- (1.) Petitioners, who are 26 in numbers had entered into a contract with the Aligarh Muslim University, Aligarh on a date subsequent to February, 2009. The petitioners before this Court seek quashing of letters dated 9.11.2013 and dated 25.12.2013 where under while making the payment of the work done by the petitioner under the contract, 1% labor cess has been deducted with effect from February, 2009 onwards from the contractors bill. Sri R.P. Mishra, learned counsel for the petitioners submitted before this Court that at the time of entering into the contract the Aligarh Muslim University had not disclosed in the tender notice or otherwise that the bidders would be liable to pay Labor cess at the rate of 1% and therefore, the petitioners had not included the impact of labor cess in the price quoted by them in response to the tender. It is pointed out that Aligarh Muslim University under office memo dated 9th February, 2013 has decided to adopt the Building and Other Construction Workers' Welfare Cess Act, 1996 and therefore, it is only from a date subsequent to 9th November, 2013 liability of labor cess can be raised/demanded from the petitioner contractors. He further submits that under the terms and conditions agreed upon between the parties there is no provision for levy of labors cess. The demand impugned is wholly unjustified. Therefore, it is prayed that the respondents may be restrained from making any deduction from the bill of the contractor to the extent of 1% as labor Cess.
(2.) Learned counsel for the Aligarh Muslim University, Aligarh on the contrary submits that the terms and conditions as agreed upon between the parties with open eyes, under Clause-6 of the preamble to the schedule of quantity specification, (which is a part of the contract entered into between the parties). Contemplates, that prices quoted shall include royalty, monopoly charges, and any other taxes levied by the Government or local bodies except where stated otherwise in the contract.
(3.) He explains that the Building and Other Construction Workers' Welfare Cess Act, 1996 was adopted by the State of U.P. with effect from 2009. Therefore, in view of Clause-6 referred to above the component of labor cess being included in the price offered by the petitioners logically follows being in the nature of tax. The University is justified in making the deduction of 1% of the labor cess from the contractors bill towards such tax liability.;