Case BriefsHigh Courts

Meghalaya High Court: A Division Bench comprising of Mohammad Yaqoob Mir, CJ and S.R. Sen, J. dismissed a petition on being infructuous.

The Advocate General A. Kumar has submitted that the Meghalaya Clinker Cess Act, 2015 has been repealed by the Meghalaya Goods and Services Tax Act, 2017; consequently, there was no recovery and no question of refund. He contended that the petition cannot hold shall be dismissed as infructuous. The counsel for the petitioner, A. Saraf has prayed for declaring the Meghalaya Clinker Cess Act, 2015 to be ultra vires and further levy of cess on the manufactured clinker produced in the State shall be beyond the legislative competence of the respondent who shall then be restrained from realizing cess on the manufactured clinker under the above said Act.

The Court considering the status of the Act dismissed the petition on being infructuous. [Star Cement Meghalaya Ltd. v. State of Meghalaya, 2018 SCC OnLine Megh 268, decided on 07-12-2018]

Case BriefsHigh Courts

Gauhati High Court: A Division Bench comprising of A.S. Bopanna, CJ. and Arup Kumar Goswami, J. interpreted the meaning of ‘Agricultural Produce’ of Assam Agricultural Produce Market Act, 1972.

The appellants were levying a cess on Mustard Oil imported from outside the State of Assam which was contended by the respondents to be unjustified and accordingly they sought for a refund of the amount collected by the respondent as cess.

The appellant here referred to the Section 2(1)(i) of Assam Agricultural Produce Market Act, 1972, which defines “Agricultural Produce” and if interpreted would include agricultural produce and as Mustard Seed was included in the Schedule at entry (IV) then its oil shall also be treated the same. Even ‘trade’ and ‘processing’ combines both processed and non-processed product thus bringing it under the ambit of agricultural produce. Alternately the respondent cannot be given the refund ordered as the cess burden was transferred by the respondent upon the end user and hence was unjustified.

Now the question arose whether Mustard Oil could be subjected to levy of cess without the same being included in the Schedule. It was answered by the case of State of Rajasthan v. Rajasthan Agriculture Input Dealer’s Assn., (1996) 5 SCC 479, according to which cess could only be levied on mustard seed and not on mustard oil as it was not considered as an agricultural produce. Further, regarding the refund, the Court considered it to be unjust enrichment upon the appellant as it was collected from the end user and could not be direct to be repaid to the appellant.

Accordingly, the appeal was partly allowed.[Assam State Agricultural Marketing Board v. Tinsukia Trading Co. (P) Ltd.,2018 SCC OnLine Gau 1581, decided on 08-11-2018]

Case BriefsSupreme Court

Supreme Court:

“Construction workers do not assist only in building infrastructure, but they also assist in building the nation, in their own small way.”

After it was brought to the notice of the bench of Madan B. Lokur and Deepak Gupta, JJ that under the Building and Other Construction Workers‘ Welfare Cess Act, 1996, more than Rs. 37,400 crores have been collected for the benefit of construction workers, but only about Rs. 9500 crores have been utilized ostensibly for their benefit, the Bench issued various directions after stating:

“No State Government and no Union Territory Administration (UTA) seems willing to fully adhere to and abide by (or is perhaps even capable of fully adhering to and abiding by) two  laws solemnly enacted by Parliament, namely, the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 (the BOCW Act) and the Building and Other Construction Workers‘ Welfare Cess Act, 1996 (the Cess Act).”

The Court, hence, asked the Ministry of Labour and Employment, the State Governments and the UTAs to:

  • put in place and strengthen the registration machinery, both for the registration of establishments as well as registration of construction workers at the earliest.
  • establish and strengthen the machinery for the collection of cess.
  • frame one composite Model Scheme for the benefit of construction workers in consultation with all stakeholders including NGOs who are actually working at the grassroots level with construction workers. The scheme should include within it, inter alia, issues and concerns of education, health, social security, old age and disability pension and other benefits that are necessary for living a life of dignity as postulated by the Constitution of India.
  • conduct a social audit on the implementation of the BOCW Act so that in future there is better and more effective and meaningful implementation of the BOCW Act.

The Court also issued certain general directions for the implementation of the BOCW Act:

  • Every State Government and UTA shall constitute a State Advisory Committee, if not already constituted.
  • Every State Government and UTA shall constitute an Expert Committee and frame statutory Rules under Section 62 of the BOCW Act, if such statutory Rules have not already been framed.
  • The State Governments and UTAs must appoint Registering Officers for registration of establishments and construction workers.
  • Every State Government and UTA should establish a Welfare Board in terms of Section 18 of the BOCW Act. It must be appreciated that this is not a body that can be created by an executive order. The law requires that the Welfare Board shall be a body corporate having perpetual succession and a common seal.
  • Every State Government and UTA should establish a Welfare Fund for the benefit of the construction workers, with appropriate rules for utilisation of the funds.
  • all construction workers should be given identity cards and should be registered in terms of Section 12 of the BOCW Act.
  • The Ministry of Labour and Employment shall actively consider
  • making available to the construction workers the benefits of The Maternity Benefit Act, 1961 and The Minimum Wages Act, 1948, The Employees‘ State Insurance Act, 1948, the Employees‘ Provident Funds and Miscellaneous Provisions Act, 1952, as well as (to the extent possible) the Mahatma Gandhi National Rural Employment Guarantee Act, 2005.
  • The Ministry of Labour and Employment should also consider whether projects of the Government of India in the railways, defence and other establishments are brought within the purview of the BOCW Act.
  • The Monitoring Committee which has had quite a few meetings so far should pro-actively ensure full compliance of the provisions of the BOCW Act, the Cess Act and the directions issued by this Court.

The Court asked the Union of India to take a decision on the management of the cess already collected. Noticing that the benefits and entitlements that have accrued to the construction workers cannot be passed on to them due to the passage of time, with the whereabouts of some of them not known. Accordingly, a decision will have to be taken by the Union of India on the gainful utilization of the cess already collected so that the Welfare Boards are not unjustly enriched – the beneficiaries having unfortunately lost out. [National Campaign Committee for Central Legislation on Construction Labour v. Union of India, 2018 SCC OnLine SC 236, decided on 19.03.2018]