M/S. DEWAN CHAND BUILDERS & CONTRACTORS. versus UNION OF INDIA & ORS.

M/S. DEWAN CHAND BUILDERS & CONTRACTORS. versus UNION OF INDIA & ORS.

The cess levied under the Building and Other Construction Workers Welfare Cess Act, 1996 is a fee and not a tax. The levy is for the welfare of construction workers, funds are appropriated for a specific purpose and not merged into public revenues, and there is a reasonable nexus satisfying quid pro quo. The Acts are constitutionally valid and within the competence of Parliament.

Parties
Appellant: M/S. Dewan Chand Builders & Contractors; Respondents: Union of India & Ors.
Jurisdiction
India
Judgment Date
18 November 2011
Procedural Posture
Civil Appeal / Judgment on Constitutional Validity, Post Appeal From High Court
Outcome
Appeals dismissed
Legal Topics
Fee Versus Tax, Levy of Cess, Welfare Measures for Construction Workers, Competence of Parliament
Constitutional Law Labour Law Fee Versus Tax Levy of Cess Welfare Measures for Construction Workers Competence of Parliament

Case Brief

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Parties

M/S. Dewan Chand Builders & Contractors

Appellant

Union of India & Ors.

Respondents

Procedural Posture

Civil Appeal / Judgment on Constitutional Validity, Post Appeal From High Court

Legal Issues

  1. 1 Whether the cess levied under the Building and Other Construction Workers Welfare Cess Act, 1996 is a 'fee' or a 'tax'
  2. 2 Constitutional validity of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 and Welfare Cess Act, 1996

Ratio Decidendi

The cess levied under the Building and Other Construction Workers Welfare Cess Act, 1996 is a fee and not a tax. The levy is for the welfare of construction workers, funds are appropriated for a specific purpose and not merged into public revenues, and there is a reasonable nexus satisfying quid pro quo. The Acts are constitutionally valid and within the competence of Parliament.

Court Disposition

Appeals dismissed

Orders

  • All appeals dismissed with costs quantified at Rs. 25,000/- in each set of appeals