufacturer of imports substitutes of pharmaceutical machinery for the past 40 years. She would submit that Petitioner is having all records and therefore it is inevitable that the decision making process prima facie appears to be failed and deficient in due diligence. She would submit that impugned order demonstratively effects the high handed arbitrariness and more specifically it does not consider the correspondence effected by Petitioner with respect to the adverse impact of post GST slowdown, the COVID 19 pandemic and the business restructuring undertaken through a business transfer agreement by Petitioner Company with M/s. Prochem Turnkey Solutions Pvt Ltd and effect of the same. She would submit that these issues would have to be determined for the purpose of considering the request made by Petitioner seeking waiver of the damages as also interest which are the subject matter of impugned orders in the present case. 6. Mr. Chaubey, learned Advocate appearing for Respondent in his usual fairness acknowledges the fact that amount of Rs. 57 Lakhs has been recovered from the bank account of Petitioner which has been

attached pursuant to the impugned order.

I have heard both the learned Advocates at the bar and with their able assistance perused the record of the case. 3 of 5

912.

CIVIL WP-9536-25.docx

Considering the aforesaid delineated facts and the fact that coercive action already taken against Petitioners has resulted in recovery of a substantial amount of Rs. 57.45 Lakhs as against the twin impugned orders passed under Section 14B and 7Q of the said Act, I am of the opinion that the Petitioner's Statutory Appeal filed before the Appellate Authority is required to be determined expeditiously. In the meanwhile, looking at the aforesaid facts, I am also not inclined to call upon the Petitioner to deposit any further amount to show its bonafides. The amount of Rs. 57.45 Lakhs which has been recovered by the Respondent against the impugned liability under Section 14B and 7Q shall be held by the Respondent subject to the final decision in the Statutory Appeal filed under Section 7-I by Petitioner.

It is directed that no coercive steps shall be taken against the Petitioner for recovery of any further amount until the Statutory Appeal is decided in accordance with law.

10.

At the request of Ms. Kanani, bank account of Petitioner bearing number 188505000147 in ICICI Bank, Panchpakhadi Branch is directed to be immediately released from the attachment. The Branch Manager of the said Bank is directed to act on a server copy of this order without waiting for any communication from the Respondent and ensure that the said account is immediately and forthwith 4 of 5

912.

CIVIL WP-9536-25.docx released from attachment and made available to Petitioner for its day to day operation and use.

11.

In view of the above observations and findings, no further coercive steps shall be taken against Petitioner in furtherance of the twin impugned orders passed under Section 14B and 7Q which are subject matter of the Petition and the Statutory Appeal filed before the CGIT-1, Mumbai.

12.

CGIT-1 Mumbai is directed by Court to determine the said Statutory Appeal as expeditiously as possible and in any event within a period of six months from today. All contentions of parties are expressly kept open and the said Appeal shall be determined without being influenced by any of the observations made in this order as directed.

13.

With the above directions, Writ Petition is allowed and disposed. Amberkar [ MILIND N. JADHAV, J. ] 5 of 5 RAVINDRA MOHAN AMBERKAR MOHAN AMBERKAR Date: 2025.07.11 19:10:32 +0530

Reproduced from the public record of the Bombay High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.