Judgment R. Banumathi, J. Challenging the vires of Section 3(1) of the Building and Other Construction Workers Welfare Cess Act, 1996 and also challenging the vires of Rule 3 of the Building and Other Construction Workers Welfare Cess Rules, 1998 and praying for other reliefs, the petitioner has filed this writ petition. 2. The petitioner is a consortium comprising of M/s. Abhijeet Infrastructure Limited and M/s. Corporate Ispat Alloys Limited with M/s. Abhijeet Infrastructure Limited as its lead member. The petitioner is the agreement holder for construction, operation, maintenance and transfer of NH 33. The concessional agreement was entered into between the petitioner as the concessionaire and National Highway Authority of India for four laning of Barhi-Hazaribagh Section from km 0.00 to 40.500 of NH – 33 in the State of Jharkhand on „Design, Built, Finance, Operate and Transfer (DBFOT) Toll basis under NHDP Phase III Project. For carrying out the aforesaid construction of four laning of Barhi-Hazaribagh Section of NH – 33 from km 0.00 to km 40.500, the petitioner has appointed EPC Contractors/Sub-Contractors, namely, (i) Abhijeet Projects Limited – the Contractor, (ii) Shakambari Niketan Pvt. Ltd. and (iii) Yash Builders Pvt. Ltd. – Sub-Contractors. 3. The case of the petitioner is that the aforesaid construction of four laning of Barhi-Hazaribagh Section of NH – 33 from km 0.00 to km 40.500, the labour component involved in EPC Contractor/Sub-Contractors is very small, that is about 15-20% of the total cost incurred by them. While so, the National Highways Authority of India issued a letter dated 9.6.2012 to the petitioner-company enclosing a letter of Audit Officer, Government Audit Team, National Highways Authority of India, New Delhi, by which it was, interalia, decided for making deduction at source at the rate of 1% of the cost of construction incurred by the petitioner-company. 4. While so, the National Highways Authority of India issued a letter dated 9.6.2012 to the petitioner-company enclosing a letter of Audit Officer, Government Audit Team, National Highways Authority of India, New Delhi, by which it was, interalia, decided for making deduction at source at the rate of 1% of the cost of construction incurred by the petitioner-company. 4. Being aggrieved by such notice issued for making deduction at source at the rate of 1% of the cost incurred by the petitioner-company, the petitioner has filed this writ petition (i) challenging the vires of Section 3(1) of the Building and Other Construction Workers Welfare Cess Act, 1996 (BOCWW Cess Act), enacted by the Parliament being beyond the legislative competence of the Parliament as it seeks to levy and collect cess on the “cost of construction” incurred by an employer without defining the term, “cost of construction”; (ii) seeking for a declaration that Rule 3 of the Building and Other Construction Workers Welfare Cess Rules, 1998 (BOCWW Cess Rules), is ultra vires the parent Act and Article 246 of the Constitution of India; (iii) seeking for a direction that the levy and collection of cess (fee) at the rate not exceeding 2% but not less than 1% of the cost of construction instead of only on the labour component involved in the cost of construction, is arbitrary, unreasonable and confiscatory, since the element of labour cost is only about 10-15% of the total cost of construction; (iv) for quashing the Notification No. S.O. 2899 dated 26.9.1996 issued by the Central Government by which cess at the rate of 1% of the cost of construction incurred by an employer is to be levied and (v) for restraining the National Highways Authority of India from making deduction at source at the rate of 1% of the cost of construction incurred by the petitioner-company from the petitioner-company, for which letter dated 9.6.2012 has been issued by them to the petitioner-company. 5. Resisting the writ petition, the State of Jharkhand filed counter-affidavit contending that the BOCWW Cess Act well within the legislative competence of the Parliament and cess is levied at the rate of 1% of the cost of construction as a welfare measure for the workers as the said enactment has been intended to provide health and welfare measures for the workers engaged in building and other construction works. 6. 6. Union of India has filed its counter-affidavit contending that the Parliament is competent to enact the legislation with respect to the subject-matter and that the cess levied under the provisions of the BOCWW Cess Act is a levy covered under Entry 97 of List – I, Union List, read with Entry at serial 23 and 24 of List III in Schedule VII. The actual levy does not exceed 1% notified by the Central Government on actual cost of construction and the actual cost of construction in Section 3 is very clear and Rule 3 of the BOCWW Cess Rules clarifies the parameters to determine the cost of construction and computation of cost of construction is rational and not arbitrary. 7. We have heard Mr. Binod Poddar, learned Senior Counsel appearing for the petitioner and Mr. Prabhash Kumar along with Mr. Vishal Kumar Rai, learned counsel appearing for the Union of India. We have also heard Mr. A. Allam along with Mr. Fahad Allam, learned Sr.S.C II appearing for the State of Jharkhand. 8. Scheme of BOCWW Cess Act, 1996 The long preamble of BOCWW Cess Act, 1996 is indicative of its purpose that the Act is intended to provide for the levy and collection of a cess on the cost of construction incurred by employers with a view to augmenting the resources of the Building and Other Construction Workers Welfare Boards constituted under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 BOCW (Regulation of Employment and Conditions of Service) Act. 9. Section 2(d) of the BOCWW Cess Act adopts all the definitions contained in BOCW (Regulation of Employment and Conditions of Service) Act. Section 2(d) of the BOCWW Cess Act reads as under:- “2(d) words and expressions used herein but not defined and defined in the Building and Other Construction Workers (Regulation of Employment and Conditions of Service)Act, 1996, shall have the meaning respectively assigned to them in that Act.” 10. Some of the definitions of the BOCW (Regulation of Employment and Conditions of Service) Act are relevant to be noted. Some of the definitions of the BOCW (Regulation of Employment and Conditions of Service) Act are relevant to be noted. Section 2(1)(d) of the BOCW(Regulation of Employment and Conditions of Service) Act defines building, which reads as under:- “2(1)(d) “ building or other construction work" means the construction, alteration, repairs, maintenance or demolition, of or, in relation to, buildings, streets, roads, railways, tramways, airfields, irrigation, drainage, embankment and navigation works, flood control works (including storm water drainage works), generation, transmission and distribution of power, water works (including channels for distribution of water), oil and gas installations, electric lines, wireless, radio; television, telephone, telegraph and overseas communications, dams, canals, reservoirs, watercourses, tunnels, bridges, viaducts, aquaducts, pipelines, towers, cooling towers, transmission towers and such other work as may be specified in this behalf by the appropriate Government, by notification but does not include any building or other construction work to which the provisions of the Factories Act, 1948 (63 of 1948), or the Mines Act, 1952 (35 of 1952), apply;” 11. Section 2(1)(j) of the BOCW(Regulation of Employment and Conditions of Service) Act defines establishment as under:- “2(1)(j) “establishment” means any establishment belonging to, or under the control of, Government, any body corporate or firm, an individual or association or other body of individuals which or who employs building workers in any building or other construction work; and includes an establishment belonging to a contractor, but does not include an individual who employs such workers in any building or construction work in relation to his own residence the total cost of such construction not being more than rupees ten lakhs;” 12. Chapter V of the BOCW (Regulation of Employment and Conditions of Service) Act provides for constitution and functioning of the Building and other construction Workers Welfare Boards. Section 24 of the BOCW (Regulation of Employment and Conditions of Service) Act provides for constitution of Building and Other Construction Workers Welfare Fund and its application. Chapter V of the BOCW (Regulation of Employment and Conditions of Service) Act provides for constitution and functioning of the Building and other construction Workers Welfare Boards. Section 24 of the BOCW (Regulation of Employment and Conditions of Service) Act provides for constitution of Building and Other Construction Workers Welfare Fund and its application. Chapter IX of the BOCW(Regulation of Employment and Conditions of Service) Act makes special provisions regarding responsibility of employers (Section 44); responsibility for payment of wages and compensation (Section 45); and the notice of commencement of building or other construction work (Section 46), which obligates the employer to send written notice to inspector having jurisdiction in the area where proposed building or other construction work is to be executed at least thirty days before the commencement of any building or other construction work information, particulars of which find mention under Section 46. Section 62 of the BOCW (Regulation of Employment and Conditions of Service) Act empowers the State Government to frame rules for carrying out the provisions of the Act, after consultation with the expert committee. 13. Simultaneously with the enactment of the BOCW (Regulation of Employment and Conditions of Service) Act in 1996, the Parliament enacted the BOCWW Cess Act. As per the preamble of the BOCWW Cess Act, the Act is to provide for the levy and collection of a cess on the cost of construction incurred by employers with a view to augmenting the resources of the Building and Other Construction Workers Welfare Boards. Section 2(a) of the BOCWW Cess Act defines the term “Board” to mean the Board constituted by the State Government under sub-section (1) of Section 18 of the BOCW (Regulation of Employment and Conditions of Service) Act. 14. Section 3 of the BOCWW Cess Act, the charging Section, reads as under:- “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, 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. 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) The proceeds of the cess collected under sub-section (2) shall be paid by the local authority or the State Government collecting the cess to the Board after deducting the cost of collection of such cess not exceeding one per cent. of the amount collected. (4) Notwithstanding anything contained in sub-section (1) or sub-section (2), the cess leviable under this Act including payment of such cess in advance may, subject to final assessment to be made, be collected at a uniform rate or rates as may be prescribed on the basis of the quantum of the building or other construction work involved.” 15. Section 4 of the BOCWW Cess Act requires “every employer” to file returns in the manner prescribed. Section 5 spells out the process for the assessment of the cess payable, while Section 8 provides for interest payable in the event of a delayed payment of cess. Section 9 stipulates penalty for non-payment of the cess within the specified time. There is an internal mechanism of appeal under Section 11 for an employer who is aggrieved by the assessment order made under Section 5. 16. In exercise of the power conferred under Section 14 of the BOCWW Cess Act, the Central Government framed the BOCWW Cess Rules. Rule 3 thereof defines the “cost of construction” for the purpose of levy of cess as under:- “3. 16. In exercise of the power conferred under Section 14 of the BOCWW Cess Act, the Central Government framed the BOCWW Cess Rules. Rule 3 thereof defines the “cost of construction” for the purpose of levy of cess as under:- “3. Levy of cess.- For the purpose of levy of cess under sub-section (1) of section 3 of the Act, cost of construction shall include all expenditure incurred by an employer in connection with the building or other construction work but shall not include – - cost of land; - any compensation paid or payable to a worker or his kin under the Workmen’s Compensation Act, 1923.” Rule 4 of the BOCWW Cess Rules makes it mandatory for deduction of cess payable at the notified rates from the bills paid for the building and other construction work of a government or a public sector undertaking. Rule 5 prescribes the manner in which the proceeds of cess collected under Rule 4 shall be transferred by such government office, public sector undertaking, local authority, or Cess Collector, to the Board. The powers of the assessing officer and the mode of Assessment are enumerated in Rules 7 to 14 of the BOCWW Cess Rules. 17. Section 3 of the BOCWW Cess Act provides that there shall be levied and collected a cess for the purpose of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, at such rate not exceeding two per cent and 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. The Central Government, vide notification dated 26.9.1996, has prescribed cess at one per cent of the cost of construction incurred by the employer, which is to be levied and collected. 18. Before we consider the contentions, we have to refer to the judgment of Hon”ble Supreme Court in Dewan Chand Builders and Contractors v. Union of India and Other [ (2012) 1 SCC 101 ], where Hon”ble Supreme Court upheld the validity of Section 3 of the BOCWW Cess Act, holding that the same is within the competence of the Parliament and the levy under the BOCWW Cess Act is a “fee” referable to Schedule VII of List I Entry 97 of the Constitution of India. According to the petitioner, even though the constitutional validity of Section 3 has been upheld by the Hon”ble Supreme Court in Dewan Chand Builders and Contractors [ (2012) 1 SCC 101 ], the petitioner can still challenge the vires of Section 3 of the BOCWW Cess Act and Rule 3 of the BOCWW Cess Rules on different grounds. 19. Re.:- BOCWW Cess Act, 1996 is beyond the legislative competence and Section 3(1) of the BOCWW Cess Act, 1996 being vague is liable to be struck down. The petitioner challenged the constitutional validity of the charging Section, i.e. Section 3(1) of the BOCWW Cess Act contending that:- (i) Section 3(1) seeks to levy and collect cess on the cost of construction incurred by an employer without defining the term, “cost of construction” in the BOCWW Cess Act; (ii) although Section 2(d) of the BOCWW Cess Act adopts all the definitions contained in the BOCW(Regulation of Employment and Conditions of Service) Act and the term, “cost of construction” has not been defined even in this Act also; (iii) Section 3(1) of the BOCWW Cess Act is ultra vires Article 246(3) and Entry 66 of List II (State List) of the Seventh Schedule of the Constitution read with Entry 54 thereof because the cost of construction of any building or construction works necessarily includes intra-State (within State) purchase of goods/building materials, like Boulders, Sand, Cement, Bricks, Soil, Iron etc. and therefore, in pith and substance, it is a fee sought to be levied on the value of intra-State purchase of those building materials, for which legislature of the State has exclusive power to make laws in view of Article 246(3) and Entry 66 of List II- State List of the Seventh Schedule of the Constitution of India read with Entry 54 thereof. Per contra, learned counsel, Mr. Prabhash Kumar, appearing for the Union of India and Mr. A. Allam, learned Sr.S.C II appearing for the State of Jharkhand, submitted that cess levied under the provisions of the BOCWW Cess Act is a fee levied under Entry 97 of List I read with Entry 23 and 24 of List III of the Seventh Schedule and the BOCW (Regulation of Employment and Conditions of Service) Act and the BOCWW Cess Act enacted by the Parliament are valid. It was submitted that the validity of the BOCWW Cess Act has been upheld by the Hon”ble Supreme Court in Dewan Chand Builders and Contractors [ (2012) 1 SCC 101 ] and the petitioner cannot challenge the constitutional validity on a different set of grounds. 20. The BOCWW Cess Act has been enacted by the Parliament under Entry 97 List I and Entry 97 reads as under:- “97. Any other matter not enumerated in List II or List III including any tax not mentioned in either of those Lists.” Entry 54 and Entry 66 of List II read as under:- “54. Taxes on the sale or purchase of goods other than newspapers, subject to the provisions of entry 92A of List I” “66. Fees in respect of any of the matters in this List, but not including fees taken in any court.” 21. Entry 54 of List II empowers the State Legislature to make laws in respect of tax on sale or purchase of goods. As long as the law remains on the purchase of goods, it would be within the competence of State Legislature to enact such law. The word, “sale” occurring in Entry 54 of the State List is to be interpreted in the sense in which the word, “sale” is used in the Sale of Goods Act. Under no stretch of imagination, it can be said that the construction activity amount to sale/purchase of goods. The subject-matter of the BOCWW Cess Act is the activities of building and construction. The pith and substance of the BOCWW Cess Act is to levy cess on the cost of construction. The object is to augment the welfare fund under the BOCW (Regulation of Employment and Conditions of Service) Act and the essential purpose, to benefit the building and construction workers. The construction work/construction of road is mainly the activity involving workers and labourers, thereby involving unorganized sector of construction workers. The object of the contractual agreement between the petitioner and the National Highways Authority of India is to Build, Operate, Maintenance and Transfer of road NH – 33. In building the road, construction materials are used, but the contract cannot be executed without availing the work and labour of the construction workers. The contract engaging the work and labour of the construction workers is integral part of the construction activity of the petitioner, namely, construction of NH – 33. In building the road, construction materials are used, but the contract cannot be executed without availing the work and labour of the construction workers. The contract engaging the work and labour of the construction workers is integral part of the construction activity of the petitioner, namely, construction of NH – 33. The construction work/construction of the road even though involves purchase of construction materials, that does not take away the essence of the involvement of the construction workers. As pointed out earlier, the object of BOCW (Regulation of Employment and Conditions of Service) Act was intended to provide safety, health and welfare measures for the workers engaged throughout the country in building and other construction works. To construe the BOCWW Cess Act as levying tax covered under Entry 54 and Entry 66 of List II would completely miss the object of the BOCWW Cess Act. We find no merit in the contention that because of use of construction materials like Boulders, Sand, Cement, Bricks, Soil, Iron and machineries, “construction activity” falls under Entry 54 of List II involving intra-State purchase of goods and that power to levy cess by invoking residuary under Entry 97 would not be available to the Parliament. 22. The contention of the petitioner that the BOCWW Cess Act, in pith and substance, is a tax on the sale or purchase of goods, must fail. Merely because the levy of cess is the levy on the cost of construction, it cannot render the BOCWW Cess Act as one of the levy on sale of goods. Entry 66 of List II deals with “fees in respect of any other matters in this List, but not including fees taken in any court.” The construction activity and the welfare of the Construction Workers is not falling under any of the Entries of List II. Since the construction activity is not falling under any of the Entries of List II, we find no merit in the contention that the “construction activity” falls under Entry 66 of List II. 23. Upholding the constitutional validity of the BOCWW Cess Act and holding that it is within the legislative competence of the Parliament with reference to the Seventh Schedule List I Entry 97, in Dewan Chand Builders and Contractors [ (2012) 1 SCC 101 ], Hon”ble Supreme Court in para 17 and 31 held as under:- “17. 23. Upholding the constitutional validity of the BOCWW Cess Act and holding that it is within the legislative competence of the Parliament with reference to the Seventh Schedule List I Entry 97, in Dewan Chand Builders and Contractors [ (2012) 1 SCC 101 ], Hon”ble Supreme Court in para 17 and 31 held as under:- “17. …… The BOCW Act and the Cess Act break new ground in that, the liability to pay Cess falls not only on the owner of a building or establishment, but under Section 2(1)(i)(iii) of the BOCW Act – “in relation to a building or other construction work carried on by or through a contractor, or by the employment of building workers supplied by a contractor, the contractor”; The extension of the liability on to the contractor is with a view to ensure that, if for any reason it is not possible to collect Cess from the owner of the building at a stage subsequent to the completion of the construction, it can be recovered from the contractor. The Cess Act and the Cess Rules ensure that the Cess is collected at source from the bills of the contractors to whom payments are made by the owner. In short, the burden of Cess is passed on from the owner to the contractor. …… …….. ……. ………. 31. There is no doubt in our mind that the Statement of Objects and Reasons of the Cess Act, clearly spells out the essential purpose, the enactment seeks to achieve i.e. to augment the Welfare Fund under the BOCW Act. The levy of Cess on the cost of construction incurred by the employers on the building and other construction works is for ensuring sufficient funds for the Welfare Boards to undertake social security schemes and welfare measures for building and other construction workers. The fund, so collected, is directed to specific ends spelt out in the BOCW Act. Therefore, applying the principle laid down in the aforesaid decisions of this Court, it is clear that the said levy is a `fee' and not `tax'. The fund, so collected, is directed to specific ends spelt out in the BOCW Act. Therefore, applying the principle laid down in the aforesaid decisions of this Court, it is clear that the said levy is a `fee' and not `tax'. The said fund is set apart and appropriated specifically for the performance of specified purpose; it is not merged in the public revenues for the benefit of the general public and as such the nexus between the Cess and the purpose for which it is levied gets established, satisfying the element of quid pro quo in the scheme. With these features of the Cess Act in view, the subject levy has to be construed as `fee' and not a `tax'. Thus, we uphold and affirm the finding of the High Court on the issue.” 24. In Builders Association of India & Ors. v. Union of India & Ors. before the Delhi High Court, the legislative competence of the Parliament to enact the BOCWW Cess Act was challenged on the ground that levy of cess on the cost of construction is a levy or tax on the land and building relating to Entry 49 of List II. Upholding the constitutional validity of the BOCW(Regulation of Employment and Conditions of Service) Act and the BOCWW Cess Act, in para 19 Delhi High Court held as under:- “19. The challenge to the legislative competence of Parliament to enact the BOCW Act and the Cess Act is posited on the petitioners’ understanding of the subject matter of these statutes as being relatable to Entry 49 of List II. …… Therefore, to recall the Dhillon dictum, ( (1971) 2 SCC 779 , Union of India v. H.S. Dhillon), that has held the field for over three decades and a half. The lead opinion of Sikri CJ for the majority (4:3) (SCC p.791) explained the law thus: At any rate, whatever doubt there may be on the interpretation of Entry 97, List I is removed by the wide terms of Article 248. It is framed in the widest possible terms. The lead opinion of Sikri CJ for the majority (4:3) (SCC p.791) explained the law thus: At any rate, whatever doubt there may be on the interpretation of Entry 97, List I is removed by the wide terms of Article 248. It is framed in the widest possible terms. On its terms the only question to be asked is: Is the matter sought to be legislated or included in List II or in List III or is the tax sought to be levied mentioned in List II or List III: No question has to be asked about List I. If the answer is in the negative then it follows that Parliament has power to make laws with respect to that matter or tax.” In the present case, the petitioner has failed to show that levy of cess on the cost of construction falls under any of the Entries in List II or in List III. Entry 97 of List I deals with “any other matter not enumerated in List II or List III including any tax not mentioned in either of those Lists.” Since the activity of construction has no corresponding entry in List II or List III, by invoking residual Entry 97 in List I, the Parliament has legislative competence to enact the BOCWW Cess Act. We fully agree with the view taken by the Delhi High Court. 25. The contention of the petitioner is that the charging Section, Section 3, is vague since it seeks to levy and collect cess on the cost of construction incurred by an employer without defining the term, “cost of construction” in the BOCWW Cess Act. As pointed out earlier, Section 2(d) of the BOCWW Cess Act adopts the words and expressions defined in the BOCW (Regulation of Employment and Conditions of Service) Act. Rule 3 of the BOCWW Cess Rules deals with levy of cess. Rule 3 of the BOCWW Cess Rules reads as follows:- “3. Levy of cess.- For the purpose of levy of cess under sub-section (1) of section 3 of the Act, cost of construction shall include all expenditure incurred by an employer in connection with the building or other construction work but shall not include – - cost of land; - any compensation paid or payable to a worker or his kin under the Workmen’s Compensation Act, 1923.” 26. There is no merit in the contention that the charging Section, i.e. Section 3 is vague as it seeks to levy cess without defining the term, “cost of construction” in the BOCWW Cess Act. As per the charging Section, cess has to be quantified for the purpose of levy and that can be done by taking the definition of “cost of construction” in Rule 3 into consideration. Section 3 is the charging provision as well as the computation provision. The expression “cost of construction” is explained in Rule 3. While the charging Section uses the expression, “cost of construction”, the same is explained in the Rules. The charging Section as well as rule 3 ought to be read together homogenously to sub-serve the object of the enactment. 27. The Scheme of the BOCW (Regulation of Employment and Conditions of Service) Act and the BOCWW Cess Act indicate that the central focus of the Acts is the welfare of the Building and Construction Workers and the welfare of such other workers. The BOCW (Regulation of Employment and Conditions of Service) Act and the BOCWW Cess Act are thus Social Welfare legislations. The BOCW (Regulation of Employment and Conditions of Service) Act is intended to regulate employment and conditions of service of Building and Other Construction workers and to provide them their safety, health and welfare measures and other matters connected therewith or incidental thereto. We may usefully refer to the Statement of Objects and Reasons of the BOCW (Regulation of Employment and Conditions of Service) Act, which reads as under:- “It is estimated that about 8.5 million workers in the country are engaged in building and other construction works. Building and other construction workers are one of the most numerous and vulnerable segments of the unorganised labour in India. The building and other construction works are characterised by their inherent risk to the life and limb of the workers. The work is also characterised by its casual nature, temporary relationship between employer and employee, uncertain working hours, lack of basic amenities and inadequacy of welfare facilities. In the absence of adequate statutory provisions, the requisite information regarding the number and nature of accidents is also not forthcoming. In the absence of such information, it is difficult to fix responsibility or to take any corrective action. 2. In the absence of adequate statutory provisions, the requisite information regarding the number and nature of accidents is also not forthcoming. In the absence of such information, it is difficult to fix responsibility or to take any corrective action. 2. Although the provisions of certain Central Acts are applicable to the building and other construction workers yet a need has been felt for a comprehensive Central Legislation for regulating their safety, health, welfare and other conditions of service.….” In view of the circumstances explained above, it has been considered necessary to constitute Welfare Boards in every State so as to provide and monitor social security schemes and welfare measures for the benefit of Building and Other Construction Workers. To provide for levy and collection of cess on the cost of construction incurred by the employers with a view to augmenting the revenue of the Welfare Boards constituted by the State Government and under the BOCW (Regulation of Employment and Conditions of Service) Act, the Parliament has enacted the BOCWW Cess Act. The levy of cess on the cost of construction incurred by the employer is to augment funds for the Welfare Boards to undertake Social Security Scheme. 28. Re:- Challenge to the vires of Rule 3 of the BOCWW Cess Rules and also challenge to the Notification No. SO 2899 dated 26.9.1996 Under Section 14(1) of the BOCWW Cess Act, the Central Government is empowered to make rules for carrying out the provisions of the Act. Clauses (a) to (h) of sub-section (2) of Section 14 of the BOCWW Cess Act enumerate the subjects in respect of which, the Central Government can make rules. The subjects enumerated in clauses (a) to (h) of Section 14(2) are illustrative in nature of the power granted to the Central Government to make rules. Clauses (a) to (h) of sub-section (2) of Section 14 of the BOCWW Cess Act enumerate the subjects in respect of which, the Central Government can make rules. The subjects enumerated in clauses (a) to (h) of Section 14(2) are illustrative in nature of the power granted to the Central Government to make rules. Challenging the vires of Rule 3 of the BOCWW Cess Rules, learned Senior Counsel appearing for the petitioner contended that Rule 3 is beyond the competence and power of the Central Government and Section 14 of the BOCWW Cess Act is ultra vires the parent Act as the BOCWW Cess Act does not empower the Central Government to define the term, “cost of construction” and the same amounts to making legislation by the Central Government seeking levy of cess on the “cost of construction” defined under Rule 3 of the BOCWW Cess Rules, thereby violating Article 246 of the Constitution of India. 29. Per contra, the learned counsel for the respondents submitted that Rule 3 of the BOCWW Cess Rules clarifies parameters to determine the cost of construction and the computation of the cost of construction bears nexus with the actual purport of the levy and computation of the cost of construction is rational and not arbitrary. 30. The question falling for consideration is as to whether Rule 3 of the BOCWW Cess Rules is ultra vires the parent Act and Article 246 of the Constitution of India. 31. In the case of State of T.N & Anr. v. P. Krishnamurthy & Ors. [ (2006) 4 SCC 517 , Hon”ble Supreme Court has laid down the following tests for considering the validity of a subordinate legislation:- “Whether the Rule is valid in entirety ? 15. There is a presumption in favour of constitutionality or validity of a sub-ordinate Legislation and the burden is upon him who attacks it to show that it is invalid. It is also well recognized that a subordinate legislation can be challenged under any of the following grounds :- a) Lack of legislative competence to make the subordinate legislation. b) Violation of Fundamental Rights guaranteed under the Constitution of India. c) Violation of any provision of the Constitution of India. d) Failure to conform to the Statute under which it is made or exceeding the limits of authority conferred by the enabling Act. b) Violation of Fundamental Rights guaranteed under the Constitution of India. c) Violation of any provision of the Constitution of India. d) Failure to conform to the Statute under which it is made or exceeding the limits of authority conferred by the enabling Act. e) Repugnancy to the laws of the land, that is, any enactment. f) Manifest arbitrariness/unreasonableness (to an extent where court might well say that the Legislature never intended to give authority to make such Rules). 16. The court considering the validity of a subordinate Legislation, will have to consider the nature, object and scheme of the enabling Act, and also the area over which power has been delegated under the Act and then decide whether the subordinate Legislation conforms to the parent Statute. Where a Rule is directly inconsistent with a mandatory provision of the Statute, then, of course, the task of the court is simple and easy. But where the contention is that the inconsistency or non-conformity of the Rule is not with reference to any specific provision of the enabling Act, but with the object and scheme of the Parent Act, the court should proceed with caution before declaring invalidity.” 32. Keeping in view the above principles, let us consider the challenge to the vires of Rule 3 of the BOCWW Cess Rules. Under Section 14(1) of the BOCWW Cess Act, the Central Government is empowered to make rules for carrying out the provisions of the Act. Rule 14(2)(h) of the BOCWW Cess Act empowers the Central Government to make “rules in any other matter which has to be or may be, prescribed.” Thus, Section 14 clearly empowers the Central Government to frame rules to carry out the purpose of the Act. Rule 3 of the BOCWW Cess Rules deals with levy of cess and explains “cost of construction”. As per rule 3, the cost of construction means, “cost of construction shall include all expenditure incurred by an employer in connection with the building or other construction work but shall not include cost of land and any compensation paid or payable to a worker or his kin under the Workmen’s Compensation Act, 1923.” 33. It is now well settled principle of interpretation of the Statute that the court must give effect to the purport and object of the Act. It is now well settled principle of interpretation of the Statute that the court must give effect to the purport and object of the Act. The rule of purposive construction should, of course, be subject to the applicability of the principles of interpretation. Cess is to be levied not exceeding 2% but not less than 1% on the cost of construction. Rule 3 explains the cost of construction. Computation of cost of construction bears nexus with the actual payer and levy of cess. Therefore, it cannot be contended that Rule 3 exceeds the limits of authorization conferred upon the Central Government by the Act. Considering the object of the enabling Act, we are of the view that Rule 3 conforms to the parent Act and is not violative of parent Act and Article 246 of the Constitution of India. 34. On behalf of the petitioner, it was then contended that levy and collection of cess at the rate not exceeding 2% but not less than 1% of the cost of construction instead “on the labour component involved in the cost of construction under Section 3 of the Act read with the Rules is arbitrary and unreasonable, highly excessive and confiscatory in nature. Learned Senior Counsel appearing for the petitioner placed reliance on A.V. Fernandez v. State of Kerala ( AIR 1957 SC 657 ) and Mathuram Agrawal v. State of Madhya Pradesh ( AIR 2000 SC 109 ). 35. Vide Notification No. S.O 2899 dated 26.9.1996, for the purpose of the BOCW (Regulation of Employment and Conditions of Service) Act (27 of 1996), cess at the rate of 1% of the cost of construction incurred by the employer is to be levied and collected. Rule 3 of the BOCWW Cess Rules explains the parameters to determine the cost of construction. The component of cess is in-built in the cost of construction, for which the contractor is reimbursed. The Notification No. S.O 2899 dated 26.9.1996 is for the purpose of levy of cess at the rate of 1% of the cost of construction as per Section 3 of the BOCWW Cess Act. The levy of cess at the rate of 1% is for the purpose of augmenting the resource of the Building and Other Construction Workers Welfare Boards under the BOCW(Regulation of Employment and Conditions of Service) Act. The levy of cess at the rate of 1% is for the purpose of augmenting the resource of the Building and Other Construction Workers Welfare Boards under the BOCW(Regulation of Employment and Conditions of Service) Act. We have held earlier that the engagement of construction workers and labourers is integral part of the construction activity. Since the work and labour are inseparable part of the construction activity, the labour part is inseparable, cess is levied on the cost of construction. With the growth of industrialization and urbanization, the volume of construction activities including construction of highways, expressways, fly-over and road and other infrastructures undertaken by the Government Agencies and Public Sector Undertakings are on increase. The main object of the Statute being to augment revenue for the welfare of the construction workers and therefore, cess at the rate of 1% is levied on the cost of construction. The submission that levy of cess at the rate of 1% on the cost of construction is arbitrary and excessive is without any basis and is liable to be rejected. 36. Levy of cess on the cost of construction is intended for augmenting the revenue of the Welfare Boards. Observing that the cess is a fee intended to benefit a specified class of persons, viz construction workers. In Dewan Chand Builders and Contractors [ (2012) 1 SCC 101 ], Hon’ble Supreme Court in para 28, 29 and 30 held as under:- “28. On the basis of the above considerations, this Court in the Hingir Rampur case ( AIR 1961 SC 459 ), examined the scheme of the Act impugned in that case in depth and opined that the primary and the principal object of the Act was to develop the mineral areas in the State and to assist in providing more efficient and extended exploitation of its mineral wealth. The Cess levied did not become a part of the consolidated fund and was not subject to an appropriation in that behalf. It went into a special fund earmarked for carrying out the purpose of the Act and thus, its existence established a correlation between the Cess and the purpose for which it was levied, satisfying the element of quid pro quo in the scheme. These features of the Act impressed upon the levy the character of a `fee' as distinct from a `tax'. 29. Recently in State of W.B. Vs. These features of the Act impressed upon the levy the character of a `fee' as distinct from a `tax'. 29. Recently in State of W.B. Vs. Kesoram Industries Ltd. & Ors. (2004) 10 SCC 201 ), the Constitution Bench of this Court, was faced with a challenge to the Constitutional validity of the levy of Cesses on coal-bearing lands, tea plantation lands and on removal of bricks earth. Relying on the decision in Hingir Rampur Coal Co. Ltd ( AIR 1961 SC 459 ), speaking for the majority, R.C. Lahoti, J. (as His Lordship then was), explained the distinction between the terms `tax' and `fee' in the following words: (Kesoram Industries case, (2004) 10 SCC 201 ) SCC p.332, para 146) "146. …The term cess is commonly employed to connote a Tax with a purpose or a tax allocated to a particular thing. However, it also means an assessment or levy. Depending on the context and purpose of levy, cess may not be a tax; it may be a fee or fee as well. It is not necessary that the services rendered from out of the Fee collected should be directly in proportion with the amount of Fee collected. It is equally not necessary that the services rendered by the Fee collected should remain confined to the person from whom the fee has been collected. Availability of indirect benefit and a general nexus between the persons bearing the burden of levy of fee and the services rendered out of the fee collected is enough to uphold the validity of the fee charged." 30. In the light of the tests laid down in Hingir Rampur ( AIR 1961 SC 459 ) and followed in Kesoram Industries (2004) 10 SCC 201 ), it is manifest that the true test to determine the character of a levy, delineating `tax' from `fee' is the primary object of the levy and the essential purpose intended to be achieved.” 37. To summarize our conclusion as under:- Following the ratio of the judgment of Hon’ble Supreme Court in Dewan Chand Builders and Contractors [ (2012) 1 SCC 101 ], we hold that the Parliament has legislative competence to enact the BOCWW Cess Act. To summarize our conclusion as under:- Following the ratio of the judgment of Hon’ble Supreme Court in Dewan Chand Builders and Contractors [ (2012) 1 SCC 101 ], we hold that the Parliament has legislative competence to enact the BOCWW Cess Act. Rule 3 of the BOCWW Cess Rules is not ultra vires the BOCWW Cess Act and Article 246 of the Constitution of India and levy of cess at the rate of 1% on the cost of construction is neither arbitrary, nor excessive. There is no arbitrariness in the Notification No. S.O 2899 dated 26.9.1996 issued by the Central Government, by which cess at the rate of 1% of the cost of construction incurred by the employer to be levied and collected for the purposes of the BOCW (Regulation of Employment and Conditions of Service) Act. There is no arbitrariness or unreasonableness in the levy of cess at the rate of 1% of the cost of construction incurred by the petitioner company. In the result, the writ petition is dismissed.