1992 Supreme(Del) 327

High Court Of Delhi
RAYMOND WOOLLEN MILLS LIMITED - Appellant
Versus
UNION OF INDIA - Respondent
Civi 20170 of 1987
Decided On : 05/29/1992

Headnote:Cement Control Order 1967 - Clause 9A — validity of — Cement producers required to pay to cement regulation account an amount of Rs. 9/- per metric tonne of non-levy cement produced — levy discontinued since 15th December 1986 — Clause 9A and levy and recovery there under ultra virus of Section 18G — No tax can be imposed by any subordinate legislation unless principal statute specifically authorise such imposition — amount paid not to be regarded as tax — amount paid was not contribution by producer from its own packet but was an amount ultimately recovered from consumer — sum paid not a duty or cess — but nothing more than a contribution to Cement Regulation Account — Clause 9A validly framed under Section 18G of IDR Act — Writ petition dismissed.

       Held:

       There is no merit in the contention that the amount paid under Clause 9A of the said Order amounts to a lax. Clauses 9, 9A and 11 form part of the same scheme. What is contributed under Clauses 9 and 9A to the Cement Regulation Account has to be utilised in the manner indicated in Clause 11 of the order. In these petitions there is neither any challenge to the validity of Clause 9 nor to that of Clause 11. Infact, such a challenge made earlier has been unsuccessful.

       There appears to be no essential difference in the object sought to be achieved between Clauses 9 and 9A of the Act. Both require contribution of sums to the Cement Regulation Account. Whereas Clause 9 has reference to the levy cement, the amount payable under Clause 9A is in relation to non-levy cement produced by the producer. The amount or manner of calculation is, however, different. Whereas under Clause 9 the amount payable to the Cement Regulation Account has to be calculated according to the formula stipulated therein, Clause 9A, however, provides for a fixed amount of Rs. 9/-per metric tonne of non-levy cement which is produced. Under Section 18G of the IDR Act a control order may provide for controlling the price at which any such article or class thereof may be bought or sold. (Section 18(G)(ii)(a)). Even though the non-levy cement can be sold at any price fixed by the producer, there is, however, an overriding charge on the same. It is provided by Clause 9A of the Control Order. In a sense, thereforee, even with regard to the non-levy cement, which is produced by the manufacturer, there is a sort of price control. Clause 9A provides that Rs. 9/-per metric tonne of the cement produced shall be the amount payable into the Cement Regulation Account under Clause 11. Due to shortage of cement which had required the need for the issuance of the Cement Control Order, the entire levy cement was being sold and Rs.9/- per metric tonne were being added to the selling price. This is the case of the respondents and we see no reason not to accept the same. In effect, thereforee, the sum of Rs. 9/- was not a contribution by the producer from its own pocket but was an amount ultimately recovered from the consumer. This sum of Rs. 9/-never formed part of the money which, at any time, belonged to the producer.

       In essence there is no difference with regard to the nature of the money which is to be paid into the Cement Regulation Account. The manufacturer who produces both levy and non-levy cement is required to ensure the payment into the Cement Regulation Account though the calculation of the amount to be contributed has to be at two different rates. By framing Clause 9A, instead of incorporating the same provision by amending Clause 9, a new or a different kind of levy has not been introduced. As the validity of Clause 9 has been upheld, we see no reason as to why Clause 9A should be held to be ultra vires. Clause 9A fits into the scheme of price control and distribution of cement and this is permissible under Section 18G of the IDR Act.

       The contribution under Clause 9A cannot be regarded as a tax. Furthermore, Section 18G of the IDR Act is comprehensive enough to empower the enactment of a provision like Clause 9A of the Order.

       There is no merit in the contention that the sum paid under Clause 9A is a "duty or "cess". The amount paid under that provision is nothing more than a contribution to the Cement Regulation Account and Clause 9A has been validly framed under Section 18G of the I.D.R. Act.