IMPORTANT POINT
There can be no estoppel against statute.
Even if a construction work covered by the Act commenced before coming into operation of the Act, cess will be leviable on all ongoing works.
Collection of cess cannot be kept in abeyance till such time that all workers bare registered.

JUDGMENT

SHIVA KIRTI SINGH, J.

1. The questions of law in these appeals are same and arise out of similar factual matrix. Hence, they have been heard together and shall be governed by this common judgment.

2. The appellants are engaged in the business of construction of buildings etc. In the present matters their grievance is against demand of cess under The Building and Other Construction Workers’ Welfare Cess Act, 1996 (Act 28/96) (hereinafter referred to as ‘the Cess Act’) in the following factual premise. Their agreements or contracts for construction of projects belonging to departments and instrumentalities of Government of Madhya Pradesh were finalized and work orders were issued to contractors (the appellants) between December 2002 to March 2003. Since the Madhya Pradesh Building and Other Construction Workers’ Welfare Board (hereinafter referred to as ‘the Board’) came to be constituted only on 9.4.2003 followed by gazette publication on 10.4.2003, there could be no provision in the contracts as to who shall bear the burden of paying cess under the Cess Act. On that as well as several other grounds the appellants, being aggrieved with the demand of cess made upon them, challenged such demand by preferring writ petitions which have been dismissed by the impugned common judgment dated 21.6.2004 of the Division Bench following an earlier judgment dated 17.3.2004 in LPA no. 169 of 2003.

3. The impugned judgment exhibits more than one ground to assail the demand of cess but before us the appellants have given up the other grounds and have confined their challenge on the ground that the Assistant Labour Commissioner (ALC) in his letter to the Chief Engineer of the concerned project at Jabalpur had communicated that cess is to be recovered w.e.f. 1.4.2003. He also reminded the Chief Engineer that it was expected of him that he will “definitely stipulate the condition of payment of 1% cess in each tender with effect from above date.” On the basis of above, the submission on behalf of appellants is that no cess could be levied for the tenders, contracts and work orders for construction that came into existence before the Board was constituted on 9/10.4.2003. As per submissions of Mr. Sunil Gupta, learned Senior Advocate for the appellants, the cost of construction triggers the charging of cess under Section 3 of the Cess Act. Such cost stands ascertained and determined when contract is executed and work order issued. This cost cannot be split up into two components, one for the pre-Board and the other for the later period for levying cess on the cost incurred in the latter period only.

4. It is also the case of the appellants that if demand of cess is made on construction works undertaken or even contemplated on account of issue of work order before the constitution of the Board, then such demand would amount to making the Cess Act operate retrospectively and that would be unwarranted, illegal and unjust.

5. In view of such limited issues, it is not necessary for us to consider at length the factual details. Only some relevant dates and facts have to be noted to support our reasons for not agreeing with the aforesaid contentions advanced on behalf of the appellants.

6. The Union of India was evidently concerned with the sad plight of construction workers belonging to unorganized sector. With a view to regulate employment and conditions of service of Building and other construction workers and to reduce their exploitation by providing for welfare measures related to their safety, health etc, the Central Government promulgated The Building and Other Construction Workers’ (Regulation of Employment and Conditions of Service) Ordinance 1995 on 3.11.1995. It was succeeded by other Ordinances bearing nos. 3/96, 15/96 and 25/96. The last Ordinance dated 20.6.1996 was followed by the Building and Other Construction Workers’ (Regulation of Employment and Conditions of Service) Act, 1996 (Act 27/96) (hereinafter referred to as ‘the BOCW