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CASE NO.: Appeal (civil)  46 of 1993

PETITIONER: Shree Digvijay Cement Co. Ltd. & Anr.

RESPONDENT: Union of India & Anr.

DATE OF JUDGMENT: 17/12/2002

BENCH: Y.K. Sabharwal & H.K. Sema.

JUDGMENT:

J U D G M E N T

[With CA Nos. 45, 47 and 48 of 1993]

Y.K. Sabharwal, J.

       The appellants are cement manufacturers.  They challenge the legality and validity o f Clause 9A of the Cement Control Order 1967 (for short, ’the Control Order’).  Clause 9A an d some other clauses were incorporated by amendments made in the Control Order in the year 1 982.  Clause 9A requires every producer to pay to the Cement Regulation Account (for short,  ’CRA’) an amount at the rate of Rs.9/- per metric tonne of production of non-levy cement.  T his payment to be made by the producer on production of non-levy cement was withdrawn on 15t h December, 1986.  One of the manufacturers (Andhra Cements) filed the writ petition in the  High Court challenging the validity of the clause in September 1986; two of them (Mysore cem ent and Raymond Woolen) filed writ petitions in 1987 and Digvijay Cement in the year 1992.   Their principal contention before the High Court was that the amount payable under Clause 9A  was in the nature of tax and there was no authority of law to impose that tax.  Undoubtedly , no tax can be levied or collected except by authority of law.  The contention of the writ  petitioners did not find favour with the High Court and, therefore, these appeals were filed  on grant of leave.         Cement is a schedule industry under the provisions of the Industries (Development an d Regulation) Act, 1951 (for short, the ’Act’).  Section 18G of the Act, inter alia, empower s the Central Government to provide for regulating the supply and distribution of any articl e relatable to any schedule industry.  The acute shortage of cement in the country resulted  in the making of the Control Order in exercise of powers conferred by Sections 18G and 25 of  the Act.  The cement manufacturing units in India were located in different places.  Some o f the units manufacturing cement were located at a long distance from consumption centres.   A huge amount on freight had to be incurred in transporting the cement from various factorie s to the market.  The manufacturing cost varied depending upon the age of the unit, manufact uring process and technology utilized etc.      The transportation cost varied considerably  depending upon the location of the unit.  In the Control Order a mechanism was devised for e qualizing the freight cost on the cement.  An equalization account was provided for in the C ontrol Order.  Different ex-factory retention prices were provided in respect of various cem ent manufacturing units keeping their varying cost of production.  It provided for the manuf acturer to get a retention price to cover his cost and yield a reasonable return to the manu facturer.  A uniform FOR (free-on-rail) destination price for cement was fixed in respect of  the whole of India irrespective of the distance over which the cement had to be transported .  The excess of FOR destination price realized by a cement manufacturer over his retention  price, subject to certain adjustments, had to be paid by the cement manufacturers into the C ement Regulation Account (CRA).  In cases where freight actually incurred was in excess of t he specified amount, the differential amount was paid to the manufacturer out of the CRA.         The operation of the Control Order brought out certain serious problems affecting th e cement industry.      The control resulted in the fall of the fresh investments in the cem ent industry.  Further, there were consistent demands for revision of the retention prices o n the basis that the cost of manufacture had increased considerably.  The burden of CRA incr eased rapidly because of the rapid increase in fuel and transport cost.  The CRA went into d eficit.  It was unable to meet its commitments.

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       Considering the problems, the Government on 23rd March, 1981 constituted a high leve l Committee to review the developments of the cement industry and recommend measures to acce lerate its progress including incentives and fair prices.  The terms of reference of that Co mmittee were : "(i)    To review the present system of pricing in the cement industry (consisting of existi ng factories, new factories and mini cement factories), including the merits of establishing  uniform prices for different varieties of cement, suggest modifications to ensure the healt hy growth of this industry including the achievement of production at optimal levels and rec ommend fair prices payable to producers for the next pricing period commencing from April 19 82; (ii)    To review the incentives (including rebates and concessions) available to cement fac tories and suggest what change in these should be made to rapidly augment the domestic produ ction of cement.  In this connection, also review the incentives available for the erection  of cement factories in remote, difficult and deficit areas and recommend what alternatives s hould be made in these to accelerate the production of cement in these areas in a cost-effec tive manner; (iii)   To review the progress of modernization and introduction of technological improvemen ts (including efficiency in the use of energy; research and development and quality control)  in domestic cement factories and recommend measures (including system of incentives to acce lerate these in order to reduce costs and effect economies in domestic production; and (iv)    To consider any other matter relating to rational development of the cement industry ."

       After detailed and exhaustive study of all aspects in relation to cement industry, a  large number of recommendations were made by the aforesaid Committee including recommendati on for a partial decontrol so that the cement manufacturers are allowed to sell a certain sp ecified percentage of their production in the open market without any price control.  It was  expected that the cement prices in the open market would be far higher than the controlled  prices and this would create incentives for the fresh investment in the cement industry.  Th e Committee felt that the need for freight subsidy by payment, out of the CRA would have to  be continued otherwise serious problems would arise in remote and far-flung areas.      It w as noticed that there is already sizeable deficit in the CRA which would make it unable to m ake its past payment commitments.  The Committee, therefore, recommended, as an integral par t of the package of amendments, that an amount of Rs.10/- per MT should be recovered from th e cement manufacturers for payment into the CRA on every tonne of cement produced, irrespect ive of whether it was levy cement or non-levy cement.         With some modifications, the recommendations of the Committee were accepted by the C entral Government.      The Central Government allowed partial decontrol.  It allowed sale o f non-levy cement to the extent of 33.34% and not 25% as recommended by the Committee.  Furt her, instead of recommended payment of Rs.10/- per MT, the Central Government reduced the pa yment to the CRA at the rate of Rs.9/- per MT.  It was felt that the payment into CRA on dec ontrolled quantity of cement was necessary because to the extent of decontrol, there will be  no contribution into the CRA of the differential amount between FOR destination price and t he manufacturer’s retention price.  It was felt that the Government’s duty and obligation to  pay freight subsidy on the controlled output of levy cement which accounted for 66.66% of t he total production continued and was expected that this burden would increase sharply becau se of substantial increases in the transport cost.      The CRA would, therefore, balance in  this situation of decontrol only if the said contribution of Rs.9/- per MT was received int o CRA on the non-levy cement.  It was also contemplated that the sale price of the non-levy  cement would be far higher than the price of the levy cement and, therefore, there will be n o unnecessary burden on the cement manufacturers inasmuch as this will be passed on to the c ustomers in the shape of higher prices.  It seems that by and large, the cement industry wel comed the new package pricing policy.  It complemented the High Level Committee for departin g from the conventional approach to the problems of pricing and distribution and submitted r eport to the Government which will stimulate the cement industry and ensure its healthy grow th. It appears that out of a large number of cement manufacturers in India, only four manufactur ers, namely the appellants, challenged clause 9A and consequent payment under the said claus e, three of them filing the writ petitions after the liability to pay had been withdrawn and  one manufacturer in September 1986.  The High Court by the impugned judgment did not accept  the contention that the payment under Clause 9A amounted to tax and, thus, upheld the valid ity of the impugned clause.      The High Court held that the partial decontrol and the impu gned contribution was one single integrated and inseverable package.         The contention urged on behalf of the appellants is that the payment under Clause 9A

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constitutes levy and collection of tax without authority of law.  It is contended that Clau se 9A is ultra vires Section 18G of the Act.  The impugned clause requires the manufacturers  to compulsorily pay Rs.9/- per MT on the non-levy cement produced by them.      There is no  authority under the Act to levy or recover such a payment.      It was contended that no ta x can be imposed by any subordinate legislation unless the principal statute specifically au thorises such imposition.  The submission is that the Act does not authorise levy and recove ry of any such tax and, therefore, Clause 9A is ultra vires the Act.          Clause 3 of the Control Order contains prohibition to remove the cement from the pr ecincts or premises of the manufacturer.  Clause 4 empowers the Central Government to direct  sale or transport of cement to any person or class of persons and on such terms and conditi ons, as may be specified in the Order.  The obligation on the producer to maintain and produ ce the accounts as the Central Government may require is provided in Clause 6.  Clause 7 pro vides that the ex-factory prices admissible to the producer for the different varieties of c ement shall be as specified in the Schedule, namely, the retention price.  Clause 8 provides  the price at which the producer can sell the cement.         Clause 9 provides for payment by the producer of the cement into the CRA.  Clause 9  reads as under : "Payment to cement regulation account. 9.      (1) Every producer shall, in respect of each transaction by way of sale of cement ef fected by him or in respect of every removal of cement made by him, under clause  3 pay with in one month of the close of the month in which such sales or removals take place, to the De velopment Commissioner for Cement Industry, an amount equivalent to the amount, if any, by w hich the free on rail destination price of such cement exceeds the aggregate of the followin g amounts, namely :- (i)     the ex-factory price of such cement calculated in accordance with the rates specifie d in the Schedule; (ii)    selling and distribution expenses calculated at the rate of Rs.4.00 per tonne; (iii)   the excise duty paid thereon; and (iv)    in the case of packed cement, the charges fixed by the Central Government in respect  of packing under the first proviso to clause 8 and where a producer uses second hand jute b ags in excess of the limit, if any, specified under the second proviso to that clause such c harges as proportionately reduced : provided that the expenditure incurred by the producer on freight by the cheapest mode of tr ansport or where any other mode of transport has been specified by the Central Government un der clause 4, by such mode of transport in respect of such transaction shall be reimbursed t o the producer by the Development Commissioner for Cement Industry from out of the Cement Re gulation Account referred to in clause 11."

Clause 10 provides for the maximum price at which cement could be sold.         Clause 11 stipulates the maintenance of CRA and the purpose for which the amount cre dited into CRA could be spent.  Clause 11 reads as under : "Cement regulation account. 11.     (1)     The Development Commissioner for Cement Industry shall maintain an account t o be known as the Cement Regulation Account to which shall be credited the amounts paid by t he producer under clauses 9 and 9A and such other sums of money as the Central Government ma y, after due appropriation made by Parliament by law in this behalf, grant from time to time . (2)     The amount credited under sub-clause (1) shall be spent only for the following purpo ses, namely :- (i)     paying or equalizing the expenditure incurred by the producer on freight in accordan ce with the provisions of this Order; (ii)    equalizing concession, if any, granted in the matter of price, freight supplies to G overnment or public or for purposes of export under the second proviso to clause 8 or for im port; (iii)   expenses incurred by the development Commissioner for Cement Industry in discharging  the functions under this Order subject to such limits, if any, as may be laid down by the C entral Government in this behalf. (iv)    such reimbursement of expenses by the Development Commissioner for Cement Industry a s may be incurred by the producers of cement for the purpose of increasing the production fo r securing the equitable distribution and availability at fair prices of cement. (3)     The Development Commissioner for Cement Industry shall cause accounts to be kept of  all moneys received and expended by him from out of the Cement Regulation Account and he sha ll prepare and submit such report and returns relating to the said account as may be require d by the Central Government from time to time.

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(4)     The balance, if any, remaining unspent in the Cement Regulation Account shall be dis bursed in accordance with such directions as may be given by the Central Government in this  behalf."

       The amendments made to the Control Order on 28th February 1982, that are relevant fo r appreciation of respective contentions are as under : "Applicability. 1A.     The provisions of the said Order except clause 9A thereof shall apply only in relati on to levy cement. Definitions. 2.      In this Order, unless the context otherwise requires,-- (a) to (cc) ... (d)     "levy cement" means that part of production of cement with reference to the installe d capacity of a cement plant as may be determined by the Central Government, from time to ti me, not being more than per cent of the installed capacity of the cement plant; (e)     "non-levy cement" means that part of production of a cement plant which is in excess  of the production mentioned in sub-clause (d). 9A.     Every producer shall, in respect of the production of non-levy cement pay to the Cem ent Regulation Account an amount at the rate of rupees nine per metric tonne of such product ion, within one month of the close of the month in which such production takes place."

It is apparent that except Clause 9A, no other clause of the Control Order applies to non-le vy cement.      There is no control on supply, distribution or price of the non-levy cement.   The non-levy cement is free from price and distribution control in contrast to levy cement .  Whereas in respect of levy cement, under Clause 9, the cement producers were required to  pay into CRA the difference between FOR destination price charged by them and the retention  price admissible to them, in respect of non-levy cement under Clause 9A, they were required  to pay in CRA Rs.9/- per metric tonne.  According to the appellants, in respect of non-levy  cement whatever money is paid by the buyer of the cement to them becomes their money and the reafter the requirement of payment as provided in Clause 9A is a compulsive payment and henc e a tax.  For such a tax, it is contended, there is no sanction of law.  The contention is t hat the impugned clause is a compulsion on manufacturers of non-levy cement to pay Rs.9/- pe r metric tonne as above, which constitutes levy and recovery of tax that cannot be imposed b y any subordinate legislation unless the principal statute specifically authroises such impo sition.  There is no such authorization in the Act.  Therefore, it is contended that Clause  9A is ultra vires the Act.         In support of the submission that the impugned levy under Clause 9A, in fact, i s a tax, learned counsel for the appellants has placed reliance on the decision of the House  of Lords in Attorney-General v. Wilts United Dairies [1922 (91) Law Journal Reports (Kings  Bench) 897].  In that case, the Food Controller was empowered by the Defence of the Realm Re gulations to make orders regulating or giving directions with respect to the production, man ufacture, treatment, use, consumption, transport, storage, distribution, supply, sale or pur chase of or other dealing in or measures to be taken in relation to any article as appear to  him necessary or expedient for the purpose of encouraging or maintaining the food supply of  the country.  It was found that there was disparity in the prices of milk prevailing in dif ferent areas and in order to equalize these prices, the Food Controller purporting to exerci se powers conferred on him by the Defence of the Realm Regulations, entered into agreements  with the defendant-company by which the latter were permitted to purchase milk within certai n defined areas on terms that they should pay him a sum of two pence per gallon for this pri vilege. The defendant-company which was required to make this payment, refused to do so and  to the information laid against it raised the contention that the charge amounted in effect  to a tax levied in an unconstitutional manner.  The company succeeded in the Court of appeal  and the Attorney General brought the matter in appeal before the House of Lords.  In dismis sing the appeal, Lord Buckmaster after accepting the argument based upon the extreme difficu lty of the situation in which the country found itself owing to the war, and the importance  of securing and maintaining vital supplies essential for the life of the community, proceede d to consider the question whether a power to make such a levy was granted.      The statute  had confined the duties of the Food Controller to regulating the supply and consumption of  food and taking the necessary steps for maintaining proper supplies.  It was observed that : "The question before this House is not whether or not that was a wise and necessary step to  take having regard to the difficulties by which the whole question of the milk supply was su rrounded; the only question which we have to decide is whether there was any power conferred  upon the Food Controller to do what he did.  They Attorney-General has urged your Lordships  to consider the extreme difficulty of the situation in which the country found itself owing

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to the war, and the importance of all the officials who had charge of our vital supplies be ing enabled to act under the powers conferred upon them without fear of technical and vexati ous objections being taken to the powers which they used.  All that may be readily accepted  but it cannot possibly give to any official a right to act outside the law; nor can the law  be unreasonably strained in order to legalise that which it might be perfectly reasonable sh ould be done if, in fact it was unauthorized.  The real answer to such an argument is to be  found in this, that in times of great national crisis Parliament should be, and generally is , in continuous session, and the powers which are required for the purpose of maintaining th e integrity of the country, both economic and military, ought always to be obtained readily  from loyal Houses of Parliament.  The only question here is, Were such powers granted?         There are only two sources from which those powers can possibly be derived.  One is  the Act creating the Ministry, and the other the Regulations under the Defence of the Realm  Act.  Neither of these either directly or, in my opinion, by inference, enabled the Food Con troller to levy the payment of any sums of money from any of His Majesty’s subjects.  The st atute of 1916 confines his duties to regulating the supply and consumption of food and takin g the necessary steps for maintaining a proper supply of food.  The powers so given are no d oubt very extensive and very drastic, but they do not include the power of levying upon any  man payment of money which the Food Controller must receive as part of a national fund and c an only apply under proper sanction for national purposes.  However, the character of this p ayment may be clothed, by asking your Lordships to consider the necessity for its imposition , in the end it must remain a payment which certain classes of people were called upon to ma ke for the purpose of exercising certain privileges, and the result is that the money so rai sed can only be described as a tax the levying of which can never imposed upon subjects of t his country by anything except plain and direct statutory means." (emphasis supplied by us)

       In Attorney General for New South Wales v. Homebush Flour Mills Ltd. [56 C.L.R. 390  at 400] the High Court of Australia held that when the exaction of money by a Government in  obedience to what is really a compulsive demand, the money paid is paid as a tax.         Reliance was also placed on the decision of Privy Council in Lower Mainland Dairy Pr oducts Sales Adjustment Committee v. Crystal Dairy Ltd. [1933 AC 168].  The case was concern ed with the legality of certain adjustment levies imposed on farmers by an adjustment Commit tee created by an enactment of British Columbia by which the disparity in the production of  fluid milk as compared with milk products was sought to be countered.  It was contended on b ehalf of the State that the levies were not taxes but merely a scheme for pooling profits in  a provincial trade.  Lord Thankerton speaking for the Board said : "The main issue of this appeal is whether the adjustment levies are taxes,....  In the opini on of their Lordships, the adjustment levies are taxes.  They are compulsorily imposed by a  statutory committee...  They are enforceable by law.  Compulsion is an essential feature of  taxation.  The Committee is a public authority, and the imposition of these levies is for a  public purpose.  The fact that moneys so recovered or distributed as bonus among the traders  in the manufactured products market does not affect the taxing character of the levies made ."

       Reliance was also placed on A. Venkata Subba Rao v. State of Andhra Pradesh [(1965)  2 SCR 577].      In this case the Government of Madras passed various orders for procurement  and distribution of paddy and rice.  Persons were appointed as procuring agents and wholesa lers and their duty was to procure rice from specified areas at prices specified by the Gove rnment from time to time and to deliver it at prices so specified to the Government or to th e persons nominated by it or to other licensed purchasers.  The purchasing agents were to ge t the difference between the purchase price and the sale price.  During the year 1947-48 the  Government increased the price and this resulted in excess profits to procuring agents.  Th e Government insisted that this excess sum so earned by the procuring agents should be paid  to the Government and this sum was directed to be collected as surcharge.  It was held by th e Supreme Court that recovery of this money amounted to a tax imposed by an executive fiat w ithout any legislative sanction on the capital value of the stocks of foodgrains held on a p articular date.         This Court observing that if there is no legal basis for these demands by the Govern ment, it is not possible to characterize them anything else than as taxes; they were imposed  compulsorily by the executive and are sought to be collected by the State by the exercise,  inter alia, of coercive statutory powers, though these powers are vested in Government for v ery different purposes.  This Court has approved the statement of law and the essential char acteristics of tax as contained in the aforequoted observations of Lord Thankerton.         For deciding the validity of Clause 9A, in view of the aforesaid legal position , it is to be determined whether the contribution payable amounts to compulsory

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exaction of money and hence has an essential feature of taxation.  The core ques tion that has to be decided is as to whom the money paid by the buyers of non-le vy cement belongs.  The real question, therefore, is: are the appellants merely holders of the money paid to them by their customers for purchase of non-levy ce ment and are not, in fact, entitled to it or the money, in fact, belongs to them ?  In support of the contention that the money, in fact, does not belong to the appellants and they are merely holders thereof, learned counsel for the responde nts, besides placing reliance on two decisions, one of the Calcutta High Court u pholding the validity of Clauses 4A and 4B of the Aluminium Control Order, 1970 and the other of Delhi High Court upholding validity of Clause 9 of the Control Order, has p laced, rather emphatically, strong reliance on the background, scheme and the circumstances  under which Clause 9A was inserted in the Control Order by 1982 amendment.  We have already  noticed that Clause 9A was inserted while simultaneously introducing partial decontrol of ce ment.  No fault can be found with the object behind the levy in question.  As a result of pa rtial decontrol, the cement manufacturers were expected to earn huge profits by sale of non- levy cement in open market.  There was no limitation or restriction on sale price.  The effe ct of Clause 9A was to make them contribute, out of those profits, Rs.9/- per metric tonne i nto the CRA.  Howsoever laudable the object behind the levy and collection of any sum of mon ey may be, but if it does not have sanction of law, it has to be struck down.  The contentio n that the partial decontrol and contribution under Clause 9 are inseparable and part of the  same scheme, though looks attractive at the first brush but closer examination thereof show s that it has no substance.  The question before this Court is only about the validity of Cl ause 9A for want of legal sanction to impose the levy and collect that amount and not about  the validity of the partial decontrol.  From the affidavit of the respondents filed in this  Court as well, it appears that on payment of the sale price of the non-levy cement by the bu yers to the sellers, i.e., the cement manufacturers, the amount so paid becomes their proper ty - amount belongs to them, though they may have passed on the burden to the customers, it  cannot be held that the appellants are merely holders of that amount.  It would be useful in  this connection to quote from the affidavit filed on behalf of the Ministry of Commerce and  Industry, Department of Industrial Policy and Promotion which itself shows that the money r eceived by sale of non-levy cement becomes the money of the sellers.     The affidavit state s : "Further, it was contemplated that the non-levy open market cement price would be far higher  than the levy price or the controlled price by much more than the required contribution of  Rs.9/- per MT and, as a result, the said contribution of Rs.9/- on the non-levy cement would  be easily and effortlessly passed on by the cement manufacturers to their customers in the  shape of higher prices.  In fact, this is exactly what happened.  Thereafter, the non-levy c ement price was at all points of time far higher than the levy cement price.  For example, i n June 1985, the levy price of cement was Rs.532/- per MT whereas, on the other hand, the no n-levy price of cement per MT was as much as Rs.1660/-, i.e., three times the levy price.  E ven earlier, right from February 1982 onwards, when the Cement Control Order, 1967 was amend ed, the non-levy cement price was at least double the levy cement price and the manufacturer s, therefore, realized a sale price for his 33.34% non-levy production a total sale price wh ich was much more than the retention price in respect of the 66.66% production of levy cemen t.  The said contribution of Rs.9/- per MT of non-levy cement was, therefore, passed on by t he cement manufacturers and was wholly recovered from their customers.  This factual positio n was made abundantly clear by the letter dated March 12, 1982 addressed to the Government o f India by the Cement Manufacturers Association which showed that the contribution to the Ce ment Regulation Account at Rs.9/- per MT of non-levy cement was built into the price of non- levy cement and recovered from the customers."

       The decisions relied upon by learned counsel for the respondents have no relevance.   In Union of India & Ors. v. Hindustan Aluminium Corporation Limited & Anr. [AIR 1983 Cal. 3 07] while examining the validity of the aforenoticed provisions of Aluminium Control Order,  1970, it was held that the person challenging the validity of the clause which related to th e fixation of retention price of indigenous aluminium (Clause 4A) and fair price of aluminiu m (Clause 4B) is merely the holder of the money.  In that case, the Government had fixed the  sale price of indigenous aluminium which was considered to be fair and within the pecuniary  limits of the consumers.  The Government, finding that mere fixation of sale price would se rve no purpose of the consumers and consequently the objectives under Section 3 of the Essen tial Commodities Act, 1955 cannot be achieved, introduced the concept of retention price in  order to obviate the difficulties of the consumer.  The Calcutta High Court held that as the  retention price fixed for HINDALCO was lower than the sale price, HINDLCO has to pay to the  Aluminium Regulation Account, the sum which is the difference between the sale price and th

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e retention price.      Under these circumstances, it was held that the steps taken by the G overnment by fixation of the retention price for each producer and the sale price and the pr ovision for payment to the Aluminium Regulation Account were necessary in the interests of t he consumers so as to maintain supply of aluminium consistent with the demand thereof and to  make it available to the consumer at a fair price.         Likewise, in R.D. Aggarwala & Anr. v. The Union of India & Anr. [ILR 1974 (2) Delhi  520], the Delhi High Court was concerned with the validity of Clause 9.  In that case, the c ontention that was urged was :  "the requirement in clause 9 that every producer should pay to the Controller the balance t hat remains from out of the f.o.r. destination price, and the provision in clause 11(4) enab ling the Government to disburse the unspent amount in the Cement Regulation Account in any m anner it likes, amount to a colourable exercise of the taxing power of the State, and beyond  the legislative competence of the executive under Section 18G of the Act, in-as-much as the  out-right deprivation of the balance of the freight in the hands of producer and the power  of the Government to disburse the same as it likes, amount to a direct and variable levy of  tax without any authority of law under Article 265 of the Constitution."

       The High Court held that the contention was based on the assumption that the produce r was deprived of the balance of the freight in his hands.      It was clear that the produc er was not entitled to the said balance of freight according to the scheme of the Control Or der.  The Court said : "Coming now to the contention urged by the learned counsel, it was based on the assumption t hat the producer was deprived of the balance of the freight in his hands.  It is clear from  what has been stated above that the producer was not entitled to the said balance of the fre ight according to the scheme of the Control Order.      Once it is held, as we did, that the  fixation of the ex-factory or retention price is valid, it would follow that the balance of  the f.o.r. destination  price that remains after deducting the said retention price and the  other items allowed to be deducted by the producer under clause 9 of the Control Order, doe s not belong to the producer and, therefore, he cannot be said to be deprived of the same wh en he pays to the same to the Controller under clause 9.  In that view, the payment of the b alance to the Controller cannot be described as levy of tax qua the producer.  Nor can it be  a tax qua the consumer, as the amount of freight is paid by the consumer as part of the f.o .r. destination price."

       The High Court, therefore, held that the balance of FOR destination price does not b elong to the purchaser under the scheme of the Control Order and cannot, therefore, be regar ded as tax qua the producer.         Factual matrix of the two cases relied upon by learned counsel for the respondents a nd of the present case is entirely different.  As already noticed, there is no control on pr ice 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 t he 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 on that cement which is not covered  by the Control Order.         It is no doubt true that in taxing legislation, legislature deserves greater latitud e 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 introduc e it and howsoever laudable may have been the purpose for which the amount so collected may  have been spent.         It is clear from the above discussion that the impugned levy under Clause 9A is a co mpulsory exaction.      The amount paid by the customers of non-levy cement belongs to the a ppellants.      Such a levy amounts to levy of tax and, therefore, invalid for want of sanct ion to levy such a tax.  Clause 9A is, therefore, ultra vires Section 18G of the Act.  To th is extent we set aside the impugned judgment of the High Court.         The next question is: whether the appellants are entitled to refund of the contribut ion made by them under Clause 9A of the Control Order?  There is no automatic right of refun d.  In Mafatlal Industries Ltd. & Ors. v. Union of India & Ors. [(1997) 5 SCC 536], the Cons titution Bench has held that the right to refund of tax paid under an unconstitutional provi sion of law is not an absolute or an unconditional right.  Similar is the position,  even if  Article 265 can be invoked.  The principles of unjust enrichment are applicable in claim of  refund.  The claimant has to allege and establish that he has not passed on the burden to a nother person.  The Constitution Bench has held whether the claim for restitution is treated  as a constitutional imperative or as a statutory requirement, it is neither an absolute rig ht nor an unconditional obligation but is subject to the requirement as explained in the jud

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gment.  Where the burden of duty has been passed on, the claimant cannot say that he has suf fered 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 c laim its refund.  But where such person does not come forward or where it is not possible to  refund the amount to him for one or the other reason, it is just and appropriate that that  amount is retained by the State, i.e., by the people.  The doctrine of unjust enrichment is  a just and salutary doctrine.  The power of the Court is not meant to be exercised for unjus tly enriching a person.  The doctrine of unjust enrichment is, however, inapplicable to the  State for the State represents the people of the country.  No one can speak of the people be ing unjustly enriched.         In the present case, it is clear that the burden of payment under Clause 9A was pass ed on to the customers.  The President of the Cement Manufacturer Association, soon after th e insertion of the amendment in February 1982, in a communication dated 12th March, 1982 sen t to the Secretary of Ministry of Commerce, Department of Industrial Development, Government  while giving break-up of the price of non-levy cement added in the said price, a sum of Rs. 9/- per MT payable under Clause 9A on production of the non-levy cement.  Further, it appear s that the levy under Clause 9A was accepted by the entire cement industry except the challe nge made by the four appellants by filing the writ petitions; one just before the contributi on under Clause 9A was withdrawn and three after it was withdrawn.  Besides the principles o f unjust enrichment on equitable principles which squarely apply here, the applicants are no t entitled to claim refund of amount paid into CRA under Clause 9A.  It is evident that the  amount so deposited was expanded for the purpose under the Control Order.  Under these circu mstances, we direct that pursuant to declaration of invalidity of Clause 9A of the Control O rder, the amount of contribution already paid under Clause 9A will not be liable to be refun ded to the appellants.         The appeals are accordingly allowed to the above limited extent.  In the facts and c ircumstances of the case, parties are left to bear their own costs.