CA X (Employer) v. Deputy Commissioner of Labour and others
(Gunasekera, J.)
Employees Provident Fund – Conclusiveness of certificate issued by DeputyCommissioner of Labour- Function and powers of Magistrate’s Court.
Sri Lanka Law Reports
(1991) 1 Sri L.R.
The Certificate filed by the Deputy Commissioner of Labour under section 38(2) ofthe Employees Provident Fund Act, No. 15 of 1958 as'amended by Act No. 8 of1971 for recovery of contributions and surcharge is conclusive. There is a statutorybar against the Magistrate permitting evidence to be called to question the correctnessof the statement contained in the certificate. The Magistrate's Court is a Court ofrecovery simpliciter.
The only permissible defences are:
the respondent has paid the amount due;
the respondent is not the defaulter;
the certificate has been filed in ajCourt which has no jurisdiction to initiaterecovery proceedings.
Cases referred to:
Mendis v. Commissioner of Income Tax 61 NLR 95
Mendis v. Commissioner of Income Tax 53 NLR 280
Hamid v. Commissioner of Inland Revenue 71 NLR 563
Isurial v. Commissioner of Inland Revenue (1982) Sri LR 222
APPLICATION in revision of the order of the Magistrate of Mount Lavinia.
N. A. Kumaratunga, S.S.C. for the petitioner
M. Uvais tor respondent.
MAY, 1991
The Deputy Commissioner of Labour filed a certificate (marked 'XT)under section 38(2) of the Employees Provident Fund Act No. 15 of1958 as amended by Act 8 of 1971 against the RespondentCompany in the Magistrate's Court of Mt. Lavinia for the recoveryof a sum of Rs. 552,279.17 as contributions and surcharge againstthe said Company.
The learned Magistrate by order dated 24.08.84 allowed evidenceto be led to challenge the certificate of ‘XT on the footing that theRespondent Company has not been duly assessed.
In his order he has considered the three matters on which thecertificate can be possibly challenged. Firstly that the Respondent haspaid the amount due, secondly that he is not the defaulter namedin the certificate, thirdly, that the certificate has been filed in the
Attorney General v City Carriers Limited (Palakidnar, J.)
Court which has no jurisdiction to initiate recovery proceedings. Thesedefences have been set out in Mendis vs Commissioner of IncomeTax (1) by Sansoni, J, as he then was.
The learned Magistrate thereafter proceeded in his order to state thathe would permit evidence to be led to show that the assessmentwas not duly made. It is against this ruling that the Petitioner hasmoved for a revision of the order.
These proceedings were initiated by the Commissioner of Labour inthe Magistrate's Court under section 38(2) of the EmployeesProvident Fund Act. A certificate issued for the recovery of the sumdue contains the particulars of the sum due. The Magistrate shalltherefore summon such employer to show cause as to why furtherproceedings should not be taken against him for the recovery of thesum due.
These proceedings are recovery proceedings simpliciter. Furtherproceedings would be the recovery of the amount due as a fine andsteps under section 291 of the Criminal Procedure Code. Cause canbe shown by the party summoned before a Magistrate to show thatthe sum is not due as it has been paid on adducing proof ofpayment. The party summoned can also show by way of cause thathe is not the defaulter. The illustration is borne out by decidedauthority in the case of Mendis vs the Commissioner of Income Tax
. In that case a vicarious liability sought to be imposed on thepersonal representative of a company was resisted on the groundthat he was not liable to pay in so far as he is not the defaulter.Gratiaen, J held that this was permissible. That position does notarise in this case.
In all the other cases cited by the Respondent the principle thatthe correctness of the certificate shall not be called in question orexamined by the Court in any proceedings under this section hasbeen affirmed. Sirimanne, J in Hamid vs Commissioner of InlandRevenue (3) reiterates this principle.
Subsection (3) of section 38 states thus:
“The correctness of any statement in a certificate issued by theCommissioner is any proceedings under this section shall not be
Sri Lanka Law Reports
(1991) 1 Sri L.R.
called in question or examined by the Court in any proceedingsunder this section and accordingly nothing in this section shallauthorise the Court to consider or decide the correctness of anystatement in such certificate and the Commissioner's certificateshall be sufficient evidence that the amount due under this Actfrom the defaulting employer has been duly calculated and thatsuch amount is in default."
The plain wording of this relevant subsection does not admit of anyargument that the sum shown to be due has to be accepted ascorrect and recovered by the Magistrate. To accept the argument thatthe certificate is not conclusive evidence that the sum due has beenduly calculated would require the Magistrate to hold a new inquiryinto the liability and actual amount due which is the very situationthat the statute seeks to prevent.
Under Part V of the Act claims under the Act can be determinedby the Commissioner under section 28 of the Act. There is provisionfor appeals under section 29(1) of the Act to a Tribunal. There isfurther provision for review of such decision of the Tribunal by theCourt of Appeal-vide section 29(1) & (2). In the light of theseprovisions the sum referred to in the certificate has to be deemedto be duly calculated. The statutory bar prevents a Magistrate fromleading evidence to call in question the correctness of the statementcontained in the certificate.
I do not think that the decision in Isurial vs Commissioner of InlandRevenue (4) has given a ruling that such a challenge to thecorrectness of the statement in permissible under the Inland RevenueAct in the Magistrate's Court.
The provisions of the Inland Revenue Act and the Co-operativeSocieties Act also provide for certificates to be issued by theCompetent Authority to the Magistrate for recovery of sums due. Thewording in these analogous provisions are identical. This questionhas arisen more often in Income Tax matters. It has also been raisedin provisions under the Co-operative Ordinance. I do not find thatthe principle that the Magistrate's Court is a Court of recoverysimpliciter has been deviated from in any one of these decisions.
Ramasamy v British Ceylon Corporation
I therefore allow the petition in revision and set aside the ruling ofthe learned Magistrate and direct that he proceed to recover the sumdue under provisions of the Criminal Procedure Code. The applicationis allowed with costs.
Application allowed.