Kamal Mookerjee & Co. (Shipping) Pvt. Ltd v. Commissioner Of Income Tax Cal-Iii Commissionerate Kolkata

ORDER IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE OD – 1 & 2 ITA/72/2012 KAMAL MOOKERJEE & CO. (SHIPPING) PVT. LTD.VERSUS COMMISSIONER OF INCOME TAX CAL-III COMMISSIONERATE KOLKATA WITH ITA/73/2012 KAMAL MOOKERJEE & CO. (SHIPPING) PVT. LTD.VERSUS COMMISSIONER OF INCOME TAX CAL-III COMMISSIONERATE KOLKATA BEFORE : THE HON’BLE JUSTICE SURYA PRAKASH KESARWANIAND THE HON’BLE JUSTICE RAJARSHI BHARADWAJDate : 3[rd] April 2024. Appearance: Dr. Samir Chakraborty, Senior AdvocateMr. Abhijit Biswas, AdvocateMr. Bhaskar Sengupta, Advocate… for the appellant.Mr. Soumen Bhattacharjee, AdvocateMr. Ankan Das, AdvocateMs. Doyel Dey, Advocate… for the respondent. 1.Heard Dr. Samir Chakraborty, learned senior advocate assisted by SriAbhijit Biswas and Sri Bhaskar Sengupta, learned counsel for theappellant assessee and Sri Soumen Bhattacharjee, learned juniorstanding counsel for the respondent department.Abhijit Biswas and Sri Bhaskar Sengupta, learned counsel for theappellant assessee and Sri Soumen Bhattacharjee, learned juniorstanding counsel for the respondent department. 2.This appeal was admitted by order dated 10[th] January 2012, on thefollowing substantial questions of law:-following substantial questions of law:- i)Whether in the facts and circumstances of the case the Tribunalwas right in holding that in respect of payments made to CalcuttaDock Labour Board by the appellant in terms of provisions ofclauses 41(5) and 56(1) of the Dock Workers (Regulation ofEmployment) Scheme, 1970, framed under the Dock Workers(Regulation of Employment) Act, 1948, the provisions of Section194C of the Income Tax Act, 1961 are attracted?was right in holding that in respect of payments made to CalcuttaDock Labour Board by the appellant in terms of provisions ofclauses 41(5) and 56(1) of the Dock Workers (Regulation ofEmployment) Scheme, 1970, framed under the Dock Workers(Regulation of Employment) Act, 1948, the provisions of Section194C of the Income Tax Act, 1961 are attracted? ii)Whether in the facts and circumstances of the instant case theTribunal was right in holding that the relief granted to the appellantby the Commissioner of Income Tax (Appeals) was devoid of legallysustainable merits?Tribunal was right in holding that the relief granted to the appellantby the Commissioner of Income Tax (Appeals) was devoid of legallysustainable merits? Facts 3.Briefly stated, facts of the present case are that the appellant assessee isa registered employer under the Dock Workers (Regulation ofEmployment) Act, 1948 (hereinafter referred to as ‘the Act 1948’) readwith the provisions of the Calcutta Dock Workers (Regulation ofEmployment) Scheme, 1970 (hereinafter referred to as ‘the RegulationScheme 1970’). The appellant is engaged in the business of stevedoringand container freight services. In order to regulate the employment ofdock workers as well as the dock workers registered employer, thea registered employer under the Dock Workers (Regulation ofEmployment) Act, 1948 (hereinafter referred to as ‘the Act 1948’) readwith the provisions of the Calcutta Dock Workers (Regulation ofEmployment) Scheme, 1970 (hereinafter referred to as ‘the RegulationScheme 1970’). The appellant is engaged in the business of stevedoringand container freight services. In order to regulate the employment ofdock workers as well as the dock workers registered employer, the aforesaid Act 1948 and the Regulation Scheme 1970 have been enacted.During the assessment years in question i.e. assessment year 2005-07and assessment year 2007-08, the appellant herein deposited a sum ofRs.2,22,58,795/- and Rs.1,56,31,495/- respectively with the CalcuttaDock Labour Board (hereinafter referred to as ‘the Board’) in discharge ofits obligations under the Act 1948 and the Regulation Scheme 1970 forthe purposes of disbursement of wages of its employees through theBoard. aforesaid Act 1948 and the Regulation Scheme 1970 have been enacted.During the assessment years in question i.e. assessment year 2005-07and assessment year 2007-08, the appellant herein deposited a sum ofRs.2,22,58,795/- and Rs.1,56,31,495/- respectively with the CalcuttaDock Labour Board (hereinafter referred to as ‘the Board’) in discharge ofits obligations under the Act 1948 and the Regulation Scheme 1970 forthe purposes of disbursement of wages of its employees through theBoard. 4.By assessment order dated 04.08.2008 under Section 143(3) of theIncome Tax Act, 1961 (hereinafter referred to as ‘the Act 1961) for theassessment year 2006-07 and by assessment order dated 21.12.2009under Section 143(3) of the Act 1961 for the assessment year 2007-08,the assessing officer held that the main function of the Board is toprovide labour to the stevedore i.e. the appellant herein and, thus, whilemaking payment to the Board, the appellant assessee was bound todeduct tax at source under Section 194C of the Act 1961 but it failed todo so, therefore, Section 40(a)(ia) of the Act 1961 will be applicable.Consequently, he disallowed the aforesaid a sum of Rs.2,22,58,795/- forthe assessment year 2006-07 and Rs.1,56,31,495/- for the assessmentyear 2007-08 representing the deposits made by the appellant assesseeto the Board without deduction of tax at source under Section 194C.Thus, the amounts so disallowed became part of the total income of theappellant assessee and accordingly it was subjected to tax. 5.Aggrieved with the aforesaid assessment orders, the appellant assesseefiled separate appeals against the assessment orders for the above-notedassessment years before the Commissioner of Income Tax (Appeals)which both were allowed. Aggrieved with the orders of the CIT(A), therevenue filed ITA No.199/Kol/2010 [assessment year 2006-07] and ITANo.1545/Kol/2010 [assessment year 2007-08] which both were allowedand the orders of the CIT(A) were set aside by the Tribunal returning aspecific finding that the payments made by the appellant assessee to theBoard were for supply of labour and thus Section 194C of the Act 1961 isclearly attracted. However, However, by the aforesaid two orders bothdated 17[th] February, 2012, the ITAT has remanded back to the CIT(A) forstatistical purposes.filed separate appeals against the assessment orders for the above-notedassessment years before the Commissioner of Income Tax (Appeals)which both were allowed. Aggrieved with the orders of the CIT(A), therevenue filed ITA No.199/Kol/2010 [assessment year 2006-07] and ITANo.1545/Kol/2010 [assessment year 2007-08] which both were allowedand the orders of the CIT(A) were set aside by the Tribunal returning aspecific finding that the payments made by the appellant assessee to theBoard were for supply of labour and thus Section 194C of the Act 1961 isclearly attracted. However, However, by the aforesaid two orders bothdated 17[th] February, 2012, the ITAT has remanded back to the CIT(A) forstatistical purposes. 6.Aggrieved with the aforesaid two orders of the ITAT both dated 17[th]February, 2012, the appellant/assessee has filed the present two appealswhich both were admitted on the afore-noted substantial question of law.February, 2012, the appellant/assessee has filed the present two appealswhich both were admitted on the afore-noted substantial question of law. Submission 6.Aggrieved with the aforesaid two orders of the ITAT both dated 17[th]February, 2012, the appellant/assessee has filed the present two appealswhich both were admitted on the afore-noted substantial question of law.February, 2012, the appellant/assessee has filed the present two appealswhich both were admitted on the afore-noted substantial question of law. Submission 7.Learned Counsel for the appellant/assessee has referred to and carriedus to various provisions of the Act 1948 and the Regulation Scheme1970 and the provisions of Section 194C of the Act 1961. He alsoreferred to the law laid down by Hon’ble Supreme Court in VizagapatnamDock Labour Board Vs. Stevadores Association reported at (1969) 2 SCC801 (paras 19 to 24), a judgment of this Court in Calcutta Dock LabourBoard Vs. Payment of Wages Authority, reported at 1981-82 (86) CWNus to various provisions of the Act 1948 and the Regulation Scheme1970 and the provisions of Section 194C of the Act 1961. He alsoreferred to the law laid down by Hon’ble Supreme Court in VizagapatnamDock Labour Board Vs. Stevadores Association reported at (1969) 2 SCC801 (paras 19 to 24), a judgment of this Court in Calcutta Dock LabourBoard Vs. Payment of Wages Authority, reported at 1981-82 (86) CWN 113 and a judgment of the Hon’ble Supeme Court in Tarseem Singh Vs.Sukhminder Singh JT, reported at (1998) 3 SCC 471 (para 12). He alsoplaced before us a judgment of Hon’ble Supreme Court in the case ofAssociated Cement Company Ltd. Vs. Commissioner of Income Tax &Anr. 1993 (201) ITR 435 (SC) and contended that this judgment has noapplication to the facts of the present case. He also carried us to theorder passed by the CIT(A) and reiterated the findings recorded by theCIT(A) as a part of his submission. He concluded his argument bysubmitting that there is a contract between the appellant/assessee andthe dock workers to whom the appellant employed and the role of theBoard is to regulate the dock workers employment as per the statutorymandate contained in the Act 1948 and the Regulation Scheme 1970. Hefurther submits that the Board merely allocates dock workers as a partof its statutory obligation under the Act 1948 read with the RegulationScheme 1970. The deposits towards wages of the dock workers made bythe appellant/assessee are on account of statutory mandate under theAct 1948 read with the Regulation Scheme 1970 for disbursement ofwages of the dock workers. There is no element of either supply of labourby the Board to the appellant or any contract between the Board and theappellant for supply of labour/dock workers. He submits that in theabsence of any contract for supply of labour and the dock workers beingthe employee of the appellant/assessee, Section 194C of the Act, 1961 isnot attracted merely because the payments to the dock workers towards wages have been made by the appellant through the Board because ofstatutory requirement. He submits that the orders passed by the ITATwhich are impugned in both the above-noted appeals deserve to be setaside and both the present appeals deserve to be allowed. 8.Learned Counsel for the respondent has supported the impugned ordersof the ITAT.of the ITAT. Discussion and findings 9.We have heard and carefully considered the submissions of learnedcounsels for the parties, perused the paper book and the provisions ofthe Act 1948, Regulation Scheme 1970, Section 194C of the Act 1961and the judgments relied upon by the learned Counsel for theappellant/assessee.counsels for the parties, perused the paper book and the provisions ofthe Act 1948, Regulation Scheme 1970, Section 194C of the Act 1961and the judgments relied upon by the learned Counsel for theappellant/assessee. 8.Learned Counsel for the respondent has supported the impugned ordersof the ITAT.of the ITAT. Discussion and findings 9.We have heard and carefully considered the submissions of learnedcounsels for the parties, perused the paper book and the provisions ofthe Act 1948, Regulation Scheme 1970, Section 194C of the Act 1961and the judgments relied upon by the learned Counsel for theappellant/assessee.counsels for the parties, perused the paper book and the provisions ofthe Act 1948, Regulation Scheme 1970, Section 194C of the Act 1961and the judgments relied upon by the learned Counsel for theappellant/assessee. 10.It is undisputed that the appellant/assessee is a registered employerunder the Act 1948 read with the Regulation Scheme 1970. It is alsoundisputed that the allocation of dock workers to the appellant/assesseeis made by the Board in terms of the provisions of the Act 1948 read withRegulation Scheme 1970. The main point of controversy involved inthe present two appeals is as to whether the Board is a supplier ofdock workers to the appellant/assessee and consequently, thepayments made by the appellant/assessee to the dock workersthrough the Board shall attract the provisions of Section 194C ofthe Act 1961?under the Act 1948 read with the Regulation Scheme 1970. It is alsoundisputed that the allocation of dock workers to the appellant/assesseeis made by the Board in terms of the provisions of the Act 1948 read withRegulation Scheme 1970. The main point of controversy involved inthe present two appeals is as to whether the Board is a supplier ofdock workers to the appellant/assessee and consequently, thepayments made by the appellant/assessee to the dock workersthrough the Board shall attract the provisions of Section 194C ofthe Act 1961? 11.The Dock Workers (Regulation of Employment) Act, 1948 (9 of 1948) wasenacted by Parliament for regulating the employment of the dock workersby the Board. Section 2(b)/(c)/(d)/(e) and Section 3 of the Act 1948provides as under :enacted by Parliament for regulating the employment of the dock workersby the Board. Section 2(b)/(c)/(d)/(e) and Section 3 of the Act 1948provides as under : 2.(b) “Dock worker” means a person employed or to be employed in,or in the vicinity of, any port on work in connection with the loading,unloading, movement or storage of cargoes, or work in connectionwith the preparation of ships or other vessels for the receipt ordischarge of cargoes or leaving port: (c)"employer", in relation to a dock workers, means the person by whom he is employed or to be employed as aforesaid: (d) Government" means. in relation to any major port, the CentralGovernment and, in relation to any other port, the State Government; (e)"scheme" means a scheme made under this Act. 3.Scheme for ensuring regular employment of workers-(1) provision may be made by a scheme lor the registration of dockworkers and employers with a view to ensuring greater regularity ofemployment and for regulating the employment of dock workers,whether registered or not, in a port. (2) In particular, a scheme may provide (a) for the application of the scheme to such classes of dock workersand employers as may be specified therein: (b) for defining the obligations of dock workers and employerssubject to the fulfillment of which the scheme may apply tothem and thecircumstances in which the scheme shall ceaseto apply to any dock workers or employers; (c) for regulating the recruitment and entry into the scheme ofdock workers, and the registration of dock workers and employers, including the maintenance of registers, the removal ether temporarilyor permanently, of names from the registers and the imposition of feesfor registration: (d)for regulation the employment of dock workers whetherregistered or not, and the terms and conditions of such employment,including rates of remuneration, hours of work and conditions as toholidays and pay in respect thereof: (b) for defining the obligations of dock workers and employerssubject to the fulfillment of which the scheme may apply tothem and thecircumstances in which the scheme shall ceaseto apply to any dock workers or employers; (c) for regulating the recruitment and entry into the scheme ofdock workers, and the registration of dock workers and employers, including the maintenance of registers, the removal ether temporarilyor permanently, of names from the registers and the imposition of feesfor registration: (d)for regulation the employment of dock workers whetherregistered or not, and the terms and conditions of such employment,including rates of remuneration, hours of work and conditions as toholidays and pay in respect thereof: (e) for securing that. In respect of periods during which employment,or full employment, is not available for work, such workers will,subject to the conditions of the scheme, receive a minimum pay: (f) for prohibiting restricting or otherwise controlling theemployment/of dock workers to whom the scheme does not applyand the employment of dock workers by employers to whom thescheme does not apply: (ii) for creating such fund or funds as maybe necessary or expedientfor the purposes of the scheme and for the administration of suchfund or funds: Note: Every fund created or purporting to have been created andevery provisions with respect thereto made or purporting to have beenmade under the principal Act before the commencement of this Actshall, for all purposes, be deemed to be, and to have always been, asvalidity and effectively created or made as if the provisions of section3 of the principal Act, as amended by this Act, had been in force at allmaterial times and accordingly, notwithstanding any Judgment,decree or order of any court. - (a) all contributions to any such fund received or collected before thecommencement of this Act shall be deemed to be and shall be deemedalways to have been as validly received or collected as if theprovisions of section 3 of the principal Act, as amended by this Actwere in force at all material times; (c) recoveries shall be made of all contributions to any such fundswhich have not been received or collected but which would have beenreceived or collected if the provisions of section 3 of the principal Act.as amended by this Act, had been in force at all material times. Explanation:- For the removal of doubts it is hereby declared that noact or omission on the part of any person, before the commencementof this Act shall be punishable as an offence which would not havebeen so punishable, If this Act had not come into force. (g) for the training and welfare of dock workers. In so far assatisfactory provision therefore does not exist apart from the scheme: (gg) for welfare of the officers and other staff of the board; (h) for health and safety measures in places where dock worker areemployed. In so far as satisfactory provision therefore does not existapart from the scheme: (i) for the manner in which, and the persons by whom, the cost ofoperating the scheme is to be defrayed: (j)for constituting 14 the authority to be responsible for theadministration of the scheme: (k) for such incidental and supplementary matters as may benecessary or expedient for the purposes of the scheme. (3) A scheme may further provide that a contravention of anyprovision thereof shall be punishable with Imprisonment for such termas may be specified but in no case exceeding three months in respectof a first contravention or six months in respect of any subsequentcontravention, or with fine which may extend to such amount as maybe specified but in no case exceeding five hundred rupees in respectof a first contravention or one thousand rupees in respect of any subsequent contravention, or with both Imprisonment and fine asaforesaid.” (j)for constituting 14 the authority to be responsible for theadministration of the scheme: (k) for such incidental and supplementary matters as may benecessary or expedient for the purposes of the scheme. (3) A scheme may further provide that a contravention of anyprovision thereof shall be punishable with Imprisonment for such termas may be specified but in no case exceeding three months in respectof a first contravention or six months in respect of any subsequentcontravention, or with fine which may extend to such amount as maybe specified but in no case exceeding five hundred rupees in respectof a first contravention or one thousand rupees in respect of any subsequent contravention, or with both Imprisonment and fine asaforesaid.” 12.Section 4 of the Act 1948 provides for making variation and revocation ofScheme. Section 5 provides for constitution of Advisory Committee.Section 5B provides that the Board shall be responsible for administeringthe scheme for the port or group for which it has been established andshall exercise such powers and perform such functions as may beconferred on it by the scheme. In exercise of its powers and the dischargeof its functions, the Board shall be bound by such directions as theGovernment may, for reasons to be stated in writing, give to it from timeto time. Section 5C provides for accounts and audit. Section 5E providesfor submission of annual report and audited accounts of the Boardtogether with auditor’s report within time bound period and to lay itbefore each House of Parliament. Section 6 provides for appointment ofinspectors for the purposes of the Act. Section 6A provides for power toorder inquiry to investigate or enquire into working of a Board. Section6B provides for power to supersede a Board. Section 6C provides forcircumstances in which acts or processing of the Board and AdvisoryCommittee shall not be invalidated. Section 8 provides for power to makerules. Section 9 is the saving clause. The Regulation Scheme 1970 hasbeen framed by the Government of India in exercise of powers conferredunder the Act 1948 and more particularly Section 3 thereof which hasbeen reproduced above. 13.The object of the Act as well as the provisions of the Act and moreparticularly those afore-noted leaves no manner of doubt that the Act1948 provides for regulation of employment of dock workers.particularly those afore-noted leaves no manner of doubt that the Act1948 provides for regulation of employment of dock workers. 14.The Regulation Scheme 1970 has been enacted with the object of greaterregularity of employment of dock workers by maintaining adequatenumber of dock workers and achievement of efficiency of performance indock work and attainment of satisfactory levels of productivity by thedock workers. The aforesaid scheme relates to Port of Kolkata andapplies to registered dock workers and their registered employers.regularity of employment of dock workers by maintaining adequatenumber of dock workers and achievement of efficiency of performance indock work and attainment of satisfactory levels of productivity by thedock workers. The aforesaid scheme relates to Port of Kolkata andapplies to registered dock workers and their registered employers. 15.The words ‘dock employer’ and ‘registered employer’ both have beendefined under clause 3(g) and (q) of the Regulation Scheme 1970 asunder :defined under clause 3(g) and (q) of the Regulation Scheme 1970 asunder : (g) “dock employer” means the person by whom a dock worker isemployed or is to be employed.…employed or is to be employed.… (q) “registered employer" means an employer whose name is, for thetime being entered in the employers' register” 15.The words ‘dock employer’ and ‘registered employer’ both have beendefined under clause 3(g) and (q) of the Regulation Scheme 1970 asunder :defined under clause 3(g) and (q) of the Regulation Scheme 1970 asunder : (g) “dock employer” means the person by whom a dock worker isemployed or is to be employed.…employed or is to be employed.… (q) “registered employer" means an employer whose name is, for thetime being entered in the employers' register” 16.Clause 17 of the Regulation Scheme 1970 provides for maintenance ofemployers register and workers register. It is specifically provides thatpersons who have been licensed to function as stevedores by thecompetent authority of Calcutta Port Trust shall be deemed to have beenregistered under the scheme during the currency of the license. Clause18 provides for classification of workers in registers. Clause 19 providesemployers register and workers register. It is specifically provides thatpersons who have been licensed to function as stevedores by thecompetent authority of Calcutta Port Trust shall be deemed to have beenregistered under the scheme during the currency of the license. Clause18 provides for classification of workers in registers. Clause 19 provides for fixation of number of workers on the register. Clause 20 provides forregistration of the existing and new workers on payment of fees andsubject to certain conditions. Clause 21 provides for age of retirement of58 years of any worker. Clause 23 provides for medical examination ofworkers. Clause 25 provides that registration fee of Rs.2 shall be payableto the Board for by each worker at the time of registration under theScheme provided that those workers who had already been registeredunder the Calcutta Dock Workers (Regulation of Employment) Scheme,1958, shall be exempted from payment of such fee. Clause 27 providesfor service record for registered workers to be maintained by theadministrative body in a form to be prescribed by the Board. Clause 28provides for “records sheet” for registered employers to be maintained bythe personnel officer in respect of each registered employer in a formprescribed by the Board. Clause 32 provides for employment in shifts.Clause 34 provides for guaranteed minimum wages in a month to anyreserve pool workers as may be fixed by the Board for each year. Clause40 provides for obligation of registered dock workers. Clauses 41, 42, 45and 56 have direct bearing on the controversy involved in thepresent two appeals, which are reproduced below : “41. Obligations of Registered Employers (1)Every registered employer shall accept the obligations ofthe Scheme. (2)Subject to the provisions of Clause 31 and the relaxation given inSub-Clause (2) of Clause 20, a registered employer shall notemploy a worker other than a dock worker who has beenallocated to him by the Administrative Body in accordancewith the provisions of item (g) of Clause 12.Sub-Clause (2) of Clause 20, a registered employer shall notemploy a worker other than a dock worker who has beenallocated to him by the Administrative Body in accordancewith the provisions of item (g) of Clause 12. (3)A registered employer shallin accordance with thearrangement made by the Administrative Body submit allavailable information of his current and future labourrequirements.arrangement made by the Administrative Body submit allavailable information of his current and future labourrequirements.(4)A registered employer shall lodge with the Administrative Bodyunless otherwise directed, particular of the tonnage handled byworker on piece-rate and such other statistical data as may berequired in respect of the registered dock workers engaged byhim.unless otherwise directed, particular of the tonnage handled byworker on piece-rate and such other statistical data as may berequired in respect of the registered dock workers engaged byhim. (3)A registered employer shallin accordance with thearrangement made by the Administrative Body submit allavailable information of his current and future labourrequirements.arrangement made by the Administrative Body submit allavailable information of his current and future labourrequirements.(4)A registered employer shall lodge with the Administrative Bodyunless otherwise directed, particular of the tonnage handled byworker on piece-rate and such other statistical data as may berequired in respect of the registered dock workers engaged byhim.unless otherwise directed, particular of the tonnage handled byworker on piece-rate and such other statistical data as may berequired in respect of the registered dock workers engaged byhim. (5)(i) A registered employer shall pay to the AdministrativeBody in such manner and at such times as the Board may directthe levy payable under Sub-Clause (1) of Clause 56 and thegross wages due to pool workers;Body in such manner and at such times as the Board may directthe levy payable under Sub-Clause (1) of Clause 56 and thegross wages due to pool workers; (ii)A registered employershall make payments ascontributions to the Dock Workers Welfare Fund underClause 59;contributions to the Dock Workers Welfare Fund underClause 59; (iii)A registered employer shall pay to the Board themonthly Provident Fund subscriptions recovered formthe wages of the workers and the contribution by theregistered employers thereon, repayment of ProvidentFund loan and interest on Provident Fund loan within 15days from the date of each recovery.monthly Provident Fund subscriptions recovered formthe wages of the workers and the contribution by theregistered employers thereon, repayment of ProvidentFund loan and interest on Provident Fund loan within 15days from the date of each recovery. (6)A registered employer shall keep such records as the Board mayrequire, and shall produce to the Board or to such persons as maybe designated by the Board upon reasonable notice all suchrecords and any other documents of any kind relating toregistered dock workers and to the work upon which they havebeen employed and furnish such information relating thereto asmay be set out in any notice or directions issued by or on behalf ofthe Board.require, and shall produce to the Board or to such persons as maybe designated by the Board upon reasonable notice all suchrecords and any other documents of any kind relating toregistered dock workers and to the work upon which they havebeen employed and furnish such information relating thereto asmay be set out in any notice or directions issued by or on behalf ofthe Board. (7)Every registered employer shall maintain such gears, supervisorystaff and other personnel and carry out such gears, supervisorystaff and other personnel and carry out such minimum businessper annum as may be specified in the licence for stevedoring to beissued by the Port authorities.staff and other personnel and carry out such gears, supervisorystaff and other personnel and carry out such minimum businessper annum as may be specified in the licence for stevedoring to beissued by the Port authorities. (8)A registered employer is permitted to use registered workers forthe descriptions of stevedoring work specified in the Scheme onlyunder a direct stevedoring appointment with the Shipowners,Shipping Companies, Steamer Agents, Charters of vessels,Shippers, Consignees or Masters of ships. The Board may at anytime demand production of such appointment documentspertaining to work on any ship from any registered employer forthe purpose of verification.the descriptions of stevedoring work specified in the Scheme onlyunder a direct stevedoring appointment with the Shipowners,Shipping Companies, Steamer Agents, Charters of vessels,Shippers, Consignees or Masters of ships. The Board may at anytime demand production of such appointment documentspertaining to work on any ship from any registered employer forthe purpose of verification. (9)Omitted. (9)Omitted. (10)A registered employer shall not pay a registered dockworker anything in cash or otherwise in excess of the wagesnormally and actually due to the worker.worker anything in cash or otherwise in excess of the wagesnormally and actually due to the worker. 42.Restriction on Employment (1)No person other than a registered employer shall employ any worker on dock work nor shall a registered employerengage, subject to the relaxation given in sub clause (4) (e) ofClause 20, for employment or employ a worker on dock workunless that worker is a registered dock worker. (2)Notwithstanding the foregoing provisions of this clause – (a) where the Administrative Body is satisfied that – (i) dock work is emergently required to be done ; and (ii)It is not reasonably practicable to obtain a registered dockworker for that work: title Administrative Body may, subject to anylimitations Imposed by the Board, allocate to a registered employer aperson who is not a registered dock worker. In selecting such workersthe local Employment Exchange Organization shall, as far aspossible, be consulted; Provided that, whenever unregistered workers have to be employed,the Administrative Body shall obtain, if possible, the prior approval ofthe Chairman to the employment of such workers and where this isnot possible, shall report to the Chairman within 24 hours the fullcircumstances under which such workers were employed and theChairman shall duly inform the Board of such employment at its nextmeeting : (b) In the case referred to in Item (a), the person so employed asaforesaid by a registered employer shall, for the purposes of Sub-clauses (4), (5) and (6) or Clause 41 and Clauses 44 and 45 betreated In respect of that dock worker as if he was a dally worker. (3)A registered worker in the reserve pool may provided he fulfilsfully his obligations under Clause 40, take up occasional employmentunder employers other than those registered under the Scheme onthose days on which he is not allocated for work by theAdministrative Body. 45.Wages, Allowance and other conditions of Service ofWorkers in categories in Schedule-I (1) Unless otherwise specifically provided for in the Scheme, it shallbe an implied condition of the contract between a registereddock worker in the categories in Schedule-I and a registeredemployer that the rates of wages, allowances and overtime, hours ofwork, rest intervals, holidays and pay in respect thereof and otherconditions of service shall be such as may be prescribed by theBoard for each category of workers subject to the provisions of Sub-Clauses (2) to (6). (2) The Board shall accept and implement the provisions in ScheduleVI or any other Scheme that may hereafter be framed and approvedby the Central Government. (3) With regard to future Scheme, the Board shall appoint a Committeeconsisting of representatives of registered employers, ShippingCompanies, workers and the Port authority and a nominee of theCentral Government to determine the norms for output in respect ofcargoes of different kinds, and/or Lines and/ or Zones. If theCommittee is not able to prescribe agreed norms within a period oftwo months of having been asked to do so, the Chairman of the Boardmay determine such norms and submit them to the CentralGovernment for approval. These norms shall be adopted as standard output required of workers. The same procedure shall be followed ifand when a revision of the norms considered necessary by the Board.(4) The Board shall by regulations relate the wages earned to theactual output of workers as specified in Schedule VI. The regulationsfor any future Scheme shall be submitted to the Central Governmentfor approval before implementation(5) Omitted. (6)The fixation of wage periods, time for payment of wages anddeductions from wages shall be In accordance with the provisions ofthe Payment of Wages Act, 1936 (4 of 1936). output required of workers. The same procedure shall be followed ifand when a revision of the norms considered necessary by the Board.(4) The Board shall by regulations relate the wages earned to theactual output of workers as specified in Schedule VI. The regulationsfor any future Scheme shall be submitted to the Central Governmentfor approval before implementation(5) Omitted. (6)The fixation of wage periods, time for payment of wages anddeductions from wages shall be In accordance with the provisions ofthe Payment of Wages Act, 1936 (4 of 1936). (7)The provisions contained in Sub-clause 3, the CentralNotwithstanding Government may, If it so decides, set up such bodyas it may deem n t for reviewing the Scheme for any part thereof. Thedecision of the Central Government on the recommendations of thesaid body shall be final and binding. 56.Cost of Operating the Scheme (1) The cost of operating the Scheme shall be defrayed bypayments made to the Board by registered employers or theirauthorised agents as approved by the Board. Every registeredemployer shall pay to the Board such amount by the way oflevy in respect of reserve pool workers together with and atthe same time as or earlier than the payment of gross wagesdue from him under item (1) of Sub-Clause (5) of Clause 41, asthe Board may, from time to time, prescribe by a written notice toregistered employers and the amount payable by way of such levyshall not be less than such amount as the Board may fix at theminimum payable by every registered employer. Provided that, where wages are payable to workers at an interval ofless than a month, the Board may at its discretion allow the amounts, other than gross wages, payable under this sub-clause to be paidmonthly by such time as the Board may prescribe in this behalf. (2) In determining what payments are to be made by registeredemployers under Sub-clause (1), the Board may fix different rates oflevy for different categories of work or workers, provided that the levyshall be so fixed that the same rate of levy will apply to all dockemployers who are in the like circumstances. (3) The Board shall not sanction any levy exceeding hundred per centof the estimated total wage bill calculated on the basis of the dallytime rate wage and allowances without the prior approval of theCentral Government. (4) A registered employer shall on-demand make a payment to theBoard by way of deposit, or provide such other security for the duepayment of the amount referred to in sub-clause (1), as the Boardmay consider necessary. (5) The Administrative Body shall furnish, from time to time, to theBoard such statistics and other information as may reasonably berequired in connection with the operation and financing of theScheme. (6) If a registered employer fails to make the payment due from himunder sub- clause (1) or under item (iii) of sub-clause (5) of Clause 41or any other amount due and payable to the Board in any othercapacity or account within the time prescribed by the AdministrativeBody, the Admn. Body shall serve a notice on the employer to theeffect that unless he pays his dues within three days from the date ofreceipt of the notice, the supply of registered dock workers to him shall be suspended. On the expiry of the notice period, theAdministrative Body shall suspend the supply of registered dockworkers to a defaulting employer and charge Interest on the amountsdue at such rate and from such date as ite Board may decide until hepays his dues. If the employer falls to pay his dues within 45 days ofthe date of issue of the notice, his name shall be liable o be removedfrom the employers' register without prejudice to other rights of theBoard for the recovery of the defaulted amount from such employer.” shall be suspended. On the expiry of the notice period, theAdministrative Body shall suspend the supply of registered dockworkers to a defaulting employer and charge Interest on the amountsdue at such rate and from such date as ite Board may decide until hepays his dues. If the employer falls to pay his dues within 45 days ofthe date of issue of the notice, his name shall be liable o be removedfrom the employers' register without prejudice to other rights of theBoard for the recovery of the defaulted amount from such employer.” 17.A conjoint reading of various provisions of the Act 1948 and theRegulation Scheme, 1970 and more particularly clauses 41, 42 and 45thereof leads to an irresistible conclusion that under the Act and theRegulation Scheme 1970, the registered employer is bound to accept theobligation of the Scheme, he shall not employ any worker other thandock workers which has been allocated to him by the administrativebody. Clause 42 completely prohibits employment of any worker ondock other than the registered employer. Thus, the registered employercan only employ dock workers and the conditions of service includingpayment of their wages have been regulated by various provisions of theAct 1948 and the Regulation Scheme, 1970. Clause 45 of the RegulationScheme 1970, as afore-quoted, clearly stipulates a contract ofemployment between registered employer and dock workers. Rates ofwages, allowances and overtime, hours of work, rest intervals, holidaysand pay in respect thereof and other conditions of service as have beenprescribed by the Board for each category of workers subject to the provisions of sub-clauses (2) to (6). Thus, clause 45 leaves no manner ofdoubt that the contract of employment of dock workers is between aregistered employer and the registered dock workers. It is statutoryobligation incorporated under the contract that the registered employerhas to pay wages etc. to the dock workers by remitting the amount to theadministrative body for disbursement of his (employer’s) own dockworkers/employees. Thus, neither the Board nor its administrativecommittee supplies any dock workers to the registered employer but it isas per the Act and the Regulation so as to protect the interest of the dockworkers and employer that the registered employer furnishes hisrequirement and the administrative committee allocates from amongstregistered dock workers to a particular registered employer and theybecome employee on such terms and conditions as have been stipulatedin the Regulation Scheme, 1970. Therefore, the findings recorded by theITAT in paragraphs 8, 9 and 10 of the impugned order, is patentlyincorrect, perverse and contrary to the provisions of the Act, 1948 andthe Regulation Scheme 1970. Consequently, the finding deserves to beset aside. 18.The dock works employed by the appellant/assessee are his employeesas per scheme of the Act and Regulation Scheme 1970 and it is merelyallocation of workers which have been made by the administrativecommittee of the Board as a part of their statutory obligation under theas per scheme of the Act and Regulation Scheme 1970 and it is merelyallocation of workers which have been made by the administrativecommittee of the Board as a part of their statutory obligation under the Act, 1948 and the Regulation Scheme, 1970. The provision of section194C of the Act 1948 is not attracted at all. 18.The dock works employed by the appellant/assessee are his employeesas per scheme of the Act and Regulation Scheme 1970 and it is merelyallocation of workers which have been made by the administrativecommittee of the Board as a part of their statutory obligation under theas per scheme of the Act and Regulation Scheme 1970 and it is merelyallocation of workers which have been made by the administrativecommittee of the Board as a part of their statutory obligation under the Act, 1948 and the Regulation Scheme, 1970. The provision of section194C of the Act 1948 is not attracted at all. 19.In the case of Vizagapatnam Dock Labour Board (supra) (para 19 to 24)the Hon’ble Supreme Court considered similar regulation scheme framedunder the Act, 1948 and held that the Board is a statutory body chargedwith the duty of administering scheme, the object of which is to ensuregrater regularity of employment for dock workers and to ensure that anadequate number of dock workers are available for the efficientperformance of dock work. The Board is an autonomous body, competentto determine and prescribe the wages, allowances and other conditionsof service of the dock workers. The purport of the Scheme is that theentire body of workers should be under the control and supervision ofthe Board. The registered employers are allocated workers by theAdministrative Committee. The workmen who were allotted to theregistered employers are to do the work under the control andsupervision of the registered employers and to act under their directions.The registered employers desposit the wages due to the workers to theadministrative body which in turn, as an agent of the registeredemployers, disburses the wages to the concerned workmen. Theregulation scheme clearly shows that the registered employer to whomthe labour force is allotted by the Board is the employer whose work ofloading or unloading of ships is done by the dock workers allotted. 20.In Tarseem Singh Vs. Sukhminder Singh JT, reported at (1998) 3 SCC471 (para 12) Hon’ble Supreme Court referred to the provisions of theIndia Indian Contract Act explained as under :471 (para 12) Hon’ble Supreme Court referred to the provisions of theIndia Indian Contract Act explained as under : 12. "Contract" is a bilateral transaction between two or more than twoparties. Every contract has to pass through several stages beginningwith the stage of negotiation during which the parties discuss andnegotiate proposals and counter-proposals as also the considerationresulting finally in the acceptance of the proposal. The proposal whenaccepted gives rise to an agreement. It is at this stage that theagreement is reduced into writing and a formal document is executedon which parties affix their signatures or thumb b impression so as tobe bound by the terms of the agreement set out in that document.Such an agreement has to be lawful as the definition of contract, asset out in Section 2(1) provides that "an agreement enforceable by lawis a contract". Section 2(g) sets out that "an agreement not enforceableby law is said to be void". 21.Applying the principles as laid down by Hon’ble Supreme Court, as afore-noted, as well as specific provisions of the Act, 1948 and the RegulationScheme, 1970, we are of the firm view that the contract of employment isbetween the appellant and the dock workers and not between theappellant and the Board. The Board has merely discharged its statutoryobligation with regard to regulation of dock workers.noted, as well as specific provisions of the Act, 1948 and the RegulationScheme, 1970, we are of the firm view that the contract of employment isbetween the appellant and the dock workers and not between theappellant and the Board. The Board has merely discharged its statutoryobligation with regard to regulation of dock workers. 21.Applying the principles as laid down by Hon’ble Supreme Court, as afore-noted, as well as specific provisions of the Act, 1948 and the RegulationScheme, 1970, we are of the firm view that the contract of employment isbetween the appellant and the dock workers and not between theappellant and the Board. The Board has merely discharged its statutoryobligation with regard to regulation of dock workers.noted, as well as specific provisions of the Act, 1948 and the RegulationScheme, 1970, we are of the fir