The Labour Cess cannot be retrospectively applied to tenders initiated before the cut-off date specified in the Circular dated 09.07.2010.

JUDGMENT :

Pushpendra Singh Bhati, J.

1. The instant writ petitions have been preferred claiming the following reliefs:

“i. by an appropriate writ, order or direction the respondents no.1 to 3 may be directed to not deduct the labour cess at source as per the circular dated 9.7.2010 (Ann.3) to the tender of the petitioner dated 29.6.2009 (Ann.2).

ii. Any other appropriate order which this Hon’ble Court deems fit just and proper in the facts and circumstances of the case may kindly be passed in favor of the petitioner.

iii. Cost be allowed to the petitioner.”

2. Brief facts of the case are that the petitioner is a Partner of M/s. Syed Luqman & Sons, Jodhpur, and the said Firm being a registered ‘AA’ Class PWD Contractor, was engaged in execution of the contract works, so awarded to it, relating to Government, Semi Government & Sub-contractors etc.

3. The bone of contention in the present case is that a Short- term Tender Information No.03/2009-10 dated 17.06.2009 (in short, ‘Tender in question’) was issued by the respondents in connection with construction of 48 Nos. LSQ Quarters in Police Line, Daijar, Jodhpur (Block ‘B’), as per which, the tender forms were to be submitted from 29.06.2009 to 03.07.2009. Upon being successful in the said tender process, the petitioner was awarded the contract for the said work. But at the time of final payment, the petitioner was subjected to deduction of Rs.1,99,554/- on account of Labour Cess under Section 3 of the Building and Other Construction Workers’ Welfare Cess Act, 1996 (hereinafter referred to as ‘Act of 1996’) and under Section 7 of the Building and Other Construction Workers’ Welfare Cess Rules, 1998 framed under the Act of 1996.

4. Learned counsel for the petitioner submitted that such deduction of Labour Cess, as impugned herein, was stated to have been made in pursuance of the Circular dated 09.07.2010 issued by the Government of Rajasthan, Labour & Employment Department. He further submitted that this was despite the fact that the said Circular dated 09.07.2010 clarified the position regarding collection of Cess under Section 3 of the Act of 1996 and Registration of Establishment under Section 7 of the Building and Other Constructions Workers’ (Regulation of Employment and Condition of Service) Act, 1996, by taking the cut off date as 27.07.2009 for the purpose of levy & collection of Cess. He further submitted that the said Circular, as reflected therein, received approval of the Finance Department, Government of Rajasthan on 30.06.2010, and admittedly, in the present case, the tender was accepted and work order was executed on 30.06.2010 i.e. prior to the said cut off date.

4.1. Learned counsel also submitted that the respondent authorities, vide Annexure-4 which is dated 14.11.2011, in a similar case, have arrived at a conclusion that the deduction of the Labour Cess under the Act of 1996 became applicable for the tenders, which were received/opened after 30.06.2010, whereas the tender in the present case, the Tender Forms were opened on 29.06.2009 and the work order was executed prior to 30.06.2010, and thus, the levy & collection of the Labour Cess was to be effected accordingly, and not in the manner as done in the present case by the respondents.

4.2. Learned Counsel further submitted that the impugned action on the part of the respondents is not sustainable in the eyes of law, on yet another ground, that the work in question, in pursuance of the Tender Process initiated on 29.06.2009, was to be completed by June, 2010 and that neither any circular nor any Act can become part of the contract after signing of the same and completion of the work thereunder, more particularly, in violation of the law on the subject i.e. the Indian Contract Act.

5. On the other hand, Mr. Rajesh Panwar, learned Senior Counsel assisted by Ms. Minal Singhvi, opposed the aforesaid limited contentions raised on behalf of the petitioner.

5.1. Learned Senior Counsel submitted that the Act of 1996 was enacted