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Greenko Budhil Hydro Power Pvt. Ltd. v. State of H.P. & Ors

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Greenko Budhil Hydro Power Pvt. Ltd. V. State of H.P. & Ors.; CWP No. 8493 of 2010; Himachal Pradesh High Court says the imposition and demand of cess is untenable even where the factories act applies!

The application is allowed being not opposed.

1. Greenko Budhil Hydro Power Private Ltd., Plot No.4, Software Units Layout, HITEC City, Madahapur, Hyderabad, Telangana, through Mr. Vinod Thakur, Assistant Manager is ordered to be impleaded as petitioner in place of original petitioner namely Lanco Budhil Hydro Power Ltd. (formerly known as Lanco Green Power Pvt. Ltd.,) with its registered office at; Lanco House No.141, L.V. Prasad Marg, Banjara Hills, Hyderabad-

2. All these petitions are being decided by a common judgment as common questions of facts and law are involved.

3.The Petitioners in all the petitions are generating companies as defined in Section 2(28) of the Electricity Act, 2003. They own their respective generating stations, which have been constructed during different periods of time.

4. The Labour Officer-cum- Cess Collector-cum-

Assessing Officer (Under the Building and other Construction Workers Welfare Cess Act, 1996) raised demands for labour cess against the petitioners in terms of Section 3 of the said Act. Petitioners have disputed such demands on the following grounds:-

(I) The petitioners are covered under the provisions of Factories Act (63 of 1948). Since, Section 2(d) of Building and other Construction Workers (Regulation of employment and conditions of services) Act, 1996 (for short “Construction Workers Act”) exempts such building and construction work to which the provisions of Factories Act, 1948 applies, the imposition and demand of cess was untenable.

(II) The demand for cess amount prior to 04.12.2008 was of illegal as the Himachal Pradesh Building and Other Construction Workers Welfare Board was constituted by the State of Himachal Pradesh on 02.03.2009 with retrospective effect from 04.12.2008.

(III) The levy of cess on the total project cost was against the provisions of Cess Act. According to petitioners, the cess was leviable only on the cost of construction component of the projects.

(iv) The provisions contained in Rule 14(b) of the Cess Rules mandating pre-deposit of entire demanded amount for maintaining the appeal was bad in law.

5. The petitioners in some of the petitions have assailed the assessment order(s) passed by the Assessing Officer under Cess Act and in some of the petitions, the respective petitioners had taken recourse to the remedy of appeal before the Appellate Authority under the Cess Act and having remained unsuccessful have approached this Court for assailing the orders passed by the Appellate Authority.

Nonetheless, the grounds of challenge, as noticed above, remain the same.

6. The respondents have contested the claims of of petitioners and have supported the orders under challenge before this Court passed either by the Assessing Officer or by  the Appellate Authority.

7. I have heard learned counsel for the parties and have also gone through the record carefully.

8. At the very outset, learned counsel for the petitioners have fairly conceded that the legal position in respect of first two claims noticed hereinabove stands settled by the pronouncements made by the Hon’ble Supreme Court in A. Prabhakara Reddy and Company vs. State of Madhya Pradesh and others, (2016)1 SCC 600 and LANCO Anpara Power Limited vs. State of Uttar Pradesh & Ors., (2016)10 SCC 329.

9. In light of above discussion, the petitions are disposed of by setting aside all the orders passed by the  Assessing Officer(s) or the Appellate Authority(ies) under the Cess Act against the petitioners with direction to the  Assessing Officer(s) to reassess the leviable cess against the petitioners strictly in the light of judgment passed by the Hon’ble Supreme Court in Uttar Pradesh Power Transmission Corporation Limited and Another vs. CG Power and Industrial Solutions Limited and Another, (2021)6 SCC 15. The entire exercise will be done by the Assessing Officer(s) within three months from the date of passing of this order. The petitioners are directed to effectively associate themselves in the process of assessment by the Assessing Officer(s), if so required, by the said authority.

10. In view of the above order, liberty is reserved in favour of the petitioners to withdraw their claim No.4 for the time being and to seek appropriate legal remedy in respect thereof at appropriate stage, if so advised.

11.  All the petitions are disposed of accordingly, so also, the pending applications, if any.


The Hon’ble Mr. Justice Satyen Vaidya, Judge.

CMP No. 14132 of 2021 in CWP No. 8493 of 2010.


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