Transferee Liability Under EPF Act Limited To Assets Received | HC

Case Details: Varun Tea Plantations Ltd. vs. Regional Provident Fund Commissioner - [2025] 181 taxmann.com 445 (HC - Calcutta)

Judiciary and Counsel Details

• Shampa Dutt (Paul), J.
• Pramit Bag, Victor Chatterjee, Ms. Uma Bagree and Aasish Choudhury for the Petitioner.
• Shiv Chandra Prasad for the Respondent.

Facts of the Case

In the instant case, the petitioner took over a tea estate on lease from the Government of West Bengal. Subsequently, the respondent authorities initiated proceedings under section 14B of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, for the period during which the tea estate was under the control of the previous owner.

Respondent No. 1 imposed damages upon the petitioner. The petitioner preferred an appeal before the Employees’ Provident Fund Appellate Tribunal. The Tribunal directed the petitioner to pay 60 per cent of the levied damage. Thereafter, the petitioner filed a writ petition challenging the Tribunal’s order.
The petitioner contended that since his balance sheet showed a ‘negative balance’, he was entitled to relief as per the proviso to section 17B of the Act, which shall be limited to the value of assets received by him by such transfer.

High Court Held

The High Court held that, since the petitioner took over the company with knowledge that its assets were negative, he could not be held liable beyond the value of the assets received by him in the transfer.

However, keeping in mind the relief available to the petitioner under the proviso to section 17B of the Act, the petitioner was directed to pay the amount as directed by the Tribunal within three months from the date of the instant order, with liberty granted to the petitioner to proceed against the previous owner to recover the amount as paid by the petitioner.

List of Cases Referred to

• Arambagh Hatcheries Ltd. v. Employees’ Provident Fund Organisation [2012] 9 taxmann.com 510 (Calcutta) (para 8)
• Central Board, Employees’ Provident Fund Organization v. Employees’ P.F. Appellate Tribunal [2016] 11 taxmann.com 879 (Calcutta) (para 8)
• West Bengal Power Development Corporation Limited v. Union of India [2022] 12 taxmann.com 1312 (Calcutta) (para 8)
• Regional Provident Fund Commissioner v. Karnataka Forest Plantations Corporation Ltd. 200 (2) L.L.N. 250 (para 8)
• Tepcon International (I) Ltd. v. Regional Provident Fund Commissioner [2016] 11 taxmann.com 854 (Calcutta) (para 8)
• Dalgaon Agro Industries Ltd. (Now known as Tasati Tea Ltd.) v. Union of India [2006] 2005 taxmann.com 2816 (Calcutta) (para 9).