2022 Supreme(AP) 51
A.V.SESHA SAI
Voltas Limited, a company incorporated Under the Indian Companies Act, 1913 – Appellant
Versus
Union of India – Respondent
Advocates:
Advocate Appeared:
For the Appellant : Sri C.R.Sridharan,
For the Respondents: Sri N.Harinath, Adv
Judgement Key Points
- The petitioner, Voltas Limited, is engaged in manufacturing and selling equipment such as air conditioners and was awarded a contract by the Airport Authority of India for supply, installation, testing, and commissioning of HVAC systems at Visakhapatnam Airport. [2000542490003] (!)
- The Labour Enforcement Officer issued a notice dated 22.07.2008 demanding payment of cess at 1% of the work order value under Section 3 of the Building and Other Construction Workers’ Welfare Cess Act, 1996. [2000542490001][2000542490002][2000542490003]
- The petitioner's activity of installing air conditioning systems does not constitute "building or other construction work" as defined under Section 2(d) of the Building and Other Construction (Regulation of Employment and Conditions of Service) Act, 1996, which excludes work not involving construction, alteration, repairs, maintenance, or demolition related to specified structures. [2000542490004][2000542490008]
- Civil construction work at the airport was undertaken by a different contractor, separate from the petitioner's installation work. [2000542490011]
- Cess under the Cess Act is leviable only on building or other construction works involving construction, repair, demolition, or maintenance related to buildings or specified works; mere installation or erection of equipment like air conditioning systems without construction work is not subject to cess. [2000542490011]
- Section 3 of the Cess Act provides for levy of cess at a rate between 1% and 2% on the cost of construction incurred by an employer, collected from employers including through deduction at source or advance collection. [2000542490010] (!) (!) (!)
- A prior order by the Deputy Labour Commissioner in a similar matter involving the petitioner held that the legislation did not apply and withdrew a similar notice. [2000542490004][2000542490012]
- The writ petition was allowed, setting aside the impugned notice dated 22.07.2008, with no order as to costs. [2000542490013] (!)
ORDER :
Heard Sri C.R.Sridharan, learned Senior Counsel representing Sri G.V.S.Ganesh, learned counsel for the petitioner on record, and Sri N.Harinath, learned Assistant Solicitor General of India, apart from perusing the entire material available on record.
2. In the present Writ Petition, challenge is to the notice bearing No.42/20/08-LEO/VSP, dated 22.07.2008, issued by the Labour Enforcement Officer (Central) Maharanipeta, Visakhapatnam-second respondent herein.
3. By way of the said notice, second respondent herein requested the petitioner herein to deposit the cess @ 1% of the Work Order value as per Section 3 of the Building and Other Construction Workers’ Welfare Cess Act, 1996 (for brevity, ‘the Cess Act’) and the Central Rules, 1998.
4. According to the petitioner, it is a company incorporated under the provisions of the Companies Act, 1956 and is engaged in the business of manufacturing, selling various kinds of equipments of machinery such as Air Conditioners, Chiller packages, fork lift trucks, cranes, freezers, visi coolers etc. The Airport Authority of India awarded contract in favour of the petitioner for supply, installation, testing and commissioning of Heating, Vent
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