The imposition of 1% cess under the Building and Other Construction Workers Act is a statutory obligation aimed at benefiting workers, and is applicable despite claims regarding the Factories Act exemptions.

JUDGMENT :

Heard learned counsel for the parties.

2. By way of this writ petition, the petitioner assails the action of the opposite parties in imposing 1% Cess vide order dated 12.1.2011 (Annexure-1) under Building and other Construction (Regulation of Employment and Conditions of Services) Act, 1996.

3. The contention of the petitioner is that as per the minutes of the meeting dated 19.11.2011 under Annexure-1 decision as under is taken:

“As regards the recovery of 1% Cess and making deposit with the Commissioner under Building and Other Construction workers Act, 1996, it was clarified that such provision is applicable with effect from 15.12.2008. In case in the Contract/Estimate, there is no such provision the amount to assessed will be 1st recovered from the bills of the Contractors and thereafter, these are to be reimbursed by Paradip Port Trust.”

The said decision has been taken unilaterally without taking into consideration the recommendation made by the Chief Engineer, Paradip Port Trust to the Secretary of PPT vide its letter dated 17.02.2012 under Annexure-2, which is reproduced hereunder for ready reference.

“Sub: Deposit of 1% Cess under Building and other construction Workers Welfare Cess Act, 1996.

Ref: Letter No.AD/ir-22/2010/639 DATED 03.02.2012 OF Secretary, PPT.

With reference to the letter under reference, this is to inform that after further perusal of the matter with specific reference to Section-2(d) of the Act (copy enclosed), it is apparent that payment of cess is not applicable to any construction work in an organization to which provision of Factories Act, 1948 apply. In our case, the Directorate of Factories and Boilers, Odisha, Bhubaneswar have communicated that Factories Act, 1948 will apply to Paradip Port Trust, since the Port owns and operates a water treatment plant (copy enclosed).

In view of the above facts, it is requested to examine the matter and inform to the District Labour Officer, Jagatsinghpur that collection of cess is not applicable to various works undertaken by Paradip Port Trust.”

In this regard, the petitioner has made a representation on 16th December, 2011, which was not considered.

4. Counsel for the opposite parties, while arguing the matter on last occasion, has contended that the present case is covered by decision of the Hon’ble Supreme Court in the case of Lanco Anpara Power Limited Vs. State of Uttar Pradesh and others , reported in (2016) 10 SCC 329 . However, in our considered opinion it is a statutory liability and the petitioner is bound to pay 1% cess pursuant to a beneficial legislation meant for the workers and for their benefit 1% cess is required to be collected. Moreover, as it appears the contractor’s representatives had participated and agreed to the minutes under Annexure-1.

However, learned counsel of the petitioner placed reliance on paragraphs 12, 25, 32, 34, 37 and 38 of Lanco Anpara Power Limited (supra). For better appreciation of facts, those paragraphs of Lanco Anpara Power Limited (supra) are quoted below.

“12. The second submission, which in fact flows from the first submission noted above, was that the approach of the High Court in dealing with the matter was contrary to law. In this behalf, it was pointed out that the High Court has rejected the case of the appellants herein on the ground that even if the appellants had obtained a licence under the Factories Act for registration to work a factory, the appellants were still not excluded from the provisions of the Welfare Cess Act as no manufacturing process or factory operation had started by the appellants and, therefore, the appellants did not answer the description of “factory” within the meaning of the Factori