In Brief
The Supreme Court dismissed a Special Leave Petition by Uttar Pradesh Power Transmission Corporation (UPPTCL) challenging the Allahabad High Court's order which set aside demands for labour cess of Rs 2.6 crores from CG Power and Industrial Solutions Limited. The issue concerned whether cess under the Building and Other Construction Workers' Welfare Cess Act applies to a pure supply contract for equipment and materials. The Court held that a supply contract, not involving construction work, is exempt from cess liability. Moreover, even if cess were leviable, it must be assessed and collected through statutory procedures prescribed in the Act and Rules, not by unilateral action like withholding bank guarantees. The Court rejected reliance on CAG audit findings without proper adjudication.
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