Payment Of Gratuity Act – No Retrospective Effect For 2010 Amendment Enhancing Gratuity Upper Limit As Rs 10 Lakhs: Supreme Court

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Payment Of Gratuity Act – No Retrospective Effect For 2010 Amendment Enhancing Gratuity Upper Limit As Rs 10 Lakhs

Case: Krishna Gopal Tiwary vs Union of India

Coram: Justices Hemant Gupta and AS Bopanna

Court No: CA 4744 OF 2021

Court Observation: “The Gratuity Act contemplated rupees ten lakhs as the amount of gratuity only from 24.5.2010. Such gratuity is the amount payable only once. Thus, the cut-off date cannot be said to be illegal, it being one-time payment. Therefore, such amendment in the Gratuity Act cannot be treated to be retrospective. Therefore, the provisions of the statute cannot be said to be retrospective.”

“In view of the above, we find that the date of commencement fixed by the Executive in exercise of power delegated by the Amending Act cannot be treated to be retrospective as the benefit of higher gratuity is one-time available to the employees only after the commencement of the Amending Act. The benefit paid to the appellants under the office memorandum is not entitled to exemption in view of specific language of Section 10(10)(ii) of the Income Tax Act.”

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