Review in any Civil/Revenue Law: in Context of EPF & MP Act-1952
“The worst disease which can be afflict executives in their work is not, as popularly supposed alcoholism, its egotism.”-Robert Frost
This quote seems very relevant when we go through success rate of review applications. We human beings easily cannot admit that we can commit mistake especially when we are performing executive role in adjudication proceeding. In general, provisions related to review incorporated in most of the revenue laws are borrowed from Section 114 and Order 47 of Civil Procedure Code-1908. If we go through the review provisions, then it is clear that these provisions are court specific that means limited to the same court which passed the degree or order. Now we will go through the general terms and conditions need to be fulfilled for review: –
1. The person who is applying for review must be the aggrieved party by the order or decree.
2. In case, appeal provision is provided in the statute then then aggrieved person must not have exercised the right of appeal at the time of filing review application. In case, more than one party is aggrieved by the order and one party has filed the appeal then other party can file review if issue raised in review is not similar to issue raised by other party in appeal. In EPF&MP Act-1952 wording is used “any person” not “employer” that means employer as well as RPFC of the region can file review application. Now question arises why review is not provided once appeal is preferred. Appeal is wider remedy than review which include review also but review is limited remedy just like a pit stop solution.
3. There must be discovery of new and important matter or evidence in favour of aggrieved party with the following restrictions.
(a) Aggrieved party must prove or state that matter was not within his knowledge after exercise of due diligence.
(b) Matter could not be produced by him when order was passed.
(c) Onus lies on the aggrieved person to prove both the allegations stated in point no (a) & (b).
4. Another ground for review is on account of some mistake or error apparent on face of record. In this case not only aggrieved person but the officer who has passed the order can suo-moto review the order when error or mistake came to his knowledge. It is pertinent to highlight that no timeline prescribed for this purpose.
5. In third reason, legislature left the field wide open for the officer passing the order to review the order on account of any other sufficient reason. It must be kept in mind that review does not give power of re-open the case and it cannot be equated with remand back. It is sometime observed that the officer who passed the order start acting like an appellate court while hearing review application. We must keep in mind the review is there to correct mistake in order as a prompt pit stop solution but it doesn’t allow appeal by same court or rehearing the case again.
6. As far as possible review must be done by the same officer who passed the order. I have stated above that review is court specific that means if in any bench, two or more than two courts are there then review must be done by same court which passed the order. In case, court is presided by more than one judge then at least one judge must be there at the time of review out of two who have passed the order. In my opinion, in case officer is not available due to any circumstances or both judges are not there then review can be denied and aggrieved party can seek redress of grievance at the level of appeal as appeal is wider remedy and it include review also. In case, no appeal provision is provided in the statute then route of writ can be taken as last measure.
7. In case, review is granted the opposite party which is affected by the review can file appeal either against the order passed in review or the original order.
8. I have mentioned above that review is just a pit stop solution so no appeal is provided for rejection of review application but aggrieve party can file appeal against the original order so even after filing of review right of appeal of the aggrieved party remains protected so review is a fast and beneficial remedy for the aggrieved party if sufficient grounds are there.
9. It is mandatory to issue notice to other affected parties before adjudication on the review application.
10. Review is not provided for change of opinion. Suppose, Officer while passing the order has taken one approach and assessment order was passed for Rs. 5 Crore. In case, other approach would have taken then assessment amount would have been Rs. 7 Crore on same set of documents and both approaches are permitted in law. In that case, officer cannot take second approach either at the request of parties or suo-moto as the case may be. In that case, only remedy available for the affected parties is to file the appeal.
11. In case, original order was based on a question of law and that question of law overturned or modified by superior court in any other subsequent matter before the superior court then it is not ground to seek review as review is not allowed for change of principle or change of opinion.
12. In case, review is rejected solely on the ground of non-appearance of aggrieved party that it can be restored later on when that party show the sufficient cause which prevented the presence of the party.
Form of Application: – As per paragraph 79A of the EPF Scheme-1952, review application can be filed in Form-9.
Time Limit: – In paragraph 79A wording is that application must be filed within 45 days of making of the order. In case, review application is filed by RPFC of the region on behalf of CBT then it must be filed within 45 days of issue of order as in that case date of issue of order will be date of making of order. In case, review application is filed by the employer then it will be date of receipt of the order as from employer prospective order deemed to be made on the date it was received by employer.
Review in EPFO – Practical Difficulty Created by Circular: – In EPFO Central Provident Fund Commissioner (herein after referred as CPFC has issued a circular no RRC.II/28(31)07/53677 to 53777 dated 17th Oct 2007, where he has imposed two restrictions on the officer conducting the review under section 7B of the Act as under:
1. In respect of review application from the establishment the powers under section 7B to review the orders passed under section 7A will be exercised by an officer only after obtaining the views of the officer next above in hierarchy.
2. If higher authority on scrutiny of the 7A order find grounds for the action under section 7B, he can suo-moto order for review under section 7B.
For the sake of discussion; I will take both the restriction one by one. At first, I will take restriction one.
1. In my opinion this restriction is influenced by Section 144A and Section 274 of Income Tax Act-1961 where in the interest of revenue as well as to protect the interest of assesse Joint Commissioner is given the power of administrative control as well as guidance in the matter of best assessment and penalty respectively but CPFC has failed to understand that these powers in Joint Commissioner is not vested in through circular but by the legislature through the Act itself.
2. CPFC is only an administrative head of the organization and Act has not vested any power in CPFC or any other authority subordinate to him to issue circulars in the matter of assessment specially when he is also one of the authorities designated to carry out assessment functions under section 7A of the Act.
3. Legislature has left limited scope in Section 7B for delegation of power that is limited administrative arrangement that to decide the form, manner and time period for review. That power is delegated to Central Government not to CPFC and that is for limited use through Scheme but not through any circular. It is pertinent to highlight that said delegation of power already exercised by Central Government so it has not left any scope for CPFC.
4. As soon as, cognizance for hearing under section 7A of the Act is taken by the Inquiry Officer then he ceased to officer of the CBT for that purpose. At that case, his role is limited only like an adjudicator or arbitrator only where two parties are contesting before him, one is CBT represented by RPFC of the region and further represented by Enforcement Officer during the hearing and other party is employer. It is necessary in the interest of natural justice that equal or level playing field must be provided to both the parties. In that case, one party cannot impose condition on the Inquiry Officer that you need to take my view before taking up application for review. In case, RPFC of the region has any objection on the review that must be presented through the Enforcement Officer before the Inquiry Officer during the application taken up review but nothing before that otherwise it will seriously violate the right of other party as well as principle of natural justice.
5. It will shake the faith of other party in the fairness & independence of the Inquiry Officer.
6. Inquiry Officer under section 7A of the Act is the judicial authority performing judicial functions and other authorities may be above in hierarchy but they are just administrative authorities for the particular case. Judicial authority is always supreme and any administrative authority cannot dictate the terms to judicial authority until specifically permitted by legislature for some particular objective as provided in the Income Tax Act.
7. Through this circular CPFC has created one appellate authority or superior judicial authority over the 7B authority. That means CPFC gets into the shoes of legislature despite being an administrative authority despite the fact he is only a creature of the Act.
8. Through this circular any authority higher in hierarchy over the 7B authority despite being other party of the case, can exercise the powers of appellate authority and can prevent the other party to exercise her right of statutory right of review provided in the Act.
9. CPFC can take a stand that CBT is the authority to administer the Schemes and he is ex-officio secretary of the CBT so he can exercise the executive powers on behalf of the CBT. It is pertinent to highlight that CBT is given limited power to administration of Schemes and power of delegation is vested in Central Government that need to be exercised through framing of Schemes. CBT has not given any power to issue circular in the Act for assessment purpose. For example, CBDT is given power to issue circular under section 119 of the Income Tax Act in the general matter related to assessment but CBT has not been given any such power. Moreover, CBDT is the department of the Central Government and Central Government has the ownership over the revenue but position of CBT is very week compared to CBDT as CBT is only a trustee.
10. This is nothing but a situation where Superintendent of Police/DGP/State or Prosecution is ordering the judge that you need to take my view before preceding for review of your own judgement which is not sustainable in law as it is strictly against the principle of natural justice as well as principle of separation of powers.
Now, I will come on the second restriction which state as under:
“If higher authority on scrutiny of the 7A order find grounds for the action under section 7B, he can suo-moto order for review under section 7B”
This restriction is influenced by Section 263 of Income Tax Act-1961, where Commissioner is given power to direct the assessing officer to carry out assessment again if it is found that assessing officer has carried out erroneous assessment and it would have adversely affected the interest of revenue due to escapement of income under assessment. CPFC failed to understand that Commissioner in Income Tax Act is vested with the statutory power to monitor the assessment within the given time limit but CPFC has not been given any such power. This restriction is not legally sound for the following reasons:
1. It is fact that higher authority in hierarchy to the 7B authority being administrative authority under CBT is just opposite party before the 7B authority during the review therefore administrative authority need to take same route as employer that means they cannot do it suo-moto. In case, RPFC of the region is of the opinion that order need to be reviewed then he will pass appropriate direction to Enforcement Officer to file review application before 7B authority.
2. It is pertinent to mention here that wording used in Section 7B is not “the employer” but “any person aggrieved by the order” that means legislature has kept the door of review open for both parties i.e. employer as well as RPFC of the region. RPFC of the region may apply for the review through Enforcement Officer if from any source any new or important matter came to his knowledge. In this case, RPFC of the region cannot issue suo-moto order to the 7B Authority but he need to follow the same route as employer is bound to follow.
3. RPFC of the region need to comply all the condition of the paragraph 79A of the EPF Scheme-1952 except that he can apply review only within 45 days of the issue of the order but employer can apply within 45 days of receipt of the copy of the order.
Practical Difficulty: – I have encountered with practical problem in one case where I had passed order under section 7A of the Act and party has applied for review under section 7B of the Act. Application for review was filed well within the time and put up before me by the Section Supervisor after carrying out due scrutiny. He put up file along with this circular and keeping in mind the bureaucratic discipline, I have put the application in file before the authority higher in hierarchy for his views as well as approval with clear noting that case is well within time and fit for consideration under section 7B of the Act. To my utter surprise, he rejected the application and wrote the adverse noting in the file. This created catch 22 situation for me as in case I am rejecting the application solely on the ground that my authority higher in hierarchy has rejected or recorded the adverse view then I am not exercising the judicial powers vested in me as well as I am snatching the statutory right of the employer. In case, I am still proceeding with review then it will make me liable for administrative action as well as vigilance action. In case, I am taking the application and later on rejecting it any other reason without disclosing correct reason then I am not performing duty properly and doing justice with my job. There was another risk that in case employer came to know that true reason behind the rejection through RTI or any other mode then he will implead me and my higher authority as party in the case at higher judicial forum. This will not only make us liable for appropriate judicial action but this can affect the interest of department if any adverse order passed by superior judicial authority. At this stage, I have taken a practical approach and personally visited the chamber of higher authority. I have told him all above mentioned reasons and he agreed to change his view on the condition that I have to put up file again. I have put up file again with some addition reasons and he has given permission for review. With this practical example, we can understand that how interest of employer and his statutory right of review, fairness & independence of 7B authority as well as principle of natural justice compromised in review proceeding by this circular. This circular need immediate reconsideration in the interest of justice. Last but not least, provision of review omitted in Social Security Code-2020.