- (1.) This is an appeal by Special Leave directed against an order of the High Court of Allahabad dismissing a writ petition filed by the appellants claiming refund of a sum of Rs. 22681.88 from the Levy Sugar Price Equalisation Fund under Section 6 sub-sec. (1) of the Levy Sugar Price Equalisation Fund Act, 1976 (hereinafter referred to as the Equalisation Fund Act). The facts of the case are few and may be briefly stated as follows : The appellants carry on business of manufacture of syrups, squashes, jams and jellies, preservation of vegetables and other food products. One of the essential raw materials for these products manufactured by the appellants is sugar. There was at the material time Sugar Control Order 1966 issued under S. 3 of the Essential Commodities Act, 1955, clause 4 of which provided that no purchaser shall sell or agree to sell or otherwise dispose of, sugar or deliver or agree to deliver sugar or remove any sugar from the bonded godown of the factory in which it is stored, except under and in accordance with the directions issued in writing by the Central Government or the Chief Director. Pursuant to this Order the Central Government introduced the policy of partial decontrol of sugar in August, 1967 and under this policy, the Central Government adopted a scheme of acquiring levy sugar from the factory. The price of levy sugar acquired by the Central Govt. was fixed every year in accordance with the principles set out in Section 3 (3C) of the Essential Commodities Act, 1955 and during the period in question the price of levy sugar was determined under the Sugar (Price Determination) Order 1972. This Order was however challenged by factories manufacturing sugar and an interim order was passed by the High Court of Allahabad permitting them to charge a price higher than that fixed under the Order, on condition that they furnished bank guarantee for the difference in price in favour of the Registrar of the High Court. Now, different prices were fixed under the Sugar (Price Determination) Order, 1972 for different zones and so far as the East U. P. zone was concerned, the price fixed was Rs. 175/- per quintal exclusive of excise duty, sales tax etc. with the result that the price inclusive of these taxes and duties amounted to Rs. 190/- per quintal. The appellants purchased from K. M. Sugar Mills Limited, Motinagar, Faizabad a certain quantity of sugar under a release order issued by the Central Government under the Levy Sugar Supply (Control) Order 1972 and they lifted an aggregate quantity of 400 quintals of sugar on 12-8-1972 and 16-8-1972. Now, under the Sugar (Price Determination) Order, 1972 K. M. Sugar Mills Limited were not entitled to recover from the appellants price at a rate exceeding Rs. 190/- per quintal but by virtue of the stay order granted by the High Court of Allahabad they recovered from the appellants price at the rate of Rs. 234.89 per quintal and the total excess amount charged by K. M. Sugar Mills Limited from the appellants thus came to Rs. 22681.88 for which Bank guarantee was given by K. M. Sugar Mills Limited in favour of the Registrar of the High Court. The Writ Petition filed by K. M. Sugar Mills Limited against the Sugar (Price Determination) Order, 1972 along with other similar Writ Petitions filed by other manufacturers of sugar was however ultimarely dismissed by the Allahabad High Court in November, 1974 with the result that the Registrar of the High Court became entitled to encash the Bank guarantee given by K. M. Sugar Mills Limited and a sum of Rs.22,681.88 was accordingly recovered by the Registrar under the Bank guarantee.
(2.) Since the excess amount recovered by the various manufacturers of sugar, including K. M. Sugar Mills Limited really belonged to the consumers to whom sugar had been sold by these manufacturers, Parliament enacted Levy Sugar Price Equalisation Fund Act, 1976 with effect from 1-4-1976 for the purpose of ensuring that the excess amount so recovered should not remain in the hands of manufacturers of sugar so as to unjustly enrich them but should be paid to the consumers of sugar from whom it had been unlawfully recovered by the manufacturers. Section 3 (1) of the Equalisation Fund Act established a Fund known as the Levy Sugar Price Equalisation Fund. Sub-section (2) of Section 3 provided that there shall be credited to the Fund amounts representing all excess realisations made by the manufacturers, irrespective of whether such realisations were made before or after the commencement of the Equalisation Fund Act. Pursuant to this provision, the Registrar of the High Court deposited a sum of Rs. 22,681.88 to the Credit of the Fund. Section 6 of the Equalisation Fund Act then proceeded to enact that where any amount of excess realisation is credited to the Fund, the buyer of Levy Sugar from whom such excess realisation was made by the manufacturer shall be entitled to the refund of such excess realisation from the Fund. This Section is material for the purpose of determination of the controversy arising in the present appeal and we would, therefore, reproduce it as follows : "(1) Where any amount is credited 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 controlled or fair price of levy sugar to the consumer by whom the price of such sugar was paid."
(3.) Since a sum of Rs. 22,681.88 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.;