Page 115 - DMGT306_MERCANTILE_LAWS_II

Mercantile Laws – II

Notes Self Assessment

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16. The officer conducting the inquiry under sub-section (1) shall, for the purposes of such
inquiry have the same powers as are vested in a court under the code of ...........................
Procedure, 1908 (5 of 1908).
17. A ........................... from whom the amounts mentioned in sub-section (1) may be recovered
in respect of any employee employed by or through him.
18. The amount of contribution that is to say, the ........................... contribution as well as the
employee’s contribution in pursuance of any Scheme and the employer’s contribution in
pursuance of the Insurance Scheme.

6.7 Penalties under this Act

When an employer fails to remit the dues under the Scheme within 15 (20 days with 5 days grace
period) days of the close of each month the employer will be liable, to pay penal damages as
maybe determined by the Regional Commissioner (RC) not exceeding 37% of the arrears.

Did u know? Any amount outstanding from the employer can be recovered by the Regional
Commissioner as an arrear of land revenue. The powers for revenue recovery and issue of
recovery certificates are vested with the Regional Commissioner (with effect from
1/7/90).
An employer who fails to remit the contributions and administrative charges and or submit the
monthly and other periodical returns is liable to be prosecuted under Section 14 of the Act. For
failure to remit employees share recovered from the wages, the employer shall also be liable for
prosecution under Section 406/409 of the I.P.C.
The employers are liable for action under the penal provisions of the Act in case they default
compliance with the provisions of the Scheme. This is apart from the provisions relating to levy
of penal damages and recovery of the outstanding dues as revenue under the Revenue Recovery
Act:
(1) Whoever, for the purpose of avoiding any payment to be made by himself under this Act, the
Scheme, the Pension Scheme or the Insurance Scheme or of enabling any other person to avoid
such payment, knowingly makes or causes to be made any false statement or false representation
shall be punishable with imprisonment for a term which may extend to one year, or with fine of
five thousand rupees, or with both.
(1A) An employer who contravenes, or makes default in complying with, the provisions of
section 6 or clause a of sub-section (3) of section 17 insofar as it relates to the payment of
inspection charges, or paragraph 38 of the Scheme insofar as it relates to the payment of
administrative charges, shall be punishable with imprisonment for a term which may extend to
three years but –

(a) which shall not be less than one year and a fine of ten thousand rupees in case of default in
payment of the employees contribution which has been deducted by the employer from the
employees wages;

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