Allahabad High Court
Cg Power And Industrial Solutions Ltd. ... vs U.P. Power Transmission Corporation ... on 24 February, 2020
Bench: Munishwar Nath Bhandari, Manish Kumar
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH ?Court No. - 2 Case :- MISC. BENCH No. - 125 of 2019 Petitioner :- Cg Power And Industrial Solutions Ltd. Thru. Authorized Repr Respondent :- U.P. Power Transmission Corporation Ltd. Thru. S.E. & Ors. Counsel for Petitioner :- Kartikey Dubey,Mahima Pahwa,Meha Rashmi Counsel for Respondent :- Puneet Chandra,Vinay Shanker Hon'ble Munishwar Nath Bhandari,J.
Hon'ble Manish Kumar,J.
1. Heard Shri Prashant Chandra learned Senior Advocate assisted by Ms. Meha Rashmi, Advocate appearing for the petitioner and Shri Puneet Chandra, learned counsel appearing for the respondents.
2. By this writ petition, a challenge is made to the letter dated 2.9.1996 and 29.12.2018 directing the petitioner for payment of 1% cess under the Building and other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 (in short 'Act of 1996').
3. The letters under challenge have been sent to the petitioner by the U.P. Power Transmissions Corporation Ltd. pursuant to the a contract entered with them. The amount of cess was not recovered initially by the Corporation. The letters impugned herein were sent pursuant to the Audit Report of the C.A.G. and has been challenged by the petitioner.
4. The challenge to the letters have been made in reference to the Act of 1996 alleging it to be not applicable on the first contract. It was only for supply of the equipments and the material.
5. The contest to the writ petition has been made by the side opposite referring to the nature of the contract. During the course of the argument, the other provisions relevant to the issue were also brought to the notice of the court. It is the Building and Other Construction Workers' Welfare Cess Act, 1996 (For short 'Cess Act of 1996') and the Rules framed thereunder.
6. Learned counsel for the petitioner submits that without a levy and assessment under the Cess Act of 1996 and the Rules made thereunder, letters sent by the U.P. Power Transmission Corporation Limited are not legal. It is more so when it is in reference to the Audit note of the C.A.G. without levy and assessment of amount under the Cess Act of 1996.
If cess was imposiable under the Act of 1996, then it was necessary to take exercise for levy and assessment under the Cess Act of 1996. In case of levy and assessment, the petitioner would have contested it and if he remained unsuccessful therein, to maintained an appeal.
7. The prayer is accordingly to set aside the letters under challenge, having not been issued after complying the process given under the Cess Act of 1996.
8. The counsel for the side opposite has contested the prayer made by learned counsel for the petitioner but he could not show an order for levy and assessment under the Cess Act of 1996. The letters under challenge make a reference of the Audit note of C.A.G only and pursuant to which the recovery is sought.
9. We have considered the rival submissions and find that without taking steps, as given under the Cess Act of 1996, recovery of the amount pursuant to the Audit objection of the C.A.G. has been sought by the side opposite.
10. It could not have been based on the audit report of the CAG rather should have been as per the Cess Act of 1996. The petitioner in that case could have contested the levy of Cess on the ground that the first contract was only for supply of equipment and material without involving construction workers.
11. The issue aforesaid goes in the root and otherwise it could have been considered by the authority before levy and assessment under the Cess Act of 1996 but the impugned letters have been issued simply in reference to the Audit objection of CAG.
12. In view of the above, we hereby set aside the letters dated 2.9.2016 and 29.12.2018 (Annexure No.1 and 2, respectively).
It is however with the liberty to proceed in the matter under the Cess Act of 1996 and the Rules framed thereunder if the Act of 1996 is applicable on first contract.
13. In case of any exercise for levy and assessment of the Cess, the petitioner would be at liberty to contest it in reference to the arguments raised herein. The levy and assessment would obviously be done by the authority under the Cess Act of 1996 and the Rules framed thereunder.
14. The petition is disposed of with the aforesaid.
15. As a consequence of setting aside of the impugned letters, the side opposite would proceed to release the Bank guarantee and the payment of remaining amount, if no impediment exists in reference to the work assigned and performed by the petitioner.
Order Date :- 24.2.2020 Shukla