Indian Kanoon - Search engine for Indian Law

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/530/2012, dated 10.06.2021 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 2009 at Budampadu, Guntur District and completed the constructions and erection of plant and machinery and commenced production as a factory on 30.06.2010. 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.7.25 crores, which includes the cost of materials supplied of Rs.4.42 crores and labour component cost of Rs.2.42 crores. It is the further case of the petitioners that the 2nd respondent in his notice R.C.No.C/530/2012, dated 10.06.2021 stating that since the vigilance and Enforcement Department has pointed out that the estimated cost of construction is Rs.22.65 crores, the petitioner has to pay Cess amount of Rs.22,65,000/- 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.

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 Other Construction Workers‟ Welfare Cess Act, 1996 Act (for short, „the Act‟) since it contained a direction to the petitioner to pay the cess amount of Rs.22,65,000/- 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.

(a) The impugned notice R.C.No.C/5302012, dated 10.06.2021 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.