Rajasthan High Court Stays Cess Demand Against Hotelier, Who Is A Subsequent Purchaser
The Rajasthan High Court has stayed the cess demand against the hotelier, who was the subsequent purchaser.The bench of Justice Arun Monga acknowledged the fact that the cess can be levied only on the original owner, and the petitioner/assessee, being the subsequent purchaser, cannot be fastened with past liability.The petitioner/assessee, along with his two partners, purchased a property...
The Rajasthan High Court has stayed the cess demand against the hotelier, who was the subsequent purchaser.
The bench of Justice Arun Monga acknowledged the fact that the cess can be levied only on the original owner, and the petitioner/assessee, being the subsequent purchaser, cannot be fastened with past liability.
The petitioner/assessee, along with his two partners, purchased a property in Rajsamand from one Jagdish Agarwal in 2019. The property was also constructed by the predecessor in interest, Jagdish Agarwal, and a show cause notice was issued to him on February 17, 2022, by the Labour Welfare Officer, Cum Cess Assessment Officer, Department of Labour.
A cess assessment order was issued to the petitioner by the cess assessment officer without providing a reasonable opportunity of a hearing, and further, a notice was issued by the sub-divisional officer based on unreasonable demands of cess and interest under the Building and Other Construction Workers Welfare Cess Act, 1996.
The petitioner contended that, as per the statutory scheme of the Building and Other Construction Workers Welfare Cess Act, 1996, the cess is to be levied on the construction itself, and thus, only the original owner can be held liable. However, the recital of the sale deed makes it abundantly clear that the entire property was not constructed by the petitioner.
The petitioner stated that the Cess Assessment Officer issued a show-cause notice to the predecessor in the interest of the petitioner (the original owner), and without issuing a show-cause notice to the petitioner, passed the assessment order in violation of the principles of natural justice. The property was purchased by the petitioner in 2019. Even after that, a show cause notice was issued to the predecessor in interest. Hence, even the respondents knew that only the original owner was liable, not the petitioner.
The court issued the notice, returnable on December 13, 2023.
“In the meantime, no coercive action shall be taken against the petitioner qua the recovery in question,” the court ordered.
Counsel For Petitioner: Avin Chhangani
Counsel For Respondent: None
Case Title: Khum Singh Balla Versus State Of Rajasthan
Case No.: S.B. Civil Writ Petition No. 17572/2023