Ultra vires subordinate levy on cement production invalid, but refund denied because the burden was passed on under unjust enrichment.

Clause 9A of the Cement Control Order, 1967 imposed a compulsory monetary exaction on production of non-levy cement without authority in the parent statute, and was therefore ultra vires section 18G of the Industries (Development and Regulation) Act, 1951. The Court treated the levy as an invalid subordinate legislative impost because the amount was taken from the manufacturers' sale proceeds and lacked statutory sanction. Although the levy was struck down, refund was denied because the burden had been passed on to customers through market pricing. Applying unjust enrichment, the Court held that restitution would improperly enrich the producers, so no monetary refund was payable.

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Issues: (i) Whether clause 9A of the Cement Control Order, 1967, requiring producers to pay Rs. 9 per metric tonne on production of non-levy cement, was a compulsory exaction amounting to tax and therefore invalid for want of statutory authority; (ii) whether amounts already paid under clause 9A were refundable to the appellants.

Issue (i): Whether clause 9A of the Cement Control Order, 1967, requiring producers to pay Rs. 9 per metric tonne on production of non-levy cement, was a compulsory exaction amounting to tax and therefore invalid for want of statutory authority.

Analysis: Non-levy cement was outside the price and distribution control applicable to levy cement, and no retention price or regulatory mechanism existed for it except clause 9A. The amount collected under clause 9A was taken from sale proceeds that, on sale, became the property of the manufacturers. The Court distinguished cases where the amount paid into a regulatory account did not belong to the producer under the governing control scheme. Since the exaction was compulsory and lacked sanction in the parent Act, it could not be sustained as a valid subordinate legislative levy, however laudable the object of the scheme may have been.

Conclusion: Clause 9A was ultra vires section 18G of the Industries (Development and Regulation) Act, 1951, and invalid.

Issue (ii): Whether amounts already paid under clause 9A were refundable to the appellants.

Analysis: The burden of the contribution had been passed on to customers through the pricing of non-levy cement. The doctrine of unjust enrichment applies to refund claims arising from unconstitutional exactions, and a claimant must establish that the burden was not passed on. The contribution had already been absorbed in the market price and expended under the control scheme, so restitution to the appellants would result in unjust enrichment.

Conclusion: The appellants were not entitled to refund of amounts paid under clause 9A.

Final Conclusion: The impugned levy was struck down, but no refund was granted of the contribution already collected, so the relief was confined to declaration of invalidity without monetary restitution.

Ratio Decidendi: A compulsory monetary exaction imposed by subordinate legislation without authority in the parent statute is invalid as tax, but refund of amounts collected under such an unconstitutional levy is barred where the burden has been passed on, by the doctrine of unjust enrichment.

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