Case Note & Summary
The petitioner, R.N. Parameshwarappa, a Class-I Civil Contractor, filed a writ petition under Articles 226 and 227 of the Constitution of India seeking a direction to the respondents (State of Karnataka, Department of Water Resources, and others) not to deduct Labour Welfare Cess from his bills unless it was included in the estimate of the work or in the tender notification. He also sought a refund of the cess already collected as per Annexures-H, J and K. The petitioner had undertaken construction work for the respondents' departments. The respondents had collected the cess under the Building and Other Construction Workers' Welfare Cess Act, 1996. The petitioner contended that the cess was not part of the estimate or tender notification and thus could not be deducted. The court, after hearing the counsel for the petitioner and the respondents, held that the respondents could not deduct the cess unless it was included in the estimate or tender notification. The court directed the respondents not to deduct the cess unless so included and to refund the cess already collected as per the annexures. The writ petition was allowed accordingly.
Headnote
A) Labour Law - Building and Other Construction Workers' Welfare Cess Act, 1996 - Sections 3 and 4 - Levy and Collection of Cess - The petitioner, a Class-I Civil Contractor, challenged the deduction of Labour Welfare Cess from his bills by the respondents. The court held that the cess can only be deducted if it is included in the estimate of the work or in the tender notification. Since the respondents failed to show such inclusion, the deduction was illegal. The court directed the respondents not to deduct the cess unless included and to refund the cess already collected as per Annexures-H, J and K. (Paras 1-3)
Issue of Consideration
Whether the respondents can deduct Labour Welfare Cess from the petitioner's bills when it was not included in the estimate of the work or in the tender notification.
Final Decision
The writ petition is allowed. The respondents are directed not to deduct the Labour Welfare Cess from the bills of the petitioner unless it is included in the estimate of the work or in the tender notification. The respondents are further directed to refund the Labour Welfare Cess already collected from the bills of the petitioner as per Annexures-H, J and K.
Law Points
- Labour Welfare Cess cannot be deducted from contractor's bills unless it is included in the estimate of the work or in the tender notification
- Building and Other Construction Workers' Welfare Cess Act
- 1996
- Sections 3 and 4
Case Details
2019 LawText (KAR) (02) 24
Writ Petition No.33177/2013 (GM-RES)
N. Basavarajaiah (for petitioner), Niloufer Akbar (AGA for R1 & R2), M.R.C. Ravi (for R3)
State of Karnataka, Department of Water Resources; The Superintendent Engineer Incharge & Evaluation Department; The Executive Engineer, Karnataka Neeravari Nigama Ltd.
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Writ petition under Articles 226 and 227 of the Constitution of India challenging deduction of Labour Welfare Cess from contractor's bills.
Remedy Sought
Direction to respondents not to deduct Labour Welfare Cess unless included in estimate or tender notification, and refund of cess already collected.
Filing Reason
Respondents deducted Labour Welfare Cess from petitioner's bills under the Building and Other Construction Workers' Welfare Cess Act, 1996, which was not included in the estimate or tender notification.
Issues
Whether the respondents can deduct Labour Welfare Cess from the petitioner's bills when it was not included in the estimate of the work or in the tender notification.
Submissions/Arguments
Petitioner argued that the Labour Welfare Cess was not included in the estimate or tender notification and thus could not be deducted.
Respondents contended that the deduction was made as per the provisions of the Building and Other Construction Workers' Welfare Cess Act, 1996.
Ratio Decidendi
Labour Welfare Cess under the Building and Other Construction Workers' Welfare Cess Act, 1996 cannot be deducted from a contractor's bills unless it is included in the estimate of the work or in the tender notification. Any deduction made without such inclusion is illegal and must be refunded.
Judgment Excerpts
In this writ petition, the petitioner is seeking for a direction to the respondents not to deduct the Labour Welfare Cess from the bills of the petitioner unless it is included in the estimate of the work or in the tender notification and further to direct the respondents to refund the Labour Welfare Cess which is already collected from the bills of the petitioner as per Annexures-H, J and K.
The petitioner is a Class-I Civil Contractor. He has undertaken construction work in respondent’s departments. As per the provisions of the Building and Other Construction Workers’ Welfare Cess Act, 1996 (for short “the Cess Act”), the respondents have collected the cess from the bills of the petitioner.
Procedural History
The petitioner filed a writ petition under Articles 226 and 227 of the Constitution of India before the High Court of Karnataka at Bengaluru. The petition came up for preliminary hearing in 'B' group on 21st February 2019, and the court made the order allowing the petition.
Acts & Sections
- Building and Other Construction Workers' Welfare Cess Act, 1996: Sections 3, 4
- Constitution of India: Articles 226, 227
