Firm Converting Of Henna leaves Into Henna Powder Doesn't Fall Under Heavy and Fine Chemicals Dyes, EPF Act Not Applicable: Rajasthan High Court

The Rajasthan High Court held that the petitioners are not changing the original nature of the henna leaves as the end product, i.e. the Henna Powder has the same nature, which the Henna leaves have and the petitioner does not fall under Section 1 (3) (a) of the Employees Provident Fund Act, 1952.

A single bench of Justice Nupur Bhati found that Henna powder prepared by the petitioner firm cannot be used to impregnate tissues. Further, it is not capable of being fixed to the fabric, hair, feet or hands as the Henna powder is not fugitive in its raw form and gets washed off with water and also blends in water, thus, having no wash fastness. Also, it is writ large that the petitioner firm is not making a chemical powder as the nature of the Henna leaves is the same as of the final product, i.e. Henna powder and no chemical is used to make the final product.

Writ petitions were filed by the petitioner firms engaged in the business of manufacturing Heena mehandi powder by crushing the mehandi leaves into powder, challenging the order passed by the Appellate Tribunal under the Employees’ Provident Fund & Misc. Provisions Act, 1952, whereby, the Appellate Tribunal while holding that the petitioners do not fall within the ambit of the main heading ‘Heavy & Fine Chemicals’ vide Item No.(viii) Schedule I to the Act of 1952, held that the petitioners would be covered within the scope of sub-heading ‘intermediate dyes’.

The Rajasthan High Court after taking into consideration the scope of work done by the petitioners and the definitions of entries, held that the petitioners do not fall under the category of Heavy and Fine Chemicals, including (viii) intermediate dyes, colour lacs and toners as laid down in the schedule I. The order of the Appellate Tribunal was thus quashed and set aside.

The geographical area where the petitioners are located i.e. Sojat City, Pali Rajasthan is known for manufacturing heena mehandi powder and is a global hub of industries carrying the said business and an order holding the said industries to be falling within the purview of EPF Act would have had a huge impact on all the industries concerned.

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The petitioners were represented by Kothari & Associates led by Mr. Vinay Kothari and the matter was argued by Senior Advocate Mr. Vikas Balia.

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