RELIEF SOUGHT BY THE PETITIONERS

The petitioners are contractors with the respondents. They are engaged in executing the building and other construction works entrusted by the respondents under different agreements. They have filed this batch of writ petitions, assailing the orders issued by the Government of Andhra Pradesh through their Finance and Planning Department, in Memo No.4763/PFS, F8(A1)/07-1, dated 04.02.2008, directing the Director, Works and Accounts, to issue instructions to all PAOs/SPOs to effect recovery of amount @ 1% towards labour cess from all the contractors payments made from 26.06.2007, as illegal, arbitrary, violative of the provisions of Sections 4, 5 and 10 of Building and other Construction Workers’ Welfare Cess Act, 1996 (hereinafter referred to as ‘the Cess Act’) and violative of the principles of natural justice and, consequently to direct the respondents not to deduct 1% labour cess from the bills payable to the petitioners, raised by them in pursuance of the building and other constructions works executed by them under the respective agreements entered into by them with the respondents.

PLEADINGS OF THE PETITIONERS

2. As stated supra, the petitioners are registered contractors with the respondents and are engaged in undertaking building and other construction works entrusted by the Government and their various Departments, under various agreements entered into by and between them. The petitioners, after executing the building and other construction works entrusted by the respondents, are raising bills from time to time, which were being promptly released by the respondents. While so, the Deputy Financial Advisor and E.O.D.S. to Government, has issued orders in Memo dated 04.02.2008, impugned in this batch of writ petitions, directing collection/recovery of amount @ 1% towards labour cess from all the contractors payments made from 26.06.2007.

ARGUMENTS ADVANCED OF THE PETITIONERS

3. The learned counsel for the petitioners submitted that since the component of 1% labour cess was not included in the estimates of the agreements/contracts entered into by the petitioners with the respondents for undertaking building and other construction works, the respondents are not entitled to collect/recover the same from the bills payable to the petitioners. They submitted that on the basis of the orders issued by the Government in a Memo, the respondents are not entitled to collect/recover 1% labour cess from the bills of the petitioners, much less from a date prior to its issuance. They submitted that since at the time of entering into agreements/contracts by the petitioners with the respondents, Welfare Boards, as provided under Section 18 of the Building and Other Construction Workers’ (Regulation of Employment and Conditions of Service) Act, 1996 (hereinafter referred to as ‘the Workers Act’), were not constituted by the State of Andhra Pradesh, the respondents are not entitled to collect the 1% labour cess under the agreements/contracts entered into by the petitioners with the respondents, prior to the date of constitution of the Welfare Boards, and more so when the component of collection/recovery of 1% labour cess, was not included in the agreements. In support of their submission that an agreement cannot be uncertain and vague and it should be definite, placed reliance on the judgment of the apex Court in DDA v. Joint Action Committee, Allottee of SFS Flats (2008) 2 SCC 672. They submitted that no notice whatsoever was issued by the respondents either seeking implementation of the Cess Act or before issuing the impugned Memo in terms of which, they are seeking to collect/recover 1% labour cess from a retrospective date, and as such, the impugned Memo issued by the Government suffers from the vice of violation of principles of natural justice. They submitted that, in fact, the provisions of Sections 4 and 5 of the Cess Act, do not provide for collection of 1% labour cess directly from the bills