SHREE DIGVIJA Y CEMENT CO. LTD. AND ANR. versus UNION OF INDIA AND ANR.

Citation: [2002] SUPP. 5 S.C.R. 268 · Decided: 17-12-2002 · Supreme Court of India · Bench: Y.K. SABHARWAL · Disposal: Appeal(s) allowed

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Judgment (excerpt)

A 
B 
SHREE DIGVIJA Y CEMENT CO. LTD. AND ANR. 
v. 
UNION OF INDIA AND ANR. 
DECEMBER 17, 2002 
[Y.K. SABHARWAL AND H.K. SEMA, JJ.] 
Cement Control Order, 1967/lndustries (Development and Regulation) 
Ac/, 1951-Clause 9A I Section 18-G-Contribution by cement manufacturer 
C to Cement Regulation Account in respect of non-levy cement-Validity of-
Held, invalid and ultra vires Section 18-G-Levy amounts to tax without 
authority of law-Non-levy cement not covered by the Order-Subordinate 
legislation has no power to impose levy on cement not covered by the Order-
However, manufacturers not entitled lo claim refund as the burden was passed 
on to the customers-Doctrine of unjust enrichment. 
D 
The operation of Cement Control Order, 1967 brought certain 
problems affecting the cement industries. Hence, cement was partially 
decontrolled and cement manufacturers were required to pay certain 
amount to Cement Regulation Account on production of levy as well as 
non-levy cement. Appellant-manufacturers of Cement filed writ petitions 
E in High Court challenging validity of Clause 9A of Control Order, which 
required payment on non-levy cement, on the ground that amount payable 
under the Clause was in the nature of tax and there was no authority of 
law to impose that tax. The Writ petitions were dismissed. 
In appeal to this Court appellant contended that the payment under 
F Clause 9A constitutes levy and collection of tax without authority of law; 
that Clause 9A is ultra vires Section 18G of Industries (Development and 
Regulation) Act, 1951; that no tax could be imposed by any subordinate 
legislation unless principal statute specifically authorized such imposition; 
and that the Act did not authorize levy and recovery of any such tax and, 
G therefore clause 9A was ultra 1·ires the Act. Appellants also claimed refund 
of the amount paid. 
Allowing the appeals, the Court 
HELD: I.I. The impugned levy under Clause 9A of Cement Control 
H 
268 
SHREE DIGVIJA Y CEMENT CO. LTD. v. U.0.1. 
269 
Order, 1967 is a compulsory exaction. The amount paid by the customers A 
of non-levy cement belongs to the appellants. Such a levy amounts to levy 
of tax and, therefore, invalid for want of sanction to levy such a tax. Clause 
9A is, therefore, ultra vires Section 18G of Industries (Development and 
Regulation) Act, 1951. To this extent the impugned judgment of the High 
Court is set aside. (284-DI 
1.2. There is no control on price of sale of the non-levy cement. 
Except Clause 9A, no other clause of the Control Order, is applicable to 
non-levy cement. There is no sale price, there is no retention price and 
B 
the manufacturers are free to sell the non-levy cement at whatever price 
they like. There is no power in the subordinate legislation to impose levy C 
on that cement which is not covered by the Control Order. (284-A-BI 
1.3. Though it is true that in taxing legislation, legislature deserves 
greater latitude and greater play in joints, this principle, however, cannot 
be extended so as to validate a levy which has no sanction of law, however, 
laudable may have been the object to introduce it and howsoever laudable D 
may have been the purpose for which the amount so collected may have 
been spent. (284-B-q 
Union of India and Ors. v. Hindustan Aluminium Corporation limited 
and Anr., AIR (198,3) Cal. 307 and R.D. Aggarwala and Anr. v. The Union 
of India and Anr. ILR 1974 2 Delhi 520, distinguished. 
E 
A Venkata Subba Rao v. State of Andhra Pradesh, (19651 2 SCR 577, 
referred to. 
Attorney General v. Wilts United Dairies, (1922 (91) Law Journal 
Reports (Kings Bench) 897; Attorney General for New South Wales v. F 
Hoimebush Flour Mills Ltd, 56 C.L.R. 390 at 400; lower Mainland Dairy 
Products Sales Adjustment Committee v. Crystal Dairy ltd., 1933 AC 168, 
referred to. 
2.1. The principles of unjust enrichment are applicable in claim of 
refund. The claimant has to allege and establish that he has not passed G 
I 
on the burden to another person. Where the burden of duty has been 
passed on, the claimant cannot say that he has suffered any real loss or 
prejudice. Real loss or prejudice is suffered in such a case by the person 
who has ultimately borne the burden and it is only that person who can 
legitimately claim its refund. But where such person does not come H 
270 
SUPREME COURT REPORTS (2002] SUPP. 5 S.C.R. 
A forward or where it is not possible to refund the amount to him for one 
or the other reason, it is just

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