Research › Search › Judgment

Gauhati High Court · body

2015 DIGILAW 424 (GAU)

Bhaskar Sharma v. State of Assam & Ors.

2015-04-06

UJJAL BHUYAN

body2015
Ujjal Bhuyan, J. – Heard Dr. AK Saraf, learned Senior Counsel assisted by Mr. A Goyal, learned counsel for the petitioner and Mr. S Sarma, learned counsel appearing for the Labour Department, Govt. of Assam. Also heard Mr. R Borpujari, learned counsel appearing for Brahmaputra Cracker and Polymer Ltd. 2. Case was heard on 09.03.2015 and 19.03.2015 was fixed for delivery of judgment. For paucity of time, judgment could not be dictated on 19.03.2015. Accordingly today is fixed for delivery of judgment. 3. Core issue involved in this writ petition is the interpretation of the expression "Building or Other Construction Work" as appearing in section 2(1)(d) of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 in the context of the claim of the petitioner that the work executed by him in the form of earth filling and site grading do not fall within the ambit of the expression "Building or Other Construction Work". 4. The above issue has arisen in the following contextual facts. 5. Petitioner is a Class-1(A) Contractor under the Assam PWD (NH). He is engaged in contract and construction works under various Govt. departments and public sector undertakings. He was awarded work of earth filling and site grading work by Brahmaputra Cracker and Polymer Ltd. (BCPL), a Govt. of India Enterprise at BCPL and CISF Township (Part-B) vide letter of acceptance dated 11.02.2011. Petitioner started execution of the work and submitted bills to the BCPL. Against his running bill, respondent No. 5 made deduction of Rs. 53,795/- on 01.06.2011 on account of labour cess at the rate of 1% of the bill amount. On an inquiry by the petitioner, he was informed by the BCPL authority that such deduction was made under the provisions of the Building and Other Construction Workers Welfare Cess Act, 1996. 6. Contending that the activities of the petitioner do not come within the ambit of "Building or Other Construction Work", petitioner has challenged the legality and validity of the action of the respondents in making deduction from his contractual bills on account of labour cess. 7. This Court by order dated 21.10.2011 had issued notice and passed an interim order directing respondent Nos. 5 & 6 not to make any deduction at source on account of labour cess. 8. 7. This Court by order dated 21.10.2011 had issued notice and passed an interim order directing respondent Nos. 5 & 6 not to make any deduction at source on account of labour cess. 8. Respondent No. 4 i.e., Labour Commissioner, Assam has filed an affidavit stating that the contract work carried out by the petitioner attracts the provisions of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 and, therefore, deduction of cess at source from the bills of the petitioner by the respondent No. 5 is legal and within jurisdiction. Earth filling and site grading work carried out by the petitioner are connected with specific construction works and as such attracts provisions of the aforesaid Act. 9. Dr. Saraf, learned Senior Counsel for the petitioner has referred to the various provisions of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 as well as the provisions of the Building and Other Construction Workers Welfare Cess Act, 1996 to contend that levy of cess on the work executed by the petitioner, namely, earth filling and site grading is totally unjustified and such deduction has been made on an erroneous interpretation and misconception of law. The present activity of the petitioner cannot be said to be a "Building or Other Construction Work". He, therefore, submits that impugned levy may be set aside and respondents be prohibited from levying of such cess on the bills submitted by the petitioner while executing the contract work relating to earth filling and site grading at BCPL and CISF Township (Part-B). 10. While Mr. Sarma, learned counsel for the Labour Department supports the levy of cess and the consequential deduction made, Mr. Borpujari, learned counsel for the BCPL submits that BCPL authority has only carried out the instruction of the State authority for levy of cess at source. 11. Submissions made have been considered. 12. The issue which arises for consideration in this lis has already been noticed above. 13. Parliament has enacted the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 (1996 Act) to regulate the employment and conditions of service of building and other construction workers and to provide for their safety, health and welfare measures and for other matters connected therewith or incidental thereto. 13. Parliament has enacted the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 (1996 Act) to regulate the employment and conditions of service of building and other construction workers and to provide for their safety, health and welfare measures and for other matters connected therewith or incidental thereto. Section 18 of the 1996 Act provides for constitution of State Welfare Boards by every State Govt. to exercise the powers and to perform the functions assigned to it under the 1996 Act. The functions of the State Welfare Boards are mentioned in section 22. 14. Parliament has also enacted the Building and Other Construction Workers' Welfare Cess Act, 1996 (Cess Act) to provide for the levy and collection of 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 1996 Act. Section 3 is the charging section. It provides for levy and collection of cess. As per section 3, there shall be levied and collected a cess for the purposes of the 1996 Act at such rate not exceeding 2%, but not less than 1% of the cost of construction incurred by an employer, as the Central Govt. may by notification in the official gazette specify. Under sub-section (2), the cess so levied shall be collected from every employer in such manner and at such time including by way of deduction at source as may be prescribed. 15. It has been placed on record that in exercise of the power conferred under sub-section (1) of section 3 of the Cess Act, Govt. of India in the Ministry of Labour had issued a notification dated 12.10.1996 specifying cess for the purpose of the 1996 Act at the rate of 1% of the cost of construction incurred by employer. State of Assam has also framed the Building and Other Construction Workers' (Regulation of Employment and Conditions of Service) Assam Rules, 2007 to give effect to the provisions of the 1996 Act. Section 2(d) of the Cess Act provides that words and expressions used in the said Act, but not defined and has been defined in the 1996 Act shall have the same meaning assigned to them in the 1996 Act. 16. Section 2(d) of the Cess Act provides that words and expressions used in the said Act, but not defined and has been defined in the 1996 Act shall have the same meaning assigned to them in the 1996 Act. 16. For the purpose of answering the issue framed at the very outset, it may be relevant to examine the definitions of three expressions in particular, namely, "Building or Other Construction Work", "Building Worker" and "Employer" as appearing in the 1996 Act. 17. Section 2(1) (d) of the 1996 Act defines the expression "Building or Other Construction Work" in the following terms :- "(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 Govt. 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;" 18. A careful reading of the said definition will make it clear that the said expression means construction, alteration, repair, maintenance or demolition, of or, in relation to, buildings, streets, roads, railways, tramways, airfields, irrigation etc. In other words, the work must be construction, alteration, repairs, maintenance or demolition of or in relation to any building, street, road etc. Thus, the expression "Building or Other Construction Work" as per the definition clause must be interpreted to mean the work of construction, alteration, repair, maintenance or demolition in connection with buildings, streets, roads etc. In other words, the work must be construction, alteration, repairs, maintenance or demolition of or in relation to any building, street, road etc. Thus, the expression "Building or Other Construction Work" as per the definition clause must be interpreted to mean the work of construction, alteration, repair, maintenance or demolition in connection with buildings, streets, roads etc. 19."Building worker" has been defined in section 2(1) (e) of the 1996 Act to mean a person who is employed to do any skilled, semi skilled or unskilled, manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be express or implied, in connection with any building or other construction work, but does not include any such person who is employed mainly in managerial or administrative capacity or who is employed in a supervisory capacity drawing wages exceeding Rs. 1600 per month or exercises functions mainly of managerial nature. Here also, the expression "building worker" would mean the categories of workman mentioned in the definition engaged in connection with any building or other construction work. 20. "Employer" is defined in section 2(1) (i) (iii) to mean, in relation to an establishment, the owner thereof, and includes in relation to a building or other construction work carried out by or through a contractor or by the employment of building workers supplied by a contractor, the contractor. Therefore, a contractor executing work relating to a building or other construction work would come within the ambit of the definition of "employer" under section 2(1) (i). 21. Thus, as is evident from the above, a common thread runs through the three definitions as discussed above incorporating two expressions which are "Building" and "Other Construction Work". As noticed above, both the two expressions "Building" and "Other Construction Work" have been jointly used as one expression and has been given a statutory definition under section 2(1) (d) of the 1996 Act to mean construction, alteration, repair, maintenance or demolition, in relation to, buildings, streets, roads, railways and such other works. 22. Question for consideration is whether earth filling and site grading work, as is being executed by the petitioner, would come within the ambit of the definition of "Building or Other Construction Work" as noticed above. 22. Question for consideration is whether earth filling and site grading work, as is being executed by the petitioner, would come within the ambit of the definition of "Building or Other Construction Work" as noticed above. The work earth filling and site grading has been described in the letter of acceptance dated 11.02.2011 which is a part of the bid documents and which reads as under: - "1.0. earth filling & Site Grading Work: Earthwork in filling with borrow earth for all heights and depths for site grading or at any other place as directed to proper levels, slopes, grades and camber with selected earth obtained from approved borrow areas for all leads and lifts, including excavation of earth at borrow areas, clearing and stripping at borrow areas (if necessary), loading, unloading, transportation etc. clearing and stripping as per specifications uprooting of vegetation, roots and disposal of the shrubs bushes roots etc. breaking clods, spreading in layers not exceeding 15 cms loose thickness, watering, ramming and compacting with sheep foot/power driven rollers/vibratory roller to give at least 90% of max laboratory dry density, providing and operating POL and operator charges of necessary rollers and other equipment, providing testing apparatus and testing the degree of consolidation, dressing and levelling, etc. complete, including disposal of all unserviceable materials if any, as per drawings, specifications and directions of Engineer-in-charge. (Borrow areas shall be arranged by the contractor. Contractor shall bear all expenses towards royalties; right of way etc. complete and the rate quoted shall include all royalties, right of way etc. complete). (Quoted Item Rate offer shall be inclusive of all required materials, labour, consumables, taxes, royalties, carriage charges, clearing and stripping of tea bushes, cutting of trees (if any) etc. complete)." 23. A careful analysis of the item description of the contract work will show that the work is basically extracting earth from one place, transporting it to the construction site and thereafter to fill up the depths in the construction site by the extracted earth. The work also includes levelling of the filled up site, including any heights or slopes existing at the site. 24. Black's Law Dictionary (Sixth Edition) explains "Building" as a structure designed for habitation, shelter, storage, trade, manufacture, religion, business, education and the like. It also means a structure or edifice enclosing a space within its walls and usually, but not necessarily, covered with a roof. 24. Black's Law Dictionary (Sixth Edition) explains "Building" as a structure designed for habitation, shelter, storage, trade, manufacture, religion, business, education and the like. It also means a structure or edifice enclosing a space within its walls and usually, but not necessarily, covered with a roof. Therefore, a "Building" means a structure or edifice enclosing a space within its walls and which is designed for habitation, shelter, manufacture and such other activities. In other words, it must be a structure or edifice constructed, which leads to the other component of the above joint expression i.e., "construction work". As per Black's Law Dictionary (Sixth Edition), "construct" means to build, erect, put together, make ready for use; it means to adjust and join materials or parts thereof so as to form a permanent whole. The word "construct" has been distinguished from the word "maintain", which means to keep up, to keep from change, to preserve. "Construction" on the other hand, has been explained to mean the process of bringing together and co-relating a number of independent entities so as to form a definite entity; it means creation of something new as distinct from repair or improvement of something already existing. 25. As seen from the above, though the statutory meaning is wider than the dictionary meaning, nonetheless, an activity to be deemed as "building or other construction work" must necessarily have to relate to construction that is to build or erect a structure or edifice. Viewed from that perspective, earth filling and site grading work cannot be termed as "building or other construction work". Any building or construction work that may be carried out at the site after completion of earth filling and site grading as noticed above, may come within the ambit of the definition of "Building or Other Construction Work" as defined in section 2(1) (d) of the 1996 Act but not earth filling and site grading per se. 26. Further, from a reading of the preamble to the Cess Act, it is clear that cess is to be levied and collected on the cost of construction incurred by the employer. Therefore, from a careful analysis of the relevant provisions of the 1996 Act and the Cess Act, it becomes evident that cess is to be levied and collected on the cost of construction which does not include earth filling and site grading. 27. Therefore, from a careful analysis of the relevant provisions of the 1996 Act and the Cess Act, it becomes evident that cess is to be levied and collected on the cost of construction which does not include earth filling and site grading. 27. In the light of the discussions made above, the issue as framed is answered in favour of the petitioner. Since the activity of earth filling and site grading does not come within the ambit of "Building or Other Construction Work", levy of cess under section 3 of the Cess Act will not be justified. Ordered accordingly. Therefore, the cess already levied shall be refunded back to the petitioner. Writ petition is allowed, but without any order as to costs.