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Labour Cess Paid to Municipality Cannot Discharge :
The has ruled that a deposit of labour cess made with a municipal authority, instead of the prescribed competent authority under the , does not amount to a valid . The Division Bench comprising Justices Arun Monga and Ashutosh Kumar at the dismissed the writ petition filed by , Udaipurwati, challenging initiated by the .
Hospital's Deposit Fails to Halt Cess Recovery
The dispute arose after the hospital constructed its premises and deposited Rs.45,000 towards labour cess with , in . Subsequently, the , passed an on , determining the cess payable along with interest and penalty. culminated in a notice dated , under the seeking Rs.3,42,680. The hospital argued that it had deposited an additional Rs.67,724 towards the assessed cess and that the earlier payment of Rs.45,000 was not credited while computing interest and penalty.
The State opposed the plea, contending that the initial deposit with the municipal body was not with the authority prescribed under the Act and Rules—namely, the . Therefore, the remained undischarged until the amount reached the competent authority.
Statutory Scheme Leaves No Room for Wrong Deposits
The Court observed that the and the Rules of 1998 create a . The cess must be assessed and deposited with the specified authority, and a deposit with a “stranger” to that scheme cannot be treated as compliance.
“A deposit made with it [Nagar Palika Mandal], howsoever , does not amount to discharge of the . The amount never reached the coffers of the within the time prescribed. The mistake of depositing the amount before a wrong authority, therefore, confers no immunity upon the petitioner.”
The Bench further noted that the hospital had already taken steps to have the amount transferred from the municipality to the Labour Welfare Officer via a demand draft. This, however, did not retroactively cure the default, as the amount was not deposited with the correct authority within the prescribed period.
Alternate Remedy Available; Court Refuses to Interfere
The Court highlighted that against the dated , the statute provides an of appeal under . The hospital had not exhausted this remedy. The questions raised—whether the earlier deposit can be adjusted and from what date interest and penalty are leviable—require appreciation of evidence and are best suited for the appellate authority.
“Where the statute provides a complete machinery for redressal of grievances, the under ought not ordinarily to be invoked in supersession thereof.”
The Court found no or violation of to warrant interference. Accordingly, the writ petition was disposed of with liberty to the petitioner to seek a of any amount still lying with the Nagar Palika Mandal in accordance with law. The hospital is also at liberty to file a against the , and all contentions regarding adjustment of amounts already deposited shall remain open before the appellate authority.
Implications for Similar Cases
The ruling underscores the importance of strict compliance with statutory procedures when discharging cess liability under the . Entities cannot claim benefit of payments made to unauthorized bodies, even if . The proper recourse is either to seek from the wrong authority or to pursue the mechanism provided under the Act.
