The court established that the petitioners were liable to pay cess on the total contract price, including the supply portion, as per the provisions of The Building And Other Construction Workers' (Regulation of Employment and Conditions of Service) Act, 1996 and The Building And Other Construction Workers' Welfare Cess Act, 1996.

JUDGMENT :

Ajit Singh, J.: -

Since both Writ Petition Nos. 3956/2009 and 14029/2009 involve a common issue, they were heard together and are being decided by this order.

2. The petitioners are companies and registered under the Companies Act. They are contractors of electrical works. Respondent No. 2 is also a company registered under the Companies Act. It is wholly controlled by the state Government.

3. The petitioners have been awarded contracts by respondent No. 2 for erection of 33/11 KV S/S associated with 33 KV and 11 KV lines. These contracts have been awarded under Japan Bank of International Cooperation (JBIC) Scheme on TOTAL TURN-KEY BASIS, which broadly includes the supply, transportation to work site, storage, insurance, erection, assembling, testing and commissioning of the lines and line equipments. The Scheme is being implemented through Rural Electrification Corporation, New Delhi, by respondent No. 2.

4. The relevant Clause 5.2 of the contract which deals with the contract price, reads as under :-

5.2. CONTRACT PRICE

For supply portion (Lines and Sub Stations)

The total Contract Price inclusive of all taxes and duties for the entire scope of work of supply portion under the Contract shall be Rs. 8,64,46,244/- (In words Rupees Eight crores sixty four lacs forty six thousand two hundred forty four only).

Detailed break-up of the Contract Price for entire supply portion of New 33/11 KV S/S with associated 33 KV and 11 KV lines are given in Schedule 1 (including Schedule 1.1, 1.2, 1.3, 1.4, 1.5, 1.6) enclosed with this award.

For erection portion (Lines and Sub Stations)

The total Contract Price inclusive of all taxes and duties for the entire scope of work of erection portion Xinder the Contract shall be Rs. 72,81,987/- (In words Rupees Seventy two lacs eighty one thousand nine hundred eighty seven only).

Detailed break-up of the Contract Price for entire erection portion of New 33/11 KV S/Ss with associated 33 KV and 11 KV lines are given in Schedule 2 (including Schedule 2.1, 2.2, 2.3, 2.4, 2.5, 2.6) enclosed with this award.

For Civil Works:

The total Contract Price for Civil Works inclusive of all taxes and duties for the entire scope of work Civil Works under the Contract shall be Rs. 1,07,71,769/- (In words Rupees One crores seven lacs seventy one thousand seven hundred sixty nine only).

Detailed break-up of the Contract Price for entire Civil works for 33/11 KV S/Ss are given in Schedule 3 (including Schedule 3.1 to 3.16) enclosed with this award. However, payment shall be made as per applicable schedule depending upon soil condition.

(iv) Total Contract Price :

The total Contract Price inclusive of all taxes and duties for the entire scope of work (supply portion + erection portion + Civil works) under the Contract shall be Rs. 10,45,00,000/- (In words Rupees Ten crores forty five lacs only)." '"',

5. The Parliament has enacted The Building And Other Construction Workers' (Regulation of Employment and Conditions of Service) Act, 1996 (in short, "the main Act") to regulate the employment and conditions of service of building and other construction workers and to provide for their safety, health and welfare measures and for other matters connected therewith or incidental thereto. Section 18 of this Act mandates every State Government to constitute a Welfare Board so as to provide and monitor social-security, schemes and welfare measures for the benefit of building and other construction workers.

6. The Parliament also considered necessary to levy a cess on the cost of construction incurred by the employer on the building and other construction works for ensuring sufficient funds for the Welfare Board to undertake the social security schemes and welfare measures. The Parliament has, therefore, enacted the Building And Other Construction Workers' Welfare Cess Act, 1996 (in short, "the Cess Act"). Section 14 of this Act empowers the Central Government to make rules by notification in the Official Gazette for carrying out its pro