Jharkhand High Court
M/S Anvil Cables Private Limited ... vs State Of Jharkhand Through The ... on 4 December, 2023
Author: Gautam Kumar Choudhary
Bench: Gautam Kumar Choudhary
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(C) No. 5458 of 2023
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M/s Anvil Cables Private Limited through its Constituted Attorney, Mr. Shailendra
Kumar Singh, resident of Dewanji Street, Hooghly, West Bengal
.... .... .... Petitioner
Versus
1. State of Jharkhand through the Secretary, Department of Labour, Employment &
Training, having its office at Sharam Bhawan, Doranda, Ranchi
2. Labour Commissioner, Department of Labour, Employment & Training, having
its office at Sharam Bhawan, Doranda, Ranchi
3. Assistant Labour Commissioner-cum-Cess Assessment Officer, having its office
at Sharam Bhawan, Doranda, Ranchi
4. Jharkhand Bijli Vitran Nigam Limited, through its Managing Director, having its
office at Engineering Building, HEC, Dhurwa, Ranchi
5. General Manager (Project & Financial Management), Jharkhand Bijli Vitran
Nigam Limited, having its office at Engineering Building, HEC, Dhurwa, Ranchi
.... .... .... Respondents
CORAM: HON'BLE MR. JUSTICE GAUTAM KUMAR CHOUDHARY
For the Petitioner : Mr. M.S. Mittal, Sr. Advocate
For the State : Mr. Apoorva Singh, A.C. to S.C. (Mines)-II
For the JBVNL : Mr. Ashok Kumar Yadav, Advocate
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Order No.03 / Dated : 04.12.2023
Instant writ petition has been filed for issuance of an order/direction to the
Respondents to refund the sum of Rs.1,25,06,155/- as labour cess on supply of
materials under the BOCW Act, Cess Act and the Cess Rules.
2. Petitioner is a Company engaged in business of workers contract of the
Government and was awarded contract for the tender for Rural Electrification Works
of Giridih District under Din Dayal Upadhyay Gram Jyoti Yojna project in XIIth
plan pursuant to NIT No.250/PR/JBVNL/2015-16.
3. Petitioner was selected as the successful bidder, two separate orders were
issued in his favour which are as follows:-
I. Letter of Award for supply of materials being LOA No.03/RE dated
05.02.2016.
II. Letter of Award for erection and civil works being LOA No.04/RE dated
05.02.2016.
4. The main grievance of the petitioner- Company is that supply order, as
referred to above, was only to supply materials in which no civil work was involved,
and the work order was purely service based contract and involves the services of
labourers/ workers in setting up of the transmission lines and allied construction.
5. The total contract price of all the required materials/equipment was to the
tune of Rs.96,95,23,881/- and under the work order, the total contract price for
erection of all required materials/equipment came to Rs.7,93,08,883/- and further the
total amount of labour cess deducted was Rs.1,25,06,155/-.
6. Apart from this, there were other purchase and work order on which cess
has been deducted by respondent-JBVNL and aggrieved by said deduction, the
present Writ Petition has been filed.
7. It is submitted by learned senior counsel for the petitioner that the
grievance of petitioner's company is confined to supply of materials for which cess
has been charged.
8. It is further submitted that whether on supply part in composite contract,
cess can be deducted or not is no more res-integra. Law has laid in the judgment
reported in Uttar Pradesh Power Transmission Corporation Limited & Anr. vs. CG
Power and Industrial Solutions Limited and Anr., 2021 SCC OnLine 383 which
emphatically holds that supply contracts were exonerated from the ambit of the said
Cess Act, 1996. In this case, it was held that Uttar Pradesh Power Transmission
Corporation Limited has no power and authority to realize labour cess under the
Cess Act, 1996 in respect of first contract which was for supply. Law as laid down
by the Apex Court, has been followed by Hon'ble the Division Bench of this Court
in L.P.A. No.511 of 2022.
9. The specific stand of the JBVNL as per the counter affidavit is that earlier
the deductions of cess were confined to the labour component of the contract and not
to the supply part. However, after objections being raised by the Principal
Accountant General, cess is levied on the entire contract value.
10. After having been considered the submissions advanced on behalf of both
the sides there can be no shred of doubt that supply portion of the contract is not
amenable to deductions of cess.
Under the circumstances, the Writ Petition is allowed with a direction to
the respondent nos.2 and 3 to refund the deducted amount under the supply portion
within eight weeks from the date of order with simple interest @ 6 % on the said
amount. There will be no further deduction of cess on the supply part of the contract.
Writ Petition is allowed. Pending I.A, if any, stands disposed of.
(Gautam Kumar Choudhary, J.)
Anit
