Case: Allahabad Canning Company Vs. Union of India

to the Fund a refund shall be made from the Fund to the buyer of Levy Sugar from whom any excess realisation was made by the producer or dealer,Provided that no buyer shall be entitled to claim as refund under this sub-section if he-(a) being the wholesale dealer, had passed on the incidence of such excess over the controlled or fair price of levy sugar to the retail dealer by whom the price of such sugar was paid or(b) being a retail dealer, had passed on the incidence of such excess over the cont rolled or fair price of levy sugar to the consumer by whom the price of such sugar was paid."2. Since a sum of Rs. 22681.88 represented excess realisation made by K.M. Sugar Mills Limited from the appellants and this amount was credited to the Fund by the Registrar of the High Court, the appellants filed an application in form IV making a claim for refund of this amount from the Fund. This application was filed by the appellants, on 30th April, 1979 , admittedly within the prescribed period of six months. The Central Government, however, rejected the claim made by the appellants on the ground that they had not been able to establish fully and clearly that the incidence of higher sugar price was not passed on by them to the consumers of the end products.3. The appellants thereupon preferred a Writ Petition in the High Court but the High Court also rejected the Writ Petition on the same ground, namely, that according to the finding re corded by the Central Government the appellants had not been able to establish fully and clearly that the incidence of higher sugar price was not passed on to the consumers of the end products and since this was a finding of fact base on evaluation of the material and evidence produced by the appellants before the competent authority, the High Court would not be justified in interfering with the order of the Central Government. The appellants thereupon preferred the present appeal with special leave obtained from this Court.4. The main point of controversy between the parties centres round the true interpretation of S. 6 Sub-section (1) of the Equalisation Fund Act. This provision lays down as a condition precedent to its applicability that the excess realisation made by the manufacturer of sugar should have been credited to the Fund. Now, the application made by the appellants in from IV stated in so many terms that the amount in question had been de posited by the Registrar of the High Court in terms of the Levy Sugar Price Equalisation Fund Rules, 1972, through the Chief Pay &Accounts Officer, Govt. Of India, Ministry of Agriculture &Irrigation, Department of Food, New Delhi. This statement was not at any time disputed on behalf of the Central Government either in the order made by the Central Government rejecting the claim of the appellants or in the proceedings before the High Court. It is indisputable that a sum of Rs. 2268 1.88 representing the excess realisation made from the appellants by K.M. Sugar Mills Limited was credited to the Fund by the Registrar of the High Court. And in any event, this must be presumed to have been done because the Equalisation Fund Act having been enacted for this purpose, the Registrar of the High Court would naturally be expected to carry out his obligation under the statute by depositing the amount of excess realisation recovered by him under the bank guarantee given by K.M. Sugar Mills Limited. There can, therefore, be no doubt that in terms of Section 6, Sub-section (1) the appellants were entitled to claim refund of the sum of Rs. 22681.88 from the Fund. The only question is whether the proviso to section 6, Sub-section (1) precluded the appellants from claiming refund of that amount. The proviso on its plain terms applied only where the party claiming refund of the amount of excess realisation is a wholesale or a retail dealer who has passed on the incidence of the excess over the controlled price of levy sugar to the retail dealer or to the consumer, as the case may be. The proviso obviously cannot apply to a case where a claim for refund has been made by a consumer of sugar from whom excess realisation has been made by the manufacturer of sugar. The appellants were admittedly consumers of sugar and not dealers in sugar and since they were not dealers in sugar, there could be no question of any incidence of excess being passed by them to the retail dealer or to the consumer.The learned counsel appearing on behalf of the respondent contended that the excess over the controlled or fair price of levy sugar must have been passed on by the appellants to the consumer when they sold the manufactured products to them, because the higher price paid by them for the sugar purchased from K.M. Sugar Mills Limited must have been taken into account by them in fixing the price of the manufactured products. This may be so or may not be so. It is not necessary for us to examine this question because it is irrelevant on the terms of the proviso to Section 6, Sub-section (1). That proviso deals with a situation where a wholesale or retail dealer passes on the incidence of excess over the controlled or fair price of levy sugar to a retail dealer or consumer, who purchases such sugar. It contemplates a case where a dealer-whether whole sale or retail-sells sugar to a retail dealer or consumer as the case may be and not where a person sells a manufactured product containing sugar as one of its ingredients, we have, therefore, no doubt that the proviso to Section 6, Sub- section (1) was not attracted in the case of the appellants and, consequently, the appellants were entitled to claim refund of the sum of the Rs. 22681.88 from the sum of Fund.5

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]The only question is whether the proviso to section 6, Sub-section (1) precluded the appellants from claiming refund of that amount.The proviso on its plain terms applied only where the party claiming refund of the amount of excess realisation is a wholesale or a retail dealer who has passed on the incidence of the excess over the controlled price of levy sugar to the retail dealer or to the consumer, as the case may be. The proviso obviously cannot apply to a case where a claim for refund has been made by a consumer of sugar from whom excess realisation has been made by the manufacturer of sugar. The appellants were admittedly consumers of sugar and not dealers in sugar and since they were not dealers in sugar, there could be no question of any incidence of excess being passed by them to the retail dealer or to thelearned counsel appearing on behalf of the respondent contended that the excess over the controlled or fair price of levy sugar must have been passed on by the appellants to the consumer when they sold the manufactured products to them, because the higher price paid by them for the sugar purchased from K.M. Sugar Mills Limited must have been taken into account by them in fixing the price of the manufactured products.This may be so or may not be so. It is not necessary for us to examine this question because it is irrelevant on the terms of the proviso to Section 6, Sub-section (1). That proviso deals with a situation where a wholesale or retail dealer passes on the incidence of excess over the controlled or fair price of levy sugar to a retail dealer or consumer, who purchases such sugar. It contemplates a case where a dealer-whether whole sale or retail-sells sugar to a retail dealer or consumer as the case may be and not where a person sells a manufactured product containing sugar as one of its ingredients, we have, therefore, no doubt that the proviso to Section 6, Sub- section (1) was not attracted in the case of the appellants and, consequently, the appellants were entitled to claim refund of the sum of the Rs. 22681.88 from the sum ofis not necessary for us to examine this question because it is irrelevant on the terms of the proviso to Section 6,(1). That proviso deals with a situation where a wholesale or retail dealer passes on the incidence of excess over the controlled or fair price of levy sugar to a retail dealer or consumer, who purchases such sugar. It contemplates a case where awhole sale orsugar to a retail dealer or consumer as the case may be and not where a person sells a manufactured product containing sugar as one of its ingredients, we have, therefore, no doubt that the proviso to Section 6, Subsection (1) was not attracted in the case of the appellants and, consequently, the appellants were entitled to claim refund of the sum of the Rs. 22681.88 from the sum of