Allowed

K.P.Hayarunnisa v. State of Kerala

Kerala HC14 Dec 2020WP(C)/31704/2013

Case brief

AI extract

What is this about?

The High Court held that an assessment order under Section 5 of the Building and Other Construction Workers Welfare Cess Act is invalid if no prior notice under Section 4(2) was issued after the employer failed to file a return. The court quashed the order and directed the issue of a fresh notice.

What did the court decide?

Impugned assessment order quashed; petitioner directed to be given a fresh notice under Section 4(2) of the Act.

K.P.Hayarunnisa Vs State of Kerala — Pension and Retirement Benefits | Kerala HC (2020)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS

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MONDAY, THE 14TH DAY OF DECEMBER 2020 / 23RD AGRAHAYANA, 1942

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WP(C).No.31704 OF 2013(K)

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PETITIONER:

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K.P.HAYARUNNISA W/O K.A. HASSAN KALLAMPARAMBIL HOUSE, PONKUNNAM P.O.,KOTTAYAM.

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BY ADVS. SRI.K.A.HASSAN SMT.JULIAH PRIYA RESHMY

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RESPONDENTS:

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1 STATE OF KERALA REPRESENTED BY GOVT. SECRETARY, LABOUR DEPARTMENT, TRIVANDRUM-695 001.

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2 ASSISTANT LABOUR OFFICER (ASSESSING OFFICER), KOTTAYAM-686 101.

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3 DISTRICT LABOUR OFFICER, KOTTAYAM (APPELLATE AUTHORITY AS PER SEC. 11 OF THE BUILDING AND OTHER CONSTRUCTION WORKERS WELFARE CESS ACT, 1996) PIN-686 101.

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R1 TO R3 BY SMT. REKHA C NAIR, GOVERNMENT PLEADER

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 14.12.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).No.31704 OF 2013(K)

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JUDGMENT

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Dated this the 14^th day of December 2020

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Petitioner was served with an order styled as an assessment notice dated 01.11.2013, issued under Section 5 of the Building and Other Construction Workers Welfare Cess Act, 1996 (for short 'the Act'). Apart from challenging Ext.P1 notice, by an amendment, petitioner has also incorporated an additional relief, challenging the validity of Rule 14 of the Building and Other Construction Workers Welfare Cess Rules, 1998 (for short 'the Rules')as unconstitutional and contrary to the spirit of Section 5 and 11 of the Act.

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Petitioner is alleged to have completed construction of a building in Kanjirapally Taluk, consequent to which, liability under the Act is alleged to have arisen. Admittedly, petitioner has not filed a return as contemplated under Section 4 of the Act. According to the petitioner, if there is a failure to file a return under Section 4 of the Act, the remedy available before the Assessing Officer is to issue a notice as contemplated under Section 4(2) and thereafter. Since no such notice has been issued to the petitioner, Ext.P1 assessment order is, according to the petitioner, bad in law.

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WP(C).No.31704 OF 2013(K)

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A counter affidavit has been filed by the third

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respondent stating that a notice was issued for hearing and the petitioner consequent to the notice, appeared and it is thereafter, when the petitioner failed to produce any relevant document within the time allowed, that the spot inspection was carried out on 19.10.2013 consequent to which the impugned order was passed. It was pointed out that the assessment was carried out after inspection and after proper compliance of all procedures. It is further stated that the remedy of a person aggrieved by an order issued under Section 5 of the Act is to prefer an appeal as per the provisions of Section 11 of the Act, read with Rule 4, and that the attempt of the petitioner through this writ petition is to overcome the requirement of depositing the amount assessed for preferring an appeal.

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A reply affidavit is also filed by the petitioner stating that the pre-condition for filing the appeal is not based on any statutory prescription and since the Rules cannot alter, amend or modify the provisions of the statute, the condition insisting upon deposit of the tax assessed as well as the fee equivalent to 1% of the amount in dispute is beyond the powers of delegated legislation. As mentioned earlier, to

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WP(C).No.31704 OF 2013(K)

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support the pleading reply, an amendment was carried out in the pleadings to the writ petition.

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I have heard Adv. Sri. K. A. Hassan as well as

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the learned Government Pleader Smt. Rekha C Nair and I have considered the rival contentions.

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The only point that arises for consideration is whether Ext.P1 is legally valid in the absence of a notice issued under Section 4(2) of the Act. Admittedly, petitioner had failed to file a return after completing construction of the building. Section 4 of the Act reads as follows:-

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“4. Furnishing of returns.- (1) Every employer shall furnish such return to such officer or authority, in such manner and at such time as may be prescribed.

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(2) If any person carrying on the building or other construction work, liable to pay the cess under section 3, fails to furnish any return under subsection (1), the officer or the authority shall give a notice requiring such person to furnish such return before such date as may be specified in the notice.”

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No detailed consideration is necessary to conclude that when an employer fails to file a return under Section 4(1) of the Act, the remedy of an Assessing Officer is to first issue a notice under Section 4(2) of the Act requiring the

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WP(C).No.31704 OF 2013(K)

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employer to furnish a return with necessary details. This is a mandate of the principle of natural justice. The power available under Section 5 of the Act to issue an order of assessment of cess arises only on three occasions. (i) when the employer furnishes a return (ii) When the employer fails to furnish a return on his own but consequent to a notice, employer files the returns, and; (iii) consequent to a notice, the employer fails to file a return. In the instant case, since the employer has failed to file a return, it was necessary for the officer to first issue a notice calling upon him to furnish a return.

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Since, admittedly, no return has been filed by the employer, the second respondent gets authority to pass an assessment order based on a return filed thereafter or without a return, only after issuing a notice calling upon the employer to furnish a return. Failure to issue a notice strikes at the root of Ext.P1 order. Ext.P1 order, therefore, is not legally valid.

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Even though the remedy of appeal is available under Section 11 read with Section 14 of the Act, in the instant case, since the very jurisdiction of the second respondent to pass an order in the nature of Ext.P1 has been questioned and has been found in favour of the petitioner, the question of

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WP(C).No.31704 OF 2013(K)

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filing an appeal does not arise. It is settled law that when an Authority acts beyond the jurisdiction or without authority, this Court can, in exercise of its powers under Article 226 of the Constitution of Indi a, interfere. Accordingly, I quash Ext.P1 leaving it to open to the second respondent to issue a fresh notice under Section 4(2) of the Act and proceed in accordance with law thereafter.

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The challenge on the constitutional validity of Rule 14 of the Building and Other Construction Workers' Welfare Cess Rules, 1998 being only academic in nature in the present case, the same is left open to be agitated in an appropriate case.

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The writ petition is allowed as above.

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Sd/-

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BECHU KURIAN THOMAS

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JUDGE

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WP(C).No.31704 OF 2013(K)

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APPENDIX

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PETITIONER'S EXHIBITS:

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EXHIBIT P1 THE ORIGINAL ASSESSMENT NOTICE DTD.1.11.2013.

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EXHIBIT P2 THE TRUE COPY OF THE APPLICATION FOR TIME TO FILE OBJECTION DATED 20.11.2013.

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EXHIBIT P3 THE ORIGINAL PROCEEDINGS OF THE DISTRICT ASSESSMENT OFFICER DATED 22.11.2013.

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EXHIBIT P4 THE TRUE COPY OF THE APPEAL MEMORANDUM FILED UNDER S.11 OF THE BUILDING AND OTHER CONSTRUCTION WORKER'S WELFARE CESS ACT, 1996.

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EXHIBIT P5 THE TRUE COPY OF THE POSTAL RECEIPT DATED 18.12.2013.

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RESPONDENTS' EXHIBITS: NIL

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//TRUE COPY//

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PA TO JUDGE

K.P.Hayarunnisa v. State of Kerala

Case brief

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K.P.Hayarunnisa v. State of Kerala

Case brief

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