Andhra Pradesh High Court - Amravati
M/S Nsl Textiles Limited vs The Special Chief Secretary on 30 June, 2022
RC,J
W.P.No.16245 of 2021
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HON'BLE SRI JUSTICE RAVI CHEEMALAPATI
WRIT PETITION No. 16245 of 2021
ORDER:
This Writ Petition has been filed by the petitioner invoking jurisdiction of this Court under Article 226 of the Constitution of India for the following relief:
"...issue a writ or order more particularly in the nature of Mandamus quashing the impugned notice R.C.No.C/533-3/2018, dated 06.07.2021 and 14.06.2021 issued by the 2nd respondent declaring it as illegal being contrary to the provisions of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act,1996 and Rules made thereunder and the Building and Other Construction Workers Welfare Cess ACT, 1996 and Rules made thereunder and also offends the Article 14 of the Constitution of India besides violating the principles of natural justice, further declaring that the Cess is not payable on the materials supply, designing, supplying and erection of Plant and Machinery........"
2. The case of the petitioner, in brief, is that the management of the petitioner after plan approvals and registration under the Factories Act, 1948, commenced construction of the buildings, structures etc., to locate the plant and machinery in 2007 at Veeravalli village, Bapulapadu Mandal, Krishna District and completed the constructions and erection of plant and machinery and commenced production as a factory on 01.01.2009. It is the further case of the petitioners that construction of sheds and installation of plant and machinery was done by utilizing the services of local maistries and workers and the construction material was purchased by the petitioner from the vendors directly and the total expenditure incurred was Rs.34.76 crores, which includes the cost of materials supplied of Rs.22.24 crores and labour component cost of Rs.12.52 crores. It is the further case of the petitioners that the 2nd respondent in his notice R.C.No.C/533-3/2018, dated 06.07.2021 and RC,J W.P.No.16245 of 2021 2 14.06.2021 stating that since the vigilance and Enforcement Department has pointed out that the estimated cost of construction is Rs.27.63 crores, the petitioner has to pay Cess amount of Rs.27,63,240/- and directed the petitioner to produce all relevant documents and also to pay 1% cess on the total cost of construction or else action will be taken under the relevant provisions of the Act for recovery of cess amount together with penalty equivalent to the cess amount and interest at 2% for every month. The petitioner has submitted his reply vide Letter dated 20.07.2021. Since the impugned show cause notice was issued without following the provisions envisages under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act,1996 and Cess Act and Rules made thereunder, the present writ petition has been filed.
3. Resisting the claim of the petitioner, the 2nd respondent filed counter affidavit justifying the quantum of cess demanded in the impugned notice contending that as per the provisions Cess Act and Cess Rules, the petitioner has to pay Cess on the total cost of construction. It is further stated that if the petitioner is aggrieved on the quantum of cess levied the appropriate authority to adjudicate the same is the Assessing Officer and thus the writ petition is not maintainable and hence prayed to dismiss the writ petition.
4. Heard learned counsel for the petitioner and the learned Advocate General for the respondents.
5. The learned counsel for the petitioner in elaboration to what has been stated in the affidavit has contended that the impugned notice cannot be termed as a notice as contemplated under Section 4(2) of the Building And RC,J W.P.No.16245 of 2021 3 Other Construction Workers‟ Welfare Cess Act, 1996 Act (for short, „the Act‟) since it contained a direction to the petitioner to pay 1% cess and to submit all the relevant documents and thus the authorities have straight away passed an order without affording an opportunity to the petitioner to put forth his case and thus it is contrary to Section 4(2) of the Act and also against the principles of natural justice and thus the impugned notice has to be set aside.
5. On the other hand, the learned Advocate General though supported the quantum of cess levied under the impugned notice, has submitted that section 4(2) of the Act mandates issuance of a notice before passing order of assessment and further submitted that based on the report of the Regional Vigilance & Enforcement Department the impugned notice has been issued levying cess mentioned therein.
6. In view of the above submissions, this Court feels it relevant to extract Section 4 of the Act, which deals with „Furnishing of returns‟.
"4. Furnishing of returns.--(1) Every employer shall furnish such return to such officer or authority, in such manner and at such time as may be prescribed.
(2) If any person carrying on the building or other construction work, liable to pay the Cess under section 3, fails to furnish any return under sub-section (1), the officer or the authority shall give a notice requiring such person to furnish such return before such date as may be specified in the notice."
7. It is evident as per sub Section-2 of Section-4 of the Act that if any person carrying on the building or other construction work fails to furnish any return, the authority shall give a notice requiring him to furnish return.
8. A perusal of the impugned notice would goes to show that the same contains a direction to the petitioner to pay the amount levied towards 1% of RC,J W.P.No.16245 of 2021 4 cess and thus the same cannot be termed as a notice as mandated under sub Section-2 of Section 4 of the Act.
9. At this juncture, the learned Advocate General has submitted that the impugned order may be treated as a notice under Section 4(2) of the Act and a direction may be given to the petitioner to submit its explanation and on receipt of such explanation, the authorities, after due consideration of the explanation submitted by the petitioner, would pass appropriate orders levying cess amount payable by the petitioner.
10. The learned counsel for the petitioner has agreed for such a course to follow and submitted that reasonable time maybe afforded to the petitioner to submit his explanation. The learned counsel for the petitioner has further contended that liberty may be given to the petitioner to raise all the grounds in its explanation in addition to the grounds already taken while submitting explanation dated 20.07.2021.
11. In view of the submissions made by both the learned counsel, with the consent of both the counsel, without going into merits of this case, this Court feels it appropriate to dispose of the petition with the following directions:
(a) The impugned notice Rc.No.C/533-3/2018, dated 06.07.2021 and 14.06.2021 be treated as a notice under Section 4(2) of the Building and Other Construction Workers‟ Cess Act, 1996.
(b) The petitioner is directed to submit explanation within four (04) weeks from today granting permission to raise all the pleas available in addition to the explanation already submitted on 20.07.2021.
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(c) On submission of the explanation, the respondent authorities are directed to pass appropriate orders strictly in accordance with law and communicate the same to the petitioners within eight (08) weeks thereafter.
(d) There shall be no order as to costs.
As sequel thereto, miscellaneous petition, if any, pending shall stand closed. Interim orders, if any, shall stand vacated.
_________________________ JUSTICE RAVI CHEEMALAPATI 30th June, 2022 RR RC,J W.P.No.16245 of 2021 6 HON'BLE SRI JUSTICE RAVI CHEEMALAPATI WRIT PETITION No.16245 of 2021 30th June, 2022 RR RC,J W.P.No.16245 of 2021 7