R. Banumathi, J.

Challenging the vires of Section 3(1) of the Building and Other Construction Workers Welfare Cess Act, 1996 and also challenging the vires of Rule 3 of the Building and Other Construction Workers Welfare Cess Rules, 1998 and praying for other reliefs, the petitioner has filed this writ petition.

2. The petitioner is a consortium comprising of M/s. Abhijeet Infrastructure Limited and M/s. Corporate Ispat Alloys Limited with M/s. Abhijeet Infrastructure Limited as its lead member. The petitioner is the agreement holder for construction, operation, maintenance and transfer of NH 33. The concessional agreement was entered into between the petitioner as the concessionaire and National Highway Authority of India for four laning of Barhi-Hazaribagh Section from km 0.00 to 40.500 of NH – 33 in the State of Jharkhand on „Design, Built, Finance, Operate and Transfer (DBFOT) Toll basis under NHDP Phase III Project. For carrying out the aforesaid construction of four laning of Barhi-Hazaribagh Section of NH – 33 from km 0.00 to km 40.500, the petitioner has appointed EPC Contractors/Sub-Contractors, namely, (i) Abhijeet Projects Limited – the Contractor, (ii) Shakambari Niketan Pvt. Ltd. and (iii) Yash Builders Pvt. Ltd. – Sub-Contractors.

3. The case of the petitioner is that the aforesaid construction of four laning of Barhi-Hazaribagh Section of NH – 33 from km 0.00 to km 40.500, the labour component involved in EPC Contractor/Sub-Contractors is very small, that is about 15-20% of the total cost incurred by them. While so, the National Highways Authority of India issued a letter dated 9.6.2012 to the petitioner-company enclosing a letter of Audit Officer, Government Audit Team, National Highways Authority of India, New Delhi, by which it was, interalia, decided for making deduction at source at the rate of 1% of the cost of construction incurred by the petitioner-company.

4. Being aggrieved by such notice issued for making deduction at source at the rate of 1% of the cost incurred by the petitioner-company, the petitioner has filed this writ petition (i) challenging the vires of Section 3(1) of the Building and Other Construction Workers Welfare Cess Act, 1996 (BOCWW Cess Act), enacted by the Parliament being beyond the legislative competence of the Parliament as it seeks to levy and collect cess on the “cost of construction” incurred by an employer without defining the term, “cost of construction”; (ii) seeking for a declaration that Rule 3 of the Building and Other Construction Workers Welfare Cess Rules, 1998 (BOCWW Cess Rules), is ultra vires the parent Act and Article 246 of the Constitution of India; (iii) seeking for a direction that the levy and collection of cess (fee) at the rate not exceeding 2% but not less than 1% of the cost of construction instead of only on the labour component involved in the cost of construction, is arbitrary, unreasonable and confiscatory, since the element of labour cost is only about 10-15% of the total cost of construction; (iv) for quashing the Notification No. S.O. 2899 dated 26.9.1996 issued by the Central Government by which cess at the rate of 1% of the cost of construction incurred by an employer is to be levied and (v) for restraining the National Highways Authority of India from making deduction at source at the rate of 1% of the cost of construction incurred by the petitioner-company from the petitioner-company, for which letter dated 9.6.2012 has been issued by them to the petitioner-company.

5. Resisting the writ petition, the State of Jharkhand filed counter-affidavit contending that the BOCWW Cess Act well within the legislative competence of the Parliament and cess is levied at the rate of 1% of the cost of construction as a welfare measure for the workers as the said enactment has been intended to provide health and welfare measures for the workers engaged in building and other construction works.

6. Union of India has filed its counter-affidavit contending that t