HIGH COURT OF JUDICATURE AT ALLAHABAD AFR Chief Justice's Court Case :- WRIT - C No. - 39800 of 2015 Petitioner :- M/S K.R.B.L. Infrastructure Ltd. Respondent :- Union Of India And 3 Ors. Counsel for Petitioner :- Y.K. Sinha,Akshat Sinha Counsel for Respondent :- A.S.G.I.,C.S.C.(2015/35791),Pankaj Saxena Hon'ble Dr. Dhananjaya Yeshwant Chandrachud,Chief Justice Hon'ble Yashwant Varma,J.
The petitioner has sought to challenge an order passed by the Deputy Labour Commissioner, NOIDA Region, District Gautam Budh Nagar raising a demand in the amount of Rs.12,03,432/- under the provisions of the Building And Other Construction Workers Welfare Cess Act, 19961. The Act provides for the remedy of an appeal under Section 11(1) of the Act. The petitioner has sought to question the constitutional validity of the provisions of Rule 14(2)(b) of the Building and Other Construction Workers' Welfare Cess Rules, 19982. Rule 14 provides as follows:
"14. Appeal.- (1) An employer aggrieved by an order of the assessment made under Rule 7 or by an order imposing penalty made under Rule 12 may appeal against such order, within three months of the receipt of such order to the Appellate Authority.
(2) The appeal shall be accompanied with-
(a) the order appealed against;
(b) a certificate from the Cess Collector to the effect that the amount of cess or penalty or both, as the case may be, relating to such appeal has been deposited;
(c) a fee equivalent to one per cent of the amount in dispute or penalty or both, as the case may be, under such appeal;
(d) a statement of points in dispute;
(e) documentary evidence relied upon.
(3) On receipt of the appeal the Appellate Authority may call from the Assessing Officer a statement on the basis of his assessment order appealed against, as such Appellate Authority may consider necessary for the disposal of such appeal.
(4) The Appellate Authority shall give the appellant an opportunity of being heard in the matter and dispose of the appeal as expeditiously as possible.
(5) On being satisfied on the quantum of cess the Appellate Authority shall confirm the order of the Assessing Officer or if in his opinion the assessment was wrong or on the higher side shall modify the order of assessment or if in his opinion the assessment is on the lower side or if the basis of assessment is wrong, it shall remand back the assessment order to the Assessing Officer along with his observations to rectify the wrong.
(6) An order remanded back under sub-rule (5) shall be disposed of by the Assessing Officer within one month in view of the observation made by the Appellate Authority:
Provided that if the amount of cess is proposed to be enhanced the assessee shall be given an opportunity of being heard.
(7) No appeal shall lie against the order of the Appellate Authority under this rule."
The submission which has been urged is that the requirement of a pre deposit under Rule 14(2)(b) of the Rules is ultravires the provisions of Section 11(1) of the Act on the ground that no requirement to that effect is contained in the statute. Moreover, it has been submitted that under Clause (g) of sub section (2) of Section 14 of the Act which defines the rule making power of the Central Government, the Act has only made provision for the fees which shall accompany an appeal and hence it was not open to the Government while framing subordinate legislation to stipulate a requirement of making a deposit.
Sub section (1) of Section 11 of the Act which provides an appellate remedy against an order of assessment under Section 5 or against an order imposing a penalty under Section 9 stipulates that the employer may file an appeal to the Appellate Authority 'in such form and in such manner as may be prescribed'. The expression 'prescribed' is defined by Section 2(c) of the Act to mean prescribed by the Rules. The manner in which an appeal can be filed is therefore to be governed by the Rules which are framed in exercise of the rule making power under Section 14 of the Act. Sub section (1) of Section 14 of the Act is a general provision by which the Central Government is empowered to make Rules for carrying out the provisions of the Act. Sub section (2) is illustrative of the ambit of the rule making power and Clauses (a) to (g) are indicative of matters upon which Rules can be framed. Sub section (2) is prefaced by the words 'without prejudice to the generality of the foregoing power' meaning thereby that the illustrations contained in Clauses (a) to (g) are not exhaustive of the rule making power as generally framed in sub section (1) of Section 14 of the Act. In fact Clauses (a) to (g) of sub section (2) of Section 14 also contemplate that Rules can be framed in regard to any other matter which has to be or which may be prescribed. While formulating the Rules it was open to the Central Government to regulate the manner in which an appeal can be filed. A requirement that the appeal shall be accompanied by a certificate of the Cess Collector that the amount of cess or penalty or both have been deposited regulates the manner in which an appeal has to be filed and is, therefore, referable to the provisions of Section 11(1) read with Section 14 (1) of the Act. The imposition of a requirement of deposit of the cess and of the production of a certificate from the Cess Collector to that effect is hence not ultravires. Besides, the remedy of a writ petition under Article 226 is always available in the facts and circumstances of each case though, having due regard to the provisions of Rule 14(2)(b) of the Rules, the Court would be circumspect in granting relief in the facts of a particular case. The requirement of a pre-deposit is not violative of Article 14.
In Elora Construction Company vs. Municipal Corporation of Greater Bombay3, Hon'ble Mr. Justice S.P. Bharucha, as his Lordship then was, upheld the requirement of a pre-deposit under the provisions of Section 217 of the Bombay Municipal Corporation Act, 1888. The decision in Elora Construction (supra) has been followed in several judgments of the Supreme Court subsequently to which a reference would be shortly made.
In Anant Mills Company Ltd. vs. State of Gujarat4, the Supreme Court held that the right of appeal is a creature of the statute and it is for the legislature to determine whether that right should be given unconditionally to an aggrieved individual or should be allowed subject to condition. In Vijay Prakash D. Mehta vs. Collector of Customs5, the Supreme Court held that the right of appeal is neither an absolute right nor an ingredient of natural justice, the principles of which must be followed in all judicial or quasi-judicial adjudications. The Supreme Court observed that the right of appeal is a statutory right and can be circumscribed by the condition in the grant. This decision was followed in Gujarat Agro Industries Company Ltd. vs. Municipal Corporation of the City of Ahmedabad6.
The judgment in Elora Construction (supra) delivered by the Bombay High Court was cited with approval in the judgment of the Supreme Court in Gujarat Agro Industries (supra) and in a subsequent decision in Shyam Kishore vs. Municipal Corporation of Delhi7. The judgment in Gujarat Agro Industries (supra) involved a challenge to Section 406(e) of the Bombay Municipal Corporation Act as applicable in Gujarat which requires the deposit of tax as a pre-condition for entertaining an appeal. A limited waiver of tax was contemplated which was held not to be violative of Article 14 of the Constitution.
Subsequently, in Government of Andhra Pradesh vs. P. Laxmi Devi8, the Supreme Court upheld the constitutional validity of Section 47-A of the Indian Stamp Act as applicable in the State of Andhra Pradesh. The proviso stipulated that no reference would be made by Registering Officer unless an amount equal to 50% of the deficit duty was deposited. Following the earlier decisions, this requirement was held to be constitutionally valid.
In Ganesh Yadav Vs Union of India9, a Division Bench of this Court in a judgment dated 29 May 2015 upheld the constitutional validity of the provisions of Section 35F of the Central Excise Act, 1944 as amended, with effect from 6 August 2000 so as to provide a mandatory pre-deposit of 7.5 percent for first appeals and 10 percent for second appeals, of the total tax or penalty demanded. Rejecting the submission that the provision was ultra vires and unconstitutional, the Division Bench held as follows:
"...As a first principle of law, a right of appeal is a statutory right and it is open to the legislature which confers a remedy of an appeal to condition the appeal subject to compliance with conditions. A fiscal legislation can stipulate a requirement of pre-deposit as a condition precedent to an appeal to be entertained. The restraint on the power of the legislature to do so, is that the condition which is prescribed should not be so onerous so as to restrict or abrogate the right of appeal altogether. A condition which is unduly onerous will render the right of appeal illusory and would hence run the risk of being held to be arbitrary and of being violative of the fundamental right conferred by Article 14 of Constitution."
For these reasons, we find no substance in the challenge to Rule 14 (2)(b) of the Rules.
Insofar as the merits of the order of the Deputy Labour Commissioner are concerned, it would not be either appropriate or proper for this Court to entertain a petition under Article 226 since it would be open to the petitioner to file an appeal under Section 11 of the Act. The submission before the Court is that the amount of cess has already been deposited. We leave it open to the petitioner to produce sufficient material before the Appellate Authority to establish to the satisfaction of the Appellate Authority that the amount of cess was deposited. The petitioner, as the facts of the case would indicate, is a subsequent transferee in respect of the plot in question to which the petition relates. Whether the cess has or has not been deposited, is a matter of factual verification which can be carried out by the Appellate Authority. For these reasons, we relegate the petitioner to the remedy of an appeal under Section 11 of the Act subject to due verification by the Appellate authority of the submission that the cess has already been deposited.
In the event that the petitioner files an application for condonation of delay in filing the appeal, the application may be duly considered in accordance with law particularly having due regard to the fact that the petitioner was pursuing these proceedings.
Hence, no case for interference is made out. The petition is, accordingly, dismissed. There shall be no order as to costs.
Order Date :- 23.7.2015 VMA (Dr. D.Y. Chandrachud, C.J.) (Yashwant Varma, J.)