IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN TUESDAY, THE 3RD JUNE 2008 / 13TH JYAISHTA 1930 WP(C).No. 24830 of 2004(E) -------------------------------------- PETITIONER: -------------------- MALABAR HOSPITALS (P) LIMITED,RAJIV GANDHI BY-PASS ROAD, KARUVAMBRAM POST,MANJERI, MALAPPURAM DISTRICT, REPRESENTED BY ITS MANAGING DIRECTOR DR.A.MOIDEEN KUTTY, RESIDING AT AREEKATT HOUSE, KURUPPATH, KONDOTTY, MALAPPURAM DISTRICT. BY ADV. SRI.A.P.CHANDRASEKHARAN (SR.) SMT.PRABHA R.MENON SRI.M.KRISHNAKUMAR RESPONDENTS: ------------------------ 1. THE ASSISTANT LABOUR OFFICER-GRADE I DISTRICT LABOUR OFFICE, MALAPPURAM, THE ASSESSMENT OFFICER, (UNDER THE BUILDING AND OTHER CONSTRUCTION WORKERS WELFARE CESS ACT, 1996). 2 .THE DISTRICT LABOUR OFFICER, MALAPPURAM, APPELLATE AUTHORITY UNDER THE BUILDING AND OTHER CONSTRUCTION WORKERS WELFARE CESS ACT, 1996. 3. THE STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY, SECRETARIAT, TRIVANDRUM. BY SR GOVERNMENT PLEADER SRI.P.N.SANTHOSH - R3 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 03/06/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) NO.24830/2004 APPENDIX PETITIONERS EXHIBITS EXT.P1:- COPY OF THE BALANCE SHEET DT. 31.3.2000. EXT.P2:- COPY OF THE CERTIFICATE ISSUED BY THE REGISTED ENGINEER DT. 11.6.02. EXT.P3:- COPY OF THE NOTICE OF THE ASSESSMENT DT. 22.10.02. EXT.P4:- COPY OF THE RECEIPT EVIDENCING PAYMENT OF ENTIRE AMOUNT BY THE PETITIONER DT. 6.11.02. EXT.P5:- COPY OF THE MEMORANDUM OF APPEAL DT. 23.1.2003. EXT.P6:- COPY OF THE ORDER DT. 30.1.04. /TRUE COPY/ P.A. TO JUDGE tss S. SIRI JAGAN, J. ------------------------------------ W.P.(C)No.24830 OF 2004 ---------------------------------------- Dated this the 3rd day of June, 2008 JUDGMENT The petitioner is a Company who constructed a hospital building. The same was assessed to cess under the Building and Other Construction Workers Welfare Cess Act, 1996. Ext.P3 is the order of assessment by which the cost of construction was fixed as 1,40,15,140/- and the petitioner was directed to pay Rs.1,40,151/- as cess payable under the Act. The petitioner filed an appeal, Ext.P5 before the appellate authority who confirmed the assessment order by Ext.P6 appellate order. The petitioner is challenging Exts.P3 and P6 orders. The only challenge in this writ petition is against the cost of construction fixed for the purpose of calculating cess. The liability is not disputed. The contention of the petitioner is that the 1 st respondent has, instead of himselves assessing the cost of construction independently, he has simply adopted government rates for construction of government buildings, which is clearly unwarranted. According to the petitioner, the amount of Rs.73,37,770/- returned by the W.P.(C) No.24830/04 2 petitioner themselves is the actual cost of construction of the building and the cess ought to have been assessed on that amount only. 2. The learned Government Pleader supported the impugned orders with the help of the counter affidavit filed in the case. 3. I have considered the rival contentions in detail. At the out set I must note one very relevant aspect of the case. The petitioner is a Company registered under the Companies Act. Therefore, they were bound to keep true and correct accounts of the entire expenses for construction of the building. They have not chosen to produce those accounts before either the assessing authority or the appellate authority. That very fact would go a long way in disproving the contentions of the petitioner. The only inference from the non-production of that accounts would be that if produced, it would show that the actual construction costs were much more than what has been assessed by the impugned orders. 4. The contention of the petitioner is that under Rule 7 of the Building and other Construction Workers Welfare Cess Rules W.P.(C) No.24830/04 3 1998, the assessing authority has to authorise such officer to make such enquiry at the work site or from documentary evidence or in any other manner as he may think fit for the purpose of estimating the cost of construction as accurately as possible. The petitioner raises two contentions on the basis of this Rule. First is that the assessing officer is not empowered to make an assessment on his own, but he has to authorise another officer to do so. The second is that the assessing officer is bound to estimate the cost of construction as accurately as possible and cannot simply make estimates based on government rates. According to the petitioner, both have not been done in this case. I am not impressed by the contentions made by the counsel for the petitioner. If an assessing officer can authorise another person, he can certainly do it himself. In the absence of any accounts produced by the petitioner themselves, the assessing officer can only make an assessment based on materials available to him. It may not be as accurate as the actual cost of construction. But in the absence of the accounts of the petitioner, the assessing officer decided to measure the plinth area and calculate the cost of construction based on the W.P.(C) No.24830/04 4 government rates for that area. It is common knowledge that the government rates are the lowest on construction costs since the Government always tries to get their buildings constructed for the lowest cost possible. Therefore, I do not find anything wrong in the assessing officer making the assessment of the cost of construction of the petitioner’s building based on the plinth area and the rates approved by the Government which is the only way the assessment can be made as accurately as possible in the absence of accounts maintained by the petitioner themselves. In the above circumstances, I do not find any merit in this writ petition and accordingly the same is dismissed. S. SIRI JAGAN, JUDGE Acd