Andhra Pradesh High Court - Amravati
M/S Wind World Indian Ltd, vs Abpir Employeement Rep. By Its ... on 4 August, 2022
THE HONOURABLE SRI JUSTICE SUBBA REDDY SATTI
WRIT PETITION No.1887 OF 2015
ORDER:
The Authorized Signatory of the petitioner filed the above writ petition seeking writ of Mandamus declaring the demand notice dated 09.9.2014 and all other subsequent proceedings of the 2nd respondent requiring the petitioner to pay Cess under the provisions of the Building and Other Construction Workers Welfare Cess Act, 1996 (for short, the Cess Act) on the project cost incurred by the petitioner towards execution of Wind Farms as illegal, arbitrary and unconstitutional, and to issue a consequential direction to the 2nd respondent not to proceed in furtherance to the demand notice dated 09.9.2014 etc.
2. In the affidavit, it was contended inter alia that the petitioner engaged in Wind Power Development and Generation of Power. The Wind Mill will be erected on a concrete platform and the power generated from the Wind Mill will be transmitted to a Sub-station through electrical lines. The installation of a Wind Mill would involve 94% cost towards the equipment, 5% towards land and not more than 1% towards electrical and civil works. The petitioner and its subsidiary companies proceeded with execution of the Wind Power Projects at different suitable places of Kurnool District. The necessary equipment like Rotor, Stator, Blades, Tower Segments etc., are manufactured in the units belonging to the petitioner. Upon transportation to the respective sites they were erected after preparing the concrete foundations. The necessary land for erection of the Wind Mills 2 was taken by way of advance possession from the State of Andhra Pradesh and the Project has been accordingly executed.
3. The 2nd respondent issued demand notice dated 09.9.2014 individually to the petitioner and all its subsidiary companies involved in the execution of the Project, directing them to pay Cess as per Section 3 of the Cess Act. The 2 nd respondent demanded 1% of the construction cost of the Project towards Cess from each company. The petitioner issued reply on 20.9.2014 and all the affected bodies have filed detailed objections before the 2nd respondent raising various contentions. The 2nd respondent issued a letter dated 13.10.2014 directing the petitioner to appear on 28.10.2014 before the Assessing Officer with relevant information. To the said letter, the petitioner issued reply on 28.10.2014 seeking time to submit the necessary information. The petitioner addressed another letter on 29.11.2014 furnishing necessary information. An amount of Rs.3,22,647/- was paid towards the construction cost, civil and electrical works leaving the cost of machines, segments and land. In fact, the amount was paid, according to the petitioner, without prejudice to the contention of the petitioner that it is not liable to pay the Cess under the Cess Act. The 2nd respondent addressed another letter dated 23.12.2014 stating that total cost of construction towards the power plants with 84 MW would come to Rs.394.8 crores and the Cess need to be calculated on the entire project cost. Petitioner was directed to make out its case failing which the Cess would be imposed on the entire project cost. 3
4. With regard to the 2nd respondent's demand that the Cess payable on the entire Project cost without confining to the actual cost of construction, the petitioner relies upon reply sent by NREDCAP to the 2nd respondent dated 13.1.2015 saying that the Wind Farm does not involve construction activity with labour component like in buildings. Thus the petitioner contends that the demand towards entire project cost incurred in setting up Wind Farm is illegal and the authority has to exclude cost of Wind Mill and the land. Petitioner relied upon order in Writ Petition No.4587 of 2008 and batch, dated 15.7.2008 that the definition of 'cost of construction' is clear and it includes all expenditure incurred by the employer in connection with the building or other construction work but not the entire value of the work.
5. The writ petition was admitted on 04.2.2015 basing on the contention of the learned counsel for the petitioner and placing reliance upon the decision in M/s.Coromandel Prestcrete Private Ltd vs. State of A.P.1. Learned single judge granted interim stay in pursuance of the demand notice dated 09.9.2014.
6. No counter was filed by the Government. However, learned Government Pleader would contend that under Rule 3 of the Cess Rules, the cost of construction shall not include cost of land, any compensation paid or payable to a worker or his kin under the Workmen's Compensation Act.
1 2011 (6) ALT 703 4
7. Since the petitioner submitted explanation to the demand notice issued by the 2nd respondent, including objection with regard to levy of Cess, which according to the learned counsel for the petitioner, is exempted under Rule 3 of the Rules, the 2 nd respondent shall consider all the objections raised by the petitioner and pass appropriate orders giving opportunity of personal hearing to the petitioner.
8. The 2nd respondent shall issue notice or intimation to the petitioner about the date of hearing. 2nd respondent shall pass appropriate orders duly considering the provisions of the Cess Act and the Rules made thereunder, within a period of four weeks from the date of receipt of a copy of this order after providing opportunity to the petitioner.
9. Accordingly, this writ petition is disposed of. No costs. Miscellaneous applications, pending if any, shall stand closed.
_____________________________ JUSTICE SUBBA REDDY SATTI August 04, 2022 vasu