Liability for cess under the Cess Act cannot be assigned to a subsequent purchaser who does not qualify under the definitions of employer or establishment within the applicable construction acts.

JUDGMENT

Ramachandra Menon, J.

There is a common issue involved in both these appeals, though arising in respect of different cause of action and hence they are heard together. The basic issue is whether the amount due under Section 3 of the Building and Other Construction Workers Welfare Cess Act , 1996 ('Cess Act' in short) can be collected from the subsequent purchaser of a building, giving an extended definition to the term ‘employer’ (as defined under the relevant statute), who is liable to effect the contribution under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act ?

2. Coming to W.A.No.1802/2009 which has been preferred by the State/Department, challenge is against the verdict dated 9.6.2008 passed by the learned Single Judge, virtually allowing the writ petition and setting aside the relevant orders/demand notices, which were under challenge; holding that the liability cannot be shifted to the shoulders of the subsequent purchaser of the building who had actually not engaged any worker to effect the construction. The factual position revealed is that, an extent of nearly 28 cents and a building situated therein was purchased by the writ petitioner for a total sale consideration of ₹3,25,000/- as revealed from Ext.P1 sale deed dated 30th of March, 2000. When the writ petitioner was enjoying the property as above, Ext.P2 assessment order dated 18.12.2003 came to be served upon the writ petitioner fixing the liability of a sum of ₹37,800/- as the 'cess' payable under the Building and Other Construction Workers Welfare Cess Act , 1996 and raising a demand to satisfy the same with interest. On receipt of the same, Ext.P3 explanation dated 1.1.2004 was submitted by the writ petitioner, pointing out that she had not effected any construction in the property and had never employed any worker to have been assessed under the relevant provisions of the said Act. It was also brought to the notice of the concerned authority that she had in fact, purchased the property 'along with the building' which was a running establishment in the name and style as 'Enkeys Tourist Home'; in turn seeking to drop all further proceedings. This however did not yield any positive result and the Departmental authorities issued Ext.P4, alerting the writ petitioner to satisfy the due amount; failing which further steps would be pursued for realisation of the same. This made the owner of the building to approach this Court by filing W.P.(C)

No.21257/2004 challenging Exts.P2 and P4.

3. A detailed counter affidavit has been filed by the 2nd respondent referring to the relevant provisions of law and the circumstances under which the proceedings came to be finalised. It is stated that, notice of assessment was issued to the party concerned, which however came to be returned as 'unclaimed'. After several postings, the matter came to be finalised and an order was passed on 19.9.2003; followed by a demand notice. Despite serving the final assessment order, the amount was not satisfied; under which circumstance, another notice dated 18.12.2003 was served upon the writ petitioner. Admittedly, the amount was not satisfied and it was sought to be challenged before this Court by filing the Writ Petition. After hearing both the sides, a learned Judge of this Court, as per judgment dated 9.6.2008, intercepted the proceedings; holding that the subsequent purchaser of the building cannot be treated as the 'employer', as defined under the Act and hence that, no liability could be shifted to the shoulders of the subsequent purchaser. It was accordingly, that Exts.P2 and P4 were quashed, thus allowing the Writ Petition, which in turn is under challenge in this appeal.

4. The learned Government Pleader submits that, by virtue of the relevant provisions of law, the finding and reasoning given by the learned Single Judge are liable to be interfered. It is pointed out that, a contrary view, which is the correct view based on t