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It is the grievance of the writ petitioners that from the outstanding dues, the deduction of 1 per cent was made to the balance payable on account of Labour Welfare Cess.

According to the writ petitioners, such deduction had been made from the running account bills of the petitioners to the extent of 1 per cent Cess, which is absolutely illegal exercise of the respondent authorities.

It has further been stated that the said deduction made in pursuant to the decision as contained in letter no.4013 dated 13.09.2010 issued by the Development Commissioner, Government of Jharkhand, Ranchi had clarified the position for levy of Cess under the Building and other Construction Workers Welfare Cess Act, 1996. It has specifically been provided therein that 1 per cent Cess must be provided for in the estimate of the project expenses and in case where such provisions have not been made, the same is to be recovered from the emergency fund expenses of the concerned department.

According to the writ petitioners, such stipulation having not been made in the agreement, therefore, deduction of 1 per cent Cess from the running account bills of the writ petitioners is highly arbitrary and illegal and therefore, request has been made to refund the said amount and having given no heed thereof, these writ petitions have been filed.

3. Mr. Deepak Kumar Sinha, learned counsel for the respondent nos.1, 2 and 4 has contested the case by filing the counter affidavit which inter-alia contains the facts that as per Clause-37 of the Contract wherein, under Clause-37(i), it has been stipulated that Sales Tax/VAT or any other Tax on materials, Sales Tax on Works (if any) and Tax of any type on Labour Service Tax and Cess under "The Building and other Construction Workers Welfare Cess Act 1996 and Cess Rules 1998" in respect of this Contract shall be payable by the Contractor and the Employer, shall not entertain any claim whatsoever in this respect.

i) Sales Tax/VAT or any other Tax on materials, Sales Tax on Works (if any) and Tax of any type on Labour Service Tax and Cess under "The Building and other Construction Workers Welfare Cess Act 1996 and Cess Rules 1998" in respect of this Contract shall be payable by the Contractor and the Employer, shall not entertain any claim whatsoever in this respect.
ii) The Contractor shall deposit royalty and obtain necessary permit for supply of the red bajri, stone, kankar etc, from local authorities.
iv) Tax Deduction at Source will be done by the Employer towards Income Tax, Sales Tax on works, Labour Welfare Cess and any other tax as required by law, from the Running Account and Final Bills."

Thus, it is evident that the contention with respect to the refund of the said amount deposited/deducted by way of 1 per cent Cess which is being executed to be refunded on the ground that such amount is to be deposited by the State Government and not by the Contractor but such contention is in conflict with the condition under Clause-37 which contains a condition that any type on Labour Service Tax and Cess under the building and other Construction Workers Welfare Cess Act, 1996 and Cess Rules, 1998 in respect of this Contract shall be payable by the Contractor and the Employer, shall not entertain any claim whatsoever in this respect.