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TMI Blog2021 (8) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... rvisors of Central Sector Enterprises such as the Coal India Limited where the appellants were employed. The ceiling of the gratuity was raised to Rs. 10 lakhs w.e.f. 1.1.2007 in terms of office memorandum of Government of India dated 26.11.2008. 3. The appellants were paid such gratuity in terms of such office memorandum. However, later on, the Payment of Gratuity Act - For short, the 'Gratuity Act' was amended by Central Act No. 15 of 2010 which received the assent of the Hon'ble President on 17.5.2010. The relevant provisions of the Amending Act read as under: "1(1). This Act may be called the payment of Gratuity (Amendment) Act, 2010. (2) It shall come into force on such date as the Central Government may, by notification in the O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employee shall not exceed ten lakh rupees. xx xx xx (5) Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer." The Income Tax Act, 1961 10. Incomes not included in total income. - In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included - 1. xx xx xx 10 (ii). any gratuity received under the Payment of Gratuity Act, 1972 (39 of 1972), to the extent it does not exceed an amount calculated in accordance with the provisions of subsections (2) and (3) of section 4 of that Act;" 7. Learned counsel for the appellants argued that the amendment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aced by outweighing factors." 8. Learned counsel for the appellants also referred to a judgment of this Court in D.S. Nakara & Ors. v. Union of India (1983) 1 SCC 305 to contend that the cut-off date as 24.5.2010 has created two categories of employees, first who have attained the age of superannuation before the said date and second who have superannuated on or after 24.5.2010. Such classification is illegal and arbitrary in nature. 9. On the other hand, Mr. Vikramjit Banerjee, learned counsel for the Union has argued that D.S. Nakara's case deals with pensioners, who get recurring benefit every month whereas, the gratuity is one-time payment. This Court has held that the cut-off date so as to grant benefit of pension to the retir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment reported as State Government Pensioners' Association & Ors. v. State of Andhra Pradesh (1986) 3 SCC 501 wherein the payment of gratuity from a specified date of retirement was held to be not unconstitutional. This Court held as under: "2. ... Similar is the case with regard to gratuity which has already been paid to the petitioners on the then prevailing basis as it obtained at the time of their respective dates of retirement. The amount got crystallized on the date of retirement on the basis of the salary drawn by him on the date of retirement. And it was already paid to them on that footing. The transaction is completed and closed. There is no scope for upward or downward revision in the context of upward or downward rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in question either expressly or by necessary implication directs that those who had retired prior to 1-1- 1973 would be entitled to any additional amount by way of gratuity. The Tribunal was, therefore, in error in upholding that gratuity was payable in accordance with the Government Notification No. 33/12/73-AISC(ii) dated 24-1- 1975 to all those members of the All-India Services who had retired prior to 1-1-1973." 12. Sub-section (5) of Section 4 of the Gratuity Act protects the right of an employee to receive better terms of gratuity under any award or contract with the employer. The gratuity paid to the appellants on the strength of office memorandum dated 26.11.2008 would fall in the said sub-section. 13. However, what is exempt f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led price obtaining on the dates the sales were effected and not at the increased price which came into operation subsequently." 15. In another judgment reported as Orient Paper and Industries Ltd. & Anr. v. State of Orissa & Ors. 1991 Supp. (1) SCC 81, it was held that since the executive has been empowered to choose the date of commencement of the Act, such delegation cannot be said to be case of excessive delegation. The Court held as under: "29. Even if the section were to be seen as a delegation of power, it is a power conferred on the government to give full effect to the policy behind the legislation. It is with a view to achieving that purpose that the executive has been empowered to choose the time, place and forest produce for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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