PF Arrest Provisions
PF Arrest Provisions
PF Arrest Provisions
8, 8-B and 8-G read with Rule 4 and Rule 73 of the Second Schedule of
the Income Tax Act, 1961.
(b) xxx
specified therein from the establishment or, as the case may be, the
employer by one or more of the modes mentioned below:-
1. Xxx
2. Arrest of the employer and his detention in prison;
3. Xxx
Section 8-G makes the Second and Third Schedules of the Income Tax
Act, 1961 and Income Tax (Certificate Proceeding) Rules, 1962,
applicable mutatis mutandis in terms of any arrears as mentioned in
Section 8 of the PF Act. Rule 4 of the Second Schedule of the Income
Tax Act, 1961 lays down substantially similar modes of recovery as
compared to those laid down in Section 8-B. Under the Income Tax
Act, when a certificate of Recovery is issued, the Recovery Officer
must send a Notice to the defaulter under Rule 73 (1) of the Second
Schedule of the Act to pay the dues within the time specified in the
Notice, and if payment is not made, Rule 4 lays down Modes of
Recovery. The said Rule 4 of the Income Tax Act reads as under:
4. Mode of Recovery-
If the amount mentioned in the notice is not paid within the time
specified therein or within such further time as the Tax Recovery
Officer may grant in his discretion, the Tax Recovery Officer shall
proceed to realize the amount by one or more of the following modes:
A Division Bench of the Hon’ble Punjab & Haryana High Court was
pleased to hold in Mohan v. Regional Provident Fund Commissioner & Anr.
[2002 III LLJ page 779] that the modes of recovery are alternative and not
exhaustive, and that the Recovery Officer can adopt any of the recovery
modes. There is no bar in adopting the mode of arrest and detention, i.e.
civil imprisonment, before exhausting other modes under the PF Act. The
Hon’ble High Court was pleased to observe that:
The Hon’ble Bombay High Court has stated, however, that the power to
order arrest and detention is not absolute and unfettered. Section 8-B
read with Section 8-G require reference to the relevant provisions of the
Income Tax Act, 1961. The arrest and detention must be made in
accordance with the provisions of Rule 73 of the Second Schedule of
the Income Tax Act, which requires the issuance of a Notice to Show
Cause. The relevant provisions for Arrest and Default under Part V of the
Second Schedule of the Income Tax Act are as under:
73. (1) No order for the arrest and detention in civil prison of a
defaulter shall be made unless the Tax Recovery Officer has
issued and served a notice upon the defaulter calling upon
him to appear before him on the date specified in the notice
and to show cause why he should not be committed to the civil
prison, and unless the Tax Recovery Officer, for reasons recorded in
writing, is satisfied—
(a) that the defaulter, with the object or effect of obstructing the
execution of the certificate, has, after [the drawing up of the
certificate by the Tax Recovery Officer], dishonestly transferred,
concealed, or removed any part of his property, or
(b) that the defaulter has, or has had since [the drawing up of
the certificate by the Tax Recovery Officer], the means to pay
the arrears or some substantial part thereof and refuses or
neglects or has refused or neglected to pay the same.
Hearing.
the satisfaction of the Tax Recovery Officer for his appearance when
required.
Order of detention.
76. (1) Upon the conclusion of the inquiry, the Tax Recovery
Officer may make an order for the detention of the defaulter
in the civil prison and shall in that event cause him to be
arrested if he is not already under arrest:
(2) When the Tax Recovery Officer does not make an order of
detention under sub-rule (1) he shall, if the defaulter is under arrest,
direct his release.
The Hon’ble Bombay High Court in Kanaiyalal Prabhudas Maru & Ors. V.
RPF Commissioner & Ors. [(2002) I LLJ page 297] and in ATV Projects
India Ltd. v. Office of the RPF Commissioner [(2005) I LLJ page 1046] was
pleased to set aside the orders for arrest on the grounds that they were
not in accordance with the requirements of Rule 73 and that they were,
therefore, arbitrary.
which specifically provides that no order for the arrest and detention in a
civil prison of a defaulter could be made unless the Tax Recovery Officer
has issued and served a notice upon the defaulter calling upon him to
appear before him on the date specified in the notice and to show cause as
to why he ought not to be committed to Civil Prison. The court also said
the notice under Rule 73 is issued for the recovery of the tax dues
determined under Section 222 of the Income Tax Act and it is a recovery
proceeding and that the petitioner is not sought to be prosecuted for the
alleged offence under Section 276-C of the Act.
Dismissing the plea, the court said as the issuance of notice is under Rule
73 of the Second Schedule of the Income Tax Act, the petitioner is not
accused of committing any non-bailable offence and the said notice does
not give rise to any apprehension of immediate arrest so as to invoke
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