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Building and Other Construction Workers Welfare Cess Act, 1996

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S.1 Short title, extent and commencement.

(1) This Act may be called the Building and Other Construction Workers Welfare Cess Act, 1996.

(2) It extends to the whole of India.
(3) It shall be deemed to have come into force on the 3rd day of November, 1995.


Legal Commentary on Section 1 of the Building and Other Construction Workers Welfare Cess Act, 1996

Introduction

Section 1 of the Building and Other Construction Workers Welfare Cess Act, 1996, primarily lays down the preliminary provisions including the short title, extent, and commencement of the Act. It sets the foundation for the levy of cess aimed at augmenting welfare resources for construction workers. The Act aims to regulate the welfare of building and other construction workers through a statutory cess, which is a fee levied on the cost of construction projects.

What does Section 1 Say

  • Section 1(1): Provides the short title of the Act as "Building and Other Construction Workers Welfare Cess Act, 1996."
  • Section 1(2): States that the Act extends to the whole of India.
  • Section 1(3): Specifies the commencement date of the Act, which is the date of its publication or as notified.
  • Section 1(4): Clarifies that the Act shall come into force on such date as the Central Government may, by notification, appoint.

Essential Ingredients

  • Title and Citation: The Act is named as above.
  • Extent: Geographical applicability across India.
  • Commencement: Date from which the Act becomes operational, as notified.
  • Notification Power: The Central Government’s authority to specify the date of enforcement.

Scope of Section 1

  • Establishes the legal basis for the Act's applicability nationwide.
  • Defines the legal commencement, which can be notified later.
  • Provides the authority to the Central Government to notify the date of enforcement.
  • Sets the stage for subsequent provisions related to levy, collection, and utilization of cess for welfare schemes.

Punishment for Section

  • Section 1 itself does not prescribe any punishment. It is a framing section that sets the legal framework.
  • Punishments for violations related to the levy or collection of cess are addressed in subsequent sections (e.g., Sections 9 and 11).

Legal Comments

In summary, Section 1 of the Building and Other Construction Workers Welfare Cess Act, 1996, is a foundational provision that authorizes the government to notify the date of enforcement, thereby enabling the levy of cess across India to fund welfare schemes for construction workers. It emphasizes the importance of notifications, broad applicability, and the legislative intent to promote social security in the construction sector. The section does not prescribe penalties but provides the legal basis for subsequent rules, notifications, and enforcement actions.

S.12 Penalty.

(1) Whoever, being under an obligation to furnish a return under this Act, furnishes any return knowing, or having reason to believe, the same to be false shall be punishable with imprisonment which may extend to six months, or with fine which may extend to one thousand rupees, or with both.

(2) Whoever, being liable to pay cess under this Act, wilfully or intentionally evades or attempts to evade the payment of such cess shall be punishable with imprisonment which may extend to six months, or with fine, or with both.
(3) No court shall take cognizance of an offence punishable under this section save on a complaint made by or under the authority of the Central Government.


Legal Commentary on Section 12 of the Building and Other Construction Workers Welfare Cess Act, 1996

Introduction

Section 12 of the Building and Other Construction Workers Welfare Cess Act, 1996, primarily deals with penalties and offences related to the failure to comply with statutory obligations under the Act, including furnishing false returns or evading cess payments. This section aims to enforce compliance and penalize violations to ensure effective collection and utilization of cess for the welfare of construction workers.

What does Section 12 Say

Section 12 prescribes penalties for:- Furnishing false or incorrect returns or information under the Act.- Willful or attempted evasion of cess payment.- Penalties include imprisonment for a term which may extend to six months, or fine, or both. In case of continuing default, an additional fine per day may be imposed.

Essential Ingredients

  • The obligation to furnish accurate returns or information.
  • Knowledge or reason to believe that the return or information is false.
  • Willful or intentional evasion or attempt to evade cess.
  • The penalty provisions: imprisonment, fine, or both, including the possibility of a daily fine in case of continued default.

Scope of Section 12

  • Applies to employers, contractors, or any liable persons under the Act who fail to furnish returns or provide false information.
  • Encompasses deliberate evasion of cess payments.
  • Covers cases of non-compliance with statutory duties related to cess collection.
  • The section ensures enforcement by penal sanctions to promote compliance and effective collection of cess.

Punishment for Section 12

  • Imprisonment for up to six months.
  • Fine, the amount of which is not specified in detail but can be substantial.
  • In case of continued default, a fine for each day of default may be imposed.

Legal Comments

S.2 Definitions.

In this Act, unless the context otherwise requires,--

(a) "Board" means a Building and Other Construction Workers' Welfare Board constituted by a State Government under sub-section (1) of section 18 of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 (27 of 1996);
(b) "Fund" means the Building and Other Construction Workers' Welfare Fund constituted by a Board;
(c) "prescribed" means prescribed by rules made under this Act;
(d) words and expressions used herein but not defined and defined in the

Legal Commentary on Section 2 of the Building and Other Construction Workers Welfare Cess Act, 1996

Introduction

Section 2 of the Building and Other Construction Workers Welfare Cess Act, 1996, lays down the definitions crucial for interpreting the scope and application of the Act. It clarifies key terms such as "building or other construction work," "employer," "contractor," and "establishment," which are fundamental for understanding the levy, collection, and applicability of the cess mandated under the Act. This section ensures clarity in legal interpretation and aids in delineating the boundaries of the legislation’s coverage.

What does Section 2 Say

Section 2 provides definitions for various terms used in the Act:- "Building or other construction work": Encompasses construction, alteration, repair, maintenance, or demolition related to buildings, infrastructure, and other specified works, explicitly excluding work covered under the Factories Act, 1948, or Mines Act, 1952.- "Employer": Means the owner of the establishment or, in relation to construction carried out through contractors, the contractor.- "Contractor": A person undertaking to produce a result for an establishment or supplying building workers for any work.- "Establishment": Any entity employing building workers in construction work, including those belonging to or controlled by the government, private firms, etc., but excluding individual owners employing workers for their own residence if the total construction cost is below Rs. 10 lakhs.

Essential Ingredients

  • Clear delineation of what constitutes "building or other construction work."
  • Identification of "employer" and "contractor" as liable entities.
  • Specific exclusions based on the applicability of the Factories Act or Mines Act.
  • The scope of "establishment" as a liable unit.
  • The threshold limit of Rs. 10 lakhs for private residential buildings to be excluded.
  • The importance of the notification process by the government for expanding the definition.

Scope of Section

  • Defines the scope of activities covered under the Act, primarily construction, repair, maintenance, or demolition of buildings and infrastructure.
  • Clarifies that work covered by the Factories Act, 1948, or Mines Act, 1952, is excluded, thus limiting the Act’s applicability.
  • Identifies liable entities: owners, contractors, and establishments.
  • Sets the boundaries for the types of construction activities that attract the cess.
  • Ensures that the legislation targets unorganized and vulnerable construction workers by defining the scope narrowly.

Punishment for Violations

While Section 2 itself does not prescribe punishment, the Act as a whole (notably Sections 2 and 18) stipulates that wilful evasion or attempt to evade payment of cess can attract penalties, including fines or imprisonment, under Section 18. The detailed penalties are specified in other provisions, ensuring compliance and enforcement.

Legal Comments (Summary with References)

In summary, Section 2 of the Building and Other Construction Workers Welfare Cess Act, 1996, provides precise, purposive, and flexible definitions that delineate the scope of activities covered, establish liability, and respect legislative boundaries, all aimed at ensuring effective resource mobilization for the welfare of construction workers, especially in large-scale infrastructural projects.

S.11 Appeals.

(1) Any employer aggrieved by an order of assessment made under section 5 or by an order imposing penalty made under section 9 may, within such time as may be prescribed, appeal to such appellate authority in such form and in such manner as may be prescribed.

(2) Every appeal preferred under sub-section (1) shall be accompanied by such fees as may be prescribed.
(3) After the receipt of any appeal under sub-section (1), the appellate authority shall, after giving the appellant an opportunity of being heard in the matter, dispose of the appeal as expeditiously as possible.
(4) Every order passed in appeal under this section shall be final and shall not be called in question in any court of law.


Legal Commentary on Section 11 of the Building and Other Construction Workers Welfare Cess Act, 1996

Introduction

Section 11 of the Building and Other Construction Workers Welfare Cess Act, 1996, provides the statutory mechanism for employers or aggrieved persons to challenge assessment orders, penalties, or other decisions related to cess collection through an appellate process. It aims to ensure fair adjudication and safeguard the rights of employers while maintaining the welfare objectives of the legislation.

What does Section 11 Say

Section 11 establishes the right of an employer or aggrieved party to appeal against assessment orders or penalties issued under the Act. It prescribes:- The timeframe for filing appeals (generally within three months).- The requirement to deposit the amount of cess or penalty before filing the appeal (Rule 14(2)(b)).- The procedure for submitting the appeal, including necessary documents.- The appellate authority’s powers to confirm, modify, or remand the assessment.- The finality of the appellate order unless further legal recourse is pursued.

Essential Ingredients

  • Appealable Orders: Orders of assessment (Section 5), penalty imposition (Section 9), or related decisions.
  • Time Limit: Typically three months from the date of the order.
  • Pre-deposit Requirement: The appellant must deposit the cess or penalty amount before filing the appeal (Rule 14(2)(b)).
  • Submission of Documents: Appeal must be accompanied by the original order, deposit certificate, and other relevant documents.
  • Appellate Authority’s Powers: Confirm, reduce, enhance, or remand the assessment.
  • Finality and Further Remedies: The appellate order is binding; further appeals can be made under the law.

Scope of Section 11

  • Applicability: To all assessment orders, penalties, or related decisions under the Act.
  • Parties: Employers, contractors, or any person aggrieved by assessment or penalties.
  • Procedure: Provides a detailed process for filing, hearing, and disposing of appeals.
  • Limitations: Cannot be invoked to challenge the legality of the Act itself; only the assessment or penalty decisions.
  • Relation with Rules: The Rules (notably Rule 14) specify the procedural details, including deposit and documentation.

Punishment for Non-compliance

  • Failure to Deposit: The appeal may not be entertained if the appellant fails to deposit the amount as required.
  • Contempt Proceedings: Non-compliance with appellate orders or directions may lead to contempt proceedings under the Contempt of Courts Act, 1971.
  • Penalty and Recovery: The law provides for recovery of dues as arrears of land revenue if not paid.

Legal Comments (Summary with References)

Conclusion

Section 11 of the Building and Other Construction Workers Welfare Cess Act, 1996, provides a well-defined, procedural appellate mechanism to challenge assessment orders and penalties. The law emphasizes timely filing, pre-deposit of dues, and proper documentation. Courts have consistently upheld these provisions as within the legislative competence, serving the dual purpose of safeguarding the rights of employers and ensuring the effective utilization of funds for the welfare of construction workers. The appellate process under Section 11 is integral to the statutory scheme, and its proper enforcement ensures transparency, accountability, and fairness in cess collection and adjudication.

Note: All references are based on the provided sources and judicial pronouncements as per the latest jurisprudence.

S.3 Levy and collection of cess.

(1) There shall be levied and collected a cess for the purposes of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 (27 of 1996), at such rate not exceeding two per cent. but not less than one per cent. of the cost of construction incurred by an employer, as the Central Government may, by notification in the Official Gazette, from time to time specify.

(2) The cess levied under sub-section (1) shall be collected from every employer in such manner and at such time, including deduction at source in relation to a building or other construction work of a Government or of a public sector undertaking or advance collection through a local authority where an approval of such building or other construction work by such local authority is required, as may be prescribed.
(3) T

S.4 Furnishing of returns.

(1) Every employer shall furnish such return to such officer or authority, in such manner and at such time as may be prescribed.

(2) If any person carrying on the building or other construction work, liable to pay the cess under section 3, failsto furnish any return under sub-section (1), the officer or the authority shall give a notice requiring such person to furnish such return before such date as may be specified in the notice.


S.5 Assessment of cess.

(1) The officer or authority to whom or to which the return has been furnished under section 4 shall, after making or causing to be made such inquiry as he or it thinks fit and after satisfying himself or itself that the particulars stated in the return are correct, by order, assess the amount of cess payable by the employer.

(2) If the return has not been furnished to the officer or authority under sub-section (2) of section 4, he or it shall, after making or causing to be made such inquiry as he or it thinks fit, by order, assess the amount of cess payable by the employer.
(3) An order of assessment made under sub-section (1) or sub-section (2) shall specify the date within which the cess shall be paid by the employer.


S.6 Power to exempt.

Notwithstanding anything contained in this Act, the Central Government may, by notification in the Official Gazette, exempt any employer or class of employers in a State from the payment of cess payable under this Act where such cess is already levied and payable under any corresponding law in force in that State.



S.7 Power of entry.

Any officer or authority of the State Government specially empowered in this behalf by that Government may--

(a) with such assistance, if any, as he or it may think fit, enter at any reasonable time any place where he or it considers it necessary to enter for carrying out the purposes of this Act including verification of the correctness of any particulars furnished by any employer under section 4;
(b) do within such place anything necessary for the proper discharge of his or its duties under this Act; and
(c) exercise such other powers as may be prescribed.


S.8 Interest payable on delay in payment of cess.

If any employer fails to pay any amount of cess payable under section 3 within the time specified in the order of assessment, such employer shall be liable to pay interest on the amount to be paid at the rate of two per cent. for every month or part of a month comprised in the period from the date on which such payment is due till such amount is actually paid.



S.9 Penalty for non-payment of cess within the specified time.

If any amount of cess payable by any employer under section 3 is not paid within the date specified in the order of assessment made under section 5, it shall be deemed to be in arrears and the authority prescribed in this behalf may, after making such inquiry as it deems fit, impose on such employer a penalty not exceeding the amount of cess:

Provided that, before imposing any such penalty, such employer shall be given a reasonable opportunity of being heard and if after such hearing the said authority is satisfied that the default was for any good and sufficient reason, no penalty shall be imposed under this section.


S.10 Recovery of amount due under the Act.

Any amount due under this Act (including any interest or penalty) from an employer may be recovered in the same manner as an arrear of land revenue.



S.13 Offences by companies.

(1) Where an offence under this Act has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed with the consent or connivance of, or is attributable to any neglect

S.14 Power to make rules.

(1) The Central Government may, by notification in the Official Gazette, make rules for carrying out the provisions of this Act.

(2) Without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:--
(a) the manner in which and the time within which the cess shall be collected under sub-section (2) of section 3;
(b) the rate or rates of advance cess leviable under sub-section (4) of section 3;
(c) the particulars of the returns to be furnished, the officer or authority to whom or to which such returns shall be furnish

S.15 Repeal and saving.

(1) The Building and Other Construction Workers' Welfare Cess Third Ordinance, 1996 (Ord. 26 of 1996), is hereby repealed.

(2) Notwithstanding such repeal, anything done or any action taken under the said Ordinance shall be deemed to have been done or taken under the corresponding provisions of this Act.


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