JAIN CONSTRUCTION COMP Vs. MORADABAD DEVELOPMENT AUTHORITY

JUDGEMENT

(1.) PETITIONER herein is a registered company. By means of this petition, it has mainly prayed for direction upon the respondents to release the residue payment of the petitioner out of contractual work without deducting 1% cess.

(2.) BRIEFLY stated facts according to the petitioner are that on 20th October, 2008 the petitioner entered into an agreement with the respondent-Moradabad Development Authority, Moradabad for construction of flats under Manyavar Kanshiram Awas Yojna within six months i.e. by 05th April, 2009. The petitioner's own case is that it had completed the aforesaid construction work by 20th October, 2009 and the same was verified by the respondent No. 2 i.e. Executive Engineer, Moradabad Development Authority, Moradabad. On 27th January, 2010 a circular was issued by the concerned Labour Commissioner for deduction of 1% cess from the payments of all the projects of building and other construction works under the Building and Other Construction Workers' Welfare Cess Act, 1996 (hereinafter in short called as the "Cess Act") and the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 (hereinafter in short called as the "Act, 1996"), both Central Acts, as well as the rules framed by the Government of Uttar Pradesh in exercise of powers conferred upon it by Section 62 read with Section 40 of the Act, 1996, being Uttar Pradesh Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Rules, 2009 (hereinafter in short called as the "Rules, 2009"). On 05th May, 2010 another circular was issued by the Engineer In-Chief (Development), Public Works Department, Lucknow to the effect that the provisions of compulsory deduction of 1% cess shall be applicable to the constructions, which are to be started from 01 st April, 2010. On 20th October, 2010 the respondent- Moradabad Development Authority issued an office order implementing the provisions of the said Acts and the Rules, 2009 directing for compulsory deduction of amount of cess. In such circumstances, on 04th October, 2010 the petitioner made a detailed representation to the respondent authority stating that deduction of 1% cess cannot be made from the residue payment due towards the petitioner as the petitioner has completed the construction on much prior date. However, since no heed has been paid to such representation, the petitioner was compelled to invoke the jurisdiction of this Court by means of this writ petition.

(3.) RULE 1 (iii) of the Rules, 2009 speaks that the rules shall come into force with effect from the date of their publication in the Gazette and we further find that the Gazette was published on 04th February, 2009 i.e. prior to any of the aforesaid dates towards completion of work by the petitioner. Rules, 2009 has adopted the Central Act of the year 1996 i.e. Act, 1996 about its applicability in the State of Uttar Pradesh. Therefore, it is declaratory in nature for operation in the State by the State authorities and when such rules say that the same will be applicable w.e.f. 04th February, 2009, by subsequent circular of the concerned Labour Commissioner and the Engineer In-Chief of the concerned department, the date of applicability of cess cannot be extended further. These circulars are informatory in nature. Claim of final bill or residue payment cannot arise prior to 04th February, 2009, therefore, there cannot have any dispute with regard to retrospective operation. Had it been the case of the petitioner that claim arose upon completion of work prior to 04th February, 2009, petitioner could have raised the point of retrospective operation but not against this factual background. Contract has its three facets i.e. execution of contract, performance of contract, and payments. Dispute is required to be considered either for three or for two or for one of such counts depending upon circumstances of each case. Here the dispute is with regard to payments. Therefore, under no circumstances, question of demand can arise before the date of 04th February, 2009 being the cut off date with regard to applicability of cess. Having so, we do not find any infirmity in connection with deduction of cess from the bill of the petitioner for the residue amount as claimed.