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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 9TH DAY OF JULY 2013
BEFORE
THE HON'BLE MR.JUSTICE DILIP B. BHOSALE
W.P.NO.47452/2012(L-KSRTC)
BETWEEN
KARNATAKA STATE ROAD TRANSPORT CORPORATION BANGALORE CENTRAL DIVISION BANGALORE BY ITS DIVISIONAL CONTROLLER REPRESENTED BY ITS CHIEF LAW OFFICER
... PETITIONER (BY SMT. H.R.RENUKA, ADVOCATE)
AND
THE DEPUTY LABOUR COMMISSIONER AND THE APPELLATE AUTHORITY UNDER THE PAYMENT OF GRATUITY ACT BANGALORE, REGION-2 KARMEEKA BHAWAN BANNERGHATTA ROAD BANGALORE
THE ASSISTANT LABOUR COMMISSIONER AND CONTROLLING AUTHORITY UNDER THE PAYMENT OF GRATUITY ACT DIVISION-4, KARMEEKA BHAWAN BANNERGHATTA ROAD BANGALORE
RAFEEQ AHMED S/O ABDUL AZEEZ ADULT, NO.15/1, 5TH MAIN ROAD 2ND CROSS, VASANTHAPPA BLOCK
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GANGANAGAR, LALBAGH ROAD K.S.GARDEN BANGALORE
... RESPONDENTS
(BY SRI H.VENKATESH DODDERI, AGA FOR R1 AND 2; SHRI LAKSHMAN RAO, ADVOCATE FOR R3)
THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ORDER DATED 29.9.2010 VIDE ANNEXURE-A PASSED BY THE SECOND RESPONDENT AND QUASH THE ORDER DATED 24.7.2012 VIDE ANNEXURE-B PASSED BY THE FIRST RESPONDENT.
THIS PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:-
P.C.
Heard learned Counsel for the parties. By this writ petition, the petitioner-Corporation impugns the order dated 24.07.2012, passed by the Deputy Labour Commissioner and the Appellate Authority under the Payment of Gratuity Act. The only contention urged by the learned Counsel for the petitioner-Corporation is that the Appellate Authority after having held that the deduction of income tax on the amount of gratuity exceeding Rs.3,50,000/-is permissible, did not deduct the income tax from the amount of gratuity.
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She submits that the Corporation while making payment of the gratuity amount to the respondents had deducted income tax on the amount exceeding Rs.3,50,000/- and the amount deducted was deposited with the income tax department.
In support of her contention, she invited my attention to the following observations made by the Appellate Court: “The plea with regard to the deduction of Income Tax of Rs.25,353 on the ground that the gratuity received by the respondent exceeded Rs.3,50,000 has been turned down by the controlling authority and a direction has been turned down by the controlling authority and a direction has been turned down by the controlling authority and a direction has been issued to pay Rs.63,350 by including this amount along with the difference in gratuity amount. This authority finds it necessary to interfere with this order by modifying the order of controlling authority. This is for the reason that the Hon’ble High Court of Karnataka has held that it is permissible to deduct income tax in the event the amount exceeds Rs.3,50,000.
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Hence the order of the controlling authority directing to pay the deduction made towards Income Tax to the applicant has been modified, I hold that the deduction towards Income Tax effected by the appellant is justified. In terms of the order passed by the controlling authority as per the Gratuity regulations of the corporation, the gratuity is determined at Rs.4,33,801 for total service of 30 years 10 months and in that by deducting the amount of Rs.3,95,848/- paid to the workman, it is held that the respondent workman is entitled to get difference in gratuity of Rs.37,953.”
Despite the aforementioned observations made by the Appellate Authority, the amount of income tax was not deducted by the Appellate Authority which is evident from the operative portion of the order which reads thus: “1. In exercise of the powers conferred under Payment of Gratuity Act 1972 r/w Karnataka Rules 1973, I E.Lakkappa, Deputy Labour Commissioner and Appellate Authority under the payment of Gratuity Act
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reject the appeal of the appellant for the reasons stated above. 2. The order passed by the Assistant Labour Commissioner and Controlling Authority, Division 4, Bangalore, in case No.ALCB4/PGA/CR/262/07-08 dated 29.9.2010 is modified insofar as it relates in the matter of Income Tax, hereby direct the appellant to pay the applicant Sri Rafiq Ahmed a sum of Rs.37,953 towards difference in gratuity with 10% interest p.a. from the date of application i.e. 31.10.2007. 3. There is no order as to costs.”
Insofar as the error committed by the Appellate Authority is concerned, the learned Counsel for the respondents could not and did not dispute it. He however submitted that the deduction of Rs.25,353/- towards the income tax, having regard to the total amount, was on the higher side. Having considered the submission of learned Counsel for the parties and the order passed by the Appellate Authority, I am satisfied that the following order shall meet the ends of justice.
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The order dated 24.07.2012, insofar as the plea with regard to deduction of income tax of Rs.25,353/- is concerned, is set aside. The appellate authority shall consider the matter afresh after granting an opportunity of being heard to learned Counsel for the parties. He shall deal with the issue in accordance with law. The Appellate Authority shall decide the matter, as aforementioned, as expeditiously as possible and preferably within a period of 12 weeks from the date of receipt of this order. The petitioner to produce copy of this order before the Appellate Authority within a period of two weeks from today. All contentions are kept open.
Sd/-
JUDGE
Yn.