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

Citation: [2011] 13 S.C.R. 214 · Decided: 18-11-2011 · Supreme Court of India · Bench: D.K. JAIN · Disposal: Dismissed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
8 
[2011) 13 (ADDL.) S.C.R 214 
M/S. DEWAN CHAND BUILDERS & CONTRACTORS. 
v. 
UNION OF INDIA & ORS. 
(Civil Appeal No. 1830 of 2008) 
NOVEMBER 18, 2011 
[D.K. JAIN AND ASOK KUMAR GANGULY, JJ.] 
The Building and other Construction Workers Welfare 
Gess Act, 1996 -
The Building and other Construction 
C Workers (Regulation of Employment and Conditions of 
Service) Act, 1996 - Constitutional validity of - Gess levied 
under the Scheme of the Gess Act - 'Fee' or 'Tax' - Held: Is 
a fee and not a tax - Gess on the cost of construction incurred 
by the employers on the building and other construction works 
D is for ensuring sufficient funds for the Welfare Boards to 
undertake social security schemes and welfare measures -
Funds, so collected is set apart for the benefit of the building 
and construction workers; appropriated specifically for 
performance of specified purpose and is not merged in the 
E public revenue for the benefit of the general public - Nexus 
between the cess and the purpose for which it is levied is 
established, satisfying the element of quid pro quo in the 
scheme - Thus, the said Acts are constitutionally valid and 
within the competence of Parliament as levy under the 
F impugned enactments is a fee referable to Entry 97 of List-I, 
Seventh Schedule of the Constitution - Quid pro quo -
Maxims. 
The Building and other Construction Workers 
(Regulation of Employment and Conditions of Service) Act, 
G 1996 -
The Building and Other Construction Workers 
(Regulation of Employment and Conditions of Service) 
Central Rules, 1998 - The Building and Other Construction 
Workers Welfare Gess Act, 1996 - The Building and Other 
Construction Workers Welfare Gess Rules, 1998 - Object of 
H 
214 
DEWAN CHAND BUILDERS & CONTRACTORS v. 
215 
UNION OF INDIA & ORS. 
the enactments - Held: Is to regulate the employment and A 
conditions of service of building and other construction 
workers, traditionally exploited sections of the society and to 
provide for their safety, health and other welfare measures. 
Tax or Fee - Determination of the character of a levy -
B 
True test - Held: Is the primary object of the levy and the 
essential purpose intended to be achieved. 
Writ petitions were 
filed 
challenging 
the 
constitutional validity of the Building and other 
Construction Workers (Regulation of Employment and 
C 
Conditions of Service) Act, 1996; the Building and Other 
Construction Workers (Regulation of Employment and 
Conditions of Service) Central Rules, 1998; the Building 
and Other Construction Workers Welfare Cess Act, 1996; 
and the Building and Other Construction Workers 
D 
Welfare Cess Rules, 1998. The High Court held that the 
said Acts and the Rules are constitutionally valid and 
within the competence of the Parliament as the levy 
under the impugned enactments is a "fee", referable to 
Entry 97 of List-I of the Seventh Schedule of the 
E 
Constitution. Aggrieved, appellant-contractor engaged in 
building and other construction works, filed the instant 
appeals. 
The question which arose for consideration in the 
instant appeals was whether the cess levied under the 
F 
scheme of the Building and Other Construction Workers 
Welfare Cess Act, 1996, was a 'fee' or a 'tax'. 
Dismissing the appeal, the Court 
HELD: 1.1 It is clear from the scheme of the Building 
and other Construction Workers (Regulation of 
Employment and Conditions of Service) Act, 1996 for 
short the 'BOCW' Act that its sole aim is the welfare of 
building and construction workers, directly relatable to 
G 
H 
216 
SUPREME COURT REPORTS (2011] 13 (ADDL.) S.C.R. 
A their constitutionally recognised right to live with basic 
human dignity, enshrined in Article 21 of the Constitution 
of India. It envisages a network of authorities at the 
Central and State levels to ensure that the benefit of the 
legislation is made available to every building and 
B construction worker, by constituting Welfare Boards and 
clothing them with sufficient powers to ensure 
enforcement of the primary purpose of the BOCW Act. 
The means of generating revenues for making effective 
the welfare provisions of the BOCW Act is through the 
C Building and Other Construction Workers Welfare Cess 
Act, 1996 (for short the CESS Act) [Paras 5 and 6] [223-
H; 224-A-C] 
1.2 The Statement of Objects and Reasons to the 
BOCW Act explained that it had been considered 
D "necessary to levy a Cess on the cost of construction 
incurred by the employers on the building

Excerpt shown. Read the full judgment & AI analysis in Lexace.