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MADHYA PRADESH HIGH COURT AT JABALBUR BENCH
Ajit Singh, R.S.Jha, JJ.
G.V.P.R.Engineers Ltd. - Appellant
Versus
State of M.P. and Others - Respondent
W. P. Nos. 7303, 15906 and 5173 of 2011, 3226, 9871 of 2010 with 2893 of 2012
Decided On : 03-05-2012
Cess - Construction Works - The Building And Other Construction Workers' (Regulation Of Employment And Conditions of Service) Act, 1996 - Section 18, The Building And Other Construction Workers' Welfare Cess Act, 1996 - Section 14, The Building And Other Construction Workers' Welfare Cess Rules, 1998 - Summary: The court addressed the issue of whether the respondent was entitled to deduct one per cent cess on the entire contract price or only in respect to a specific portion. The court held that the petitioners were liable to pay cess even for the supply portion, as the cost of construction cannot be divided into parts, and the cess is on the total cost of construction.
Fact of the Case:
The petitioners, companies registered under the Companies Act and contractors of electrical works, challenged the deduction of one per cent cess on the entire contract price by the respondent, a company controlled by the State Government, under The Building And Other Construction Workers' Welfare Cess Act, 1996.
Finding of the Court:
The court held that the petitioners were liable to pay cess even for the supply portion, as the cost of construction cannot be divided into parts, and the cess is on the total cost of construction.
Issues: The main issue was whether the respondent was entitled to deduct one per cent cess on the entire contract price or only in respect to a specific portion.
Ratio Decidendi: The court determined that the cost of construction cannot be divided into parts, and the cess is on the total cost of construction, holding the petitioners liable to pay cess even for the supply portion.
Final Decision: The petitions were dismissed with costs of Rs. 1,000/- to each petitioner.
Ajit Singh, J.: -
This order shall also govern the disposal of Writ Petition Nos. 3226/2010, 9871/2010, 5173/2011, 15906/2011 and 2893/2012. All these writ petitions involve a common issue and were heard together.
2. The petitioners are companies and registered under the Companies Act. They are contractors of electrical works. Respondent No. 3 is also a company registered under the Companies Act. It is wholly controlled by the State Government.
3. The Ministry of Power, Government of India, has launched Rajiv Gandhi Gramin Vidyutikaran Yojna (RGGVY) (in short, "the Scheme") for Rural Electricity Infrastructure and House Hold Electrification for the attainment of the National Common Minimum Programme Goal of providing access to electricity to all house holds. Respondent No. 3 has proposed for Rural Electricity Infrastructure and House Hold Electrification by construction of New 11 KV line, LT line, 25 and 16 KVA, 11/0.4 KV Distribution transformer S/Ss and Extension of Service Lines including house wiring for Below Poverty Line (BPL) house holds under the Scheme. And to execute this work, respondent No. 3 has awarded contracts to the petitioners 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.
4. The relevant Clause 6.2 of the contract, which deals with the contract price, reads as under :
"6.2 CONTRACT PRICE
(i) For supply portion
The total Contract Price inclusive of all taxes and duties for the entire scope of work of supply portion under the Contract shall be f 55,47,09,386.98/- (In words f Fifty Five crores Forty Seven lakhs Nine thousands Three hundreds Eighty Six and paisa Ninety Eight only)
Detailed break-up of the Contract Price for entire supply portion of New 11KV line, LT line, 25 and 16 KVA, 11/0.4 KV Distribution Transformer S/Ss and Extension of Service Lines including house wiring for BPL house holds are given in Schedule-1 (including schedule-1.1, 1.2, 1.3, 1.4, 1.5, 1.6, 1.7, 1.8 and 1.9) enclosed with this award. The schedule for FP (Four Pole) structure, protective guarding for 11KV line and fixing of 11KV AB switch on Tapping DP are attached as schedule 1.7, 1.8 and 1.9 for utilizing the schedule, if required. However, the costs of these schedules are not included in the contract price of this package.
(ii) For erection portion
The total Contract Price inclusive of all Insurance and all applicable for the entire scope of work of erection portion under the Contract shall be ?4,20,76,732.6I/- (In words ?Four Crores Twenty lakhs Seventy Six thousands Seven hundreds Thirty Two and paisa Sixty One only)
Detailed break-up of the Contract Price for entire erection portion of New 11KV line, LT line, 25 and 16 KVA, 11/0.4 KV Distribution Transformer S/Ss and Extension of Service Lines including house wiring for BPL house holds are given in Sehedule-2 (including schedule-2.1, 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.8 and 2,9) enclosed with this award. The schedule for FP (Four Pole) structure, protective guarding for 11KV line and fixing of 11 KV AB switch on Tapping DP are attached as schedule 2.7, 2.8 and 2.9 for utilizing the schedule, if required. However, the costs of these schedules are not included in the contract price of this package.
(iii) Total Contract Price
The total Contract Price inclusive of all taxes and duties for the entire scope of work (supply + erection portion) under the Contract shall be f 59, 67, 86,119.59/- (In words f Fifty Nine Crores Sixty Seven lakhs Eighty Six thousands One hundreds Nineteen and paisa Fifty Nine 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 co
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