*Krishna Gopal Tiwari & another Vs Union of India*
*Forum-Supreme Court*
*Civil Appeal No 4744 of 2021*
*Sub-Whether Section 10(10(ii) dealing with exemption on account of payment of gratuity where the limit was enhanced from Rs 3.50 lacs to Rs 10 lacs is retrospective or prospective in nature.*

The appellant in this case were employees of Coal India Limited in whose case as per the Office Memorandum , the ceiling of gratuity was raised to Rs 10 lacs w.e.f. 1/1/2007 and later on the Payment of Gratuity Act was also amended to increase the limit to Rs 10 lacs w.e.f.24/5/2010. The employees of Coal India who were paid gratuity between 1/1/2007 to 24/5/2010 on whose gratuity tax was deducted at source contended that the fixation of date of 24/5/2010 for increase in the limit was illegal and arbitrary as it differentiated between two classes of employees. However the court relying on the decision in the case of Orient Paper Industries Limited & another Vs State of Orissa & Ors(1991) Supp 1 SCC 81(SC) and other cases held that the State has a right to choose a date from which the enhanced benefit would be available under the Income-tax Act,1961 and it cannot be said to be violative of Constitution of India.

Ramesh Patodia
14-08-2021