Point of Law: Cess under the Cess Act read with BOCW Act is leviable in respect of building and other construction works.

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, Ventillation and Air-conditioning (HVAC) system at Visakhapatnam. Preceded by the inspection undertaken on 11.01.2008 and the report, dated 15.11.2008, second respondent herein issued the impugned notice, calling upon the petitioner to pay cess @ 1% of the Work Order value as per Section 3 of the above mentioned legislation. Challenging the validity and the legal sustainability of the said notice, dated 22.07.2008, the present Writ Petition came to be instituted and the composite High Court, while ordering Rule Nisi, on 31.12.2008, granted interim stay as prayed for in W.P.M.P.No.37758 of 2008.

5. According to the learned Senior Counsel, the action impugned in the present Writ Petition, which culminated in the notice, dated 22.07.2008, is highly illegal, arbitrary, unreasonable and without jurisdiction. In elaboration, it is further contended by the learned counsel that the activity undertaken by the petitioner would not fall under the definition of building or other construction work as defined under Section 2 (d) of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996. It is also the submission of the learned counsel that the said definition does not include the work pertaining to Air Conditioning systems. It is the further submission of the learned counsel that, in respect of the work entrusted to the petitioner at New Delhi, when a similar situation arose, the appropriate authority-Deputy Labour Commissioner held that the provisions of the enactment would not apply to the petitioner.

6. In support of his submissions and contentions, learned Senior Counsel places reliance on the judgment of the Honourable Apex Court in Uttar Pradesh Power Transmission Corporation Limited v. CG Power and Industrial Solutions, (2021) 6 SCC 15.

7. Strongly resisting the Writ Petition, it is submitted by Sri N.Harinath, learned Assistant Solicitor General of India, that there is no illegality nor there exists any infirmity in the impugned order and, in the absence of the same, the questioned action is not amenable for any judicial review under Article 226 of the Constitution of India. In elaboration, it is further submitted by the learned Assistant Solicitor General of India that, in the instant case, construction activity and the installation of Air Conditioning System went on simultaneously, as such, the entire activity needs to be taken into consideration and, if the same is taken into consideration in such a manner, the activity undertaken in the instant case would fall under the definition of Section 2 (d) of the Building and Other Construction (Regulation of Employment and Conditions of Services) Act, 1996 and, as such, invocation of the provisions of Section 3 of the Cess Act by the respondents herein cannot be fau