R. 14(2)(b) of Building & Other Construction Workers Welfare Cess Rules, 1998 ultra vires the provisions of S. 11 Building and Other Construction Workers Welfare Cess Act, 1996
Labour Commissioner, the Appellate Authority constituted under the Building and Other Construction Workers Welfare Cess Act, 1996, gave an order dated 05.08.2013 dismissing the appeal of the Petitioner on the ground that Petitioner failed to deposit 100% of cess, penalty and interest as a precursor to the appeal getting admitted. According to the Appellate Authority, the appeal was not viable, as it did not comply with the provisions of Rule 14(2) of the 1998 Rules. The order was challenged before the Delhi High Court along with the challenge laid to the vires of Rule 14 of the Building & Other Construction Workers Welfare Cess Rules, 1998. The core issue, which arises for consideration is, whether the petitioner could have been called upon to pay 100% of cess, penalty and interest, for progressing its appeal, which was filed before the Appellate Authority?
The Petitioner contended that the provisions of Rule 14(2)(b) of the 1998 Rules are beyond the provisions of Section 11 of the 1996 Act. Section Section 11 of the 1996 Act prescribes for deposit of fees while instituting the appeal, and not cess and penalty.
The Court began by examining the width and scope of Section 11 of the 1996 Act with the background of the settled position that the rule making authority cannot frame a rule, which is beyond the power conferred under the 1996 Act. As per section 11(2) of the 1996 Act, “[e]very appeal preferred under sub-section (1) shall be accompanied by such fees as may be prescribed”.
As per Rule 14(2)(b) and (c) of the 1998 Rules, the appeal shall be accompanied inter alia with — “a certificate from the cess collector to the effect that the amount of cess or penalty or both, as the case may be, relating to such appeal has been deposited” and “a fee equivalent to one per cent, of the amount in dispute or penalty or both, as the case may be, under such appeal”. The Court concluded that the provision made in sub-clause (b) of sub-rule (2) of Rule 14 of the 1998 Rules is clearly beyond the provisions of Section 11(2) of the 1996 Act.
