Hon'ble Rohit Ranjan Agarwal,J.
Heard learned counsel for the petitioner and Sri Pankaj Kumar Shukla, learned counsel for the respondents.
The writ petition has been filed to challenge the demand notice dated 05.01.2019 and 02.05.2020. The challenge to the demand has been made mainly on the ground that 1% labour cess was not imposible towards the contract awarded to the petitioner. It was basically for supply of material, thus, no element of labour was involved so as to attract 1% labour cess. It is further stated that even otherwise the petitioner was not liable to pay the duty or tax not specifically mentioned in the agreement/Letter of Intent. Thus, if at all 1% labour cess was imposible, it cannot be recovered from the petitioner. The prayer is accordingly to set-aside the recovery citation impugned in this petition.
We have considered the submissions made by learned counsel for the petitioner and perused the record.
Perusal of Letter of Intent and even pleadings of the writ petition shows that agreement between the parties was not only for supply of material but even erection work. The component of civil work was specifically given in Letter of Intent and thereby 1% labour cess was imposible. The question would be as to whether it has to be borne by the petitioner or to be borne by the respondents. For the aforesaid purpose, we have to refer the Letter of Intent where it has been specifically provided that liability towards taxes and duties would be borne by the petitioner. Clause 3.0 of Letter of Intent is quoted hereunder for ready reference;
"3.0 Taxes & Duties
a) The above prices are inclusive of freight, insurance, taxes and duties and no separate taxes, duties and levies shall be paid extra.
b) The requisite concessional sales tax declaration form 'Form-C' as may be applicable under CST law or State Law shall be provided by UPPTCL s concerned Consignees on request of the Contractor. In no case 'Form-C' shall be furnished through bank."
The price quoted by the petitioner was inclusive of all the taxes and duties and thereby petitioner had agreed to bear all the taxes and duties levied on the work assigned to him. It is thus incorrect to say that petitioner was not liable to pay 1% labour cess rather being statutory liability was required to be borne by the petitioner, in terms of Letter of Intent.
In view of the above and being the matter contractual in nature, we do not find any reason to cause interference in the demand impugned herein. As otherwise pursuant to statutory provisions referred in this petition, 1% labour cess is imposible and the amount aforesaid was not deducted earlier by the respondents and thereby impugned order was passed to recover the said amount.
It is not that the work assigned to the petitioner was composite. In the light of the aforesaid, we find no merit in the writ petition, same is accordingly dismissed.
Order Date :- 17.2.2021 Shekhar