The Madras High Court has dismissed a petition challenging a circular issued by the Controller of Defence Accounts (CDA) in March this year stating that the headquarters had issued instructions to levy cess of one to two per cent on the total cost of construction of buildings.
The levy, under the Building and Other Construction Workers Welfare Cess Act (Central Act) is to provide welfare measures to workers and transfer the amount to the Building and Other Construction Workers Welfare Board constituted by State governments.
The petitioner, M.E.S. Builders Association of India, Wellingdon branch, the Nilgiris, submitted that the members of the association were engaged in contract work for the Military Engineering Service. The demand for cess collection would be an unnecessary burden. The collection would come to a huge sum.
Under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act (Central Act), State governments have to constitute the board. The legislation was confined to Central government buildings.
In his order, Justice K. Chandru said merely because the State government had not constituted a board would not allow the petitioner-builders not to pay the cess. The Cess Act mandated levy and collection of cess. The petitioner had no way out in avoiding the welfare scheme conceived by an Act of Parliament. When the board constituted by the State government came into existence, the money so transferred would be utilised for the welfare of construction workers.
For all works undertaken by them in relation to buildings in military areas, the builders were bound to pay the cess. They could not plead ignorance or economic difficulty, since the Acts were in existence for 15 years. “It is their own folly if they have not paid the amount.”
The cess being only two per cent of the cost of construction, it could not be said to be an unreasonable restriction depriving the petitioner's right to carry on trade, Mr. Justice Chandru said.