LexALLAHABAD CANNING CO. versus UNION OF INDIA
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ALLAHABAD CANNING CO.
v.
UNION OF INDIA
July 24, 198-1
[P.N. Bfi.\GWATI, A\L\RENORA NATH SEN AND RANGANATH
l\l!SRt\ 1 JJ.}
207
.
[.rvy Sugar Price Equa/i.tation Ftcnd Act, 1976- Pro•iso 10 s. 6 (0-Whtn
ortrodtd--Sc<>pe of.
Section 3 ( 1) of the Levy Su~ar Price Equali.<ation Fund Act, 1976 csla-
bl'shei! ~fund known as th~ Le•·y SugH Price Equali_,.tion Fund. Sub-sec.
(2) of ~c'ion ) l'"o,·idcd thai I here shnll be cn~dited to the fund amoums
repr~nt;~~ all ~,c,,_s rcali<ations made by the manufaclurers. Section 6 (I)
pro,·ided that .. ·here any amount of e•cc""' realisation was credited to th~
Fund, the buyer of levy ~u~:~r from whom such e~ccs~ r~Jiisation "'as made by
the =n~factu...:n ~hall be entitled t(' the rd'und of such cx~,s rellis1lion
rroru the Fund. Tho-rewa< a proviso to se.:tion 6 (I) "'hich inter a lin pJecluded
bu)"ers of kvY wgar to claim refund of eXC<".is realisation in certain cases. The
app.::ll.nts. who carried on the busincs' of manufacture or syrups, squashes,
i•m~ and jellieY, preservation o( v<:<CI' 'bc~ and other food products and from
.-bc>m C.IICC<~ real's:~tion w~1 m1d<' and cn:dited to the Fund, appl'ed ro•
rclund o( such relis"<tioo.
The Central Government rejected the appellants'
•pplication for refund on the ~round th~t they had not been able lo establish
fully and d<ar!y 1hat 11te mciJI."ncc o( higher sugnr price wn~ not rassed on by
IMmto1h~ con~urncr, of the end products. The arpdJnnts preferred a writ
Ptti• ion wh'ch was diwliso.:d by the High Court on the ~,me around. Hence
thiuppeaJ by spetlul kavc.
.
Allowina the appeal,
· . . .HELD :The provl'o on · 11, !)bin term~ apJ'Iit$ only wl1eic the pnrty
~';.
01
'01 refund of tl1e amount <lf ell~ e.~ realisation It 11 wholc~afe or a retail .
lcr 111·hu has ras..,d on the illcldcn~e oft he exce-;s owr tho controlled price ·
or~ suillr 10 tho r~tail dtai~'T or to tho ~muumet, u the case mny be. The
:a~w obviou~ly •~nnot ap,lly to a c:~J~G ~~rhcrc a clAim f(lr refund fins b<-en
th
• by a ~on,um« ur aua.,r from wiHlltl e~~ T<111i!lation h,,, been made by
e_m~nu~actureror tll£»t.ttU6C-D)
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ln !he ln,~nt '•~the ~~llant~ ~ro admittedly consumeu ur suw .
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208
~UPREMI? COURT REPORTS
(1985] [ S C.R,
and not dealers in sugar and since they w~ro. not ~calers in sugar, there could
be no quest;00 of any incident<! of c.<ecss be on~ passed on by them to the reuil
dealer or to the consumrr. (1060] ·
The proviso to section 6 (I) contemplates a case where a de~lcr-,.hether
wholesolc or retail~ells sugar to a retail dealer or consumer os. the case m•y
be and not where 8 pcr.on ...:11~ a mnnufacturcd product contoon~ng sugar 01
one of its ingredients. [J06G]
in the inslnnt C3SC the appellants sold manuf~ctured PrOdUc't COD'"inong
su~or a. one of its ingredient. Therefore, tile proviso to section 6 (I} was ?ot
attracted and the opp:l I ants were entitled to cia 1m reru nd or the excess reah,..
tion from the Fund. [106HJ
Crvtt, APratATE JL•RtSD!CTloN : Civil Appeal No. 14&7 of
1984;
Appeal by Special leave from the Judgment and Order dated
the 21st August, 1981 of the Allahab:td High Court in Civil Mise,
Wnt Petition No. 9820 of 1981
Hurbans Singh for the nppel!ant'.
Abdul KadPr and G.S. Narayanan for the Respondent.
The Judgment of the Court was delivered by
BHAOWATt,J. This is an appeal by Special Leave directed
against an order of the High Court of Allahabad dbmissing a
writ
petition filtd by tlte appellants claiming refund of a sum of Rs.
22681.88 from the L~vy Sugar Price Equalisari.,n Fund under Sec·
tion 6, sub·s(ction (I) of the Ltvy Sugar Price Equallsauon Fuod
Act, 1976 (hereinafter r~fcrred to as the Equali.sation Fund Act).
The facts of the ca.e are few .tnd '""Y b~ briefly stated as follows:
The app~llaots carry on business of manufacture of syrups,
squashes, j"rns and jellies, prescrv,1tion of l'cgt·tabk-s and other (O()d
product~. One of the essential raw materials for
the'o products
manufactured by the appellanh is sugar. Ther.i was ut the ·material
time Sugar Control Order· t966 · issued unlkr S. 3 of the Ess~ntial
Commotlitie! Act, 19SS,' cl<tusc 4 of which provided thnt no purcha~
ser ~hall ~ell or C@ree to sell or oth~rwi'se di,'posc of sugar or deExcerpt shown. Read the full judgment & AI analysis in Lexace.