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(PER : HONOURABLE MR.JUSTICE AKIL KURESHI) Rule. Learned AGP Ms. Sangita Vishen waives rule on behalf of the respondent. Considering the controversy involved and the fact that this Court had previously, by interim orders prevented the respondents from recovering any Cess under the Gujarat Green Cess Act, 2011, instead of admitting the petitions, we have heard learned advocates for the parties for final disposal thereof at this stage itself.

Petitions arise in common background. All the petitioners have challenged virus of the Gujarat Green Cess Act, 2011 ( Act for short) and the Gujarat Green Cess Rules, 2011 ( Rules for short) on various grounds. Facts, as arising in Special Civil Application No.4690 of 2012, which has been treated as the lead matter may be recorded. Essential facts are undisputed. The petitioner No.1 is a company registered under the Companies Act, 1956. The Company has its petrochemical plants situated at Hazira. In the said plant, for its captive consumption, the petitioner has set up a power plant with an aggregate capacity of 360 MW electricity. The petitioner has a refinery situated at Moti Khavdi, Jamnagar. This also houses a captive power plant with generating capacity of approximately 450 MW. Likewise, the petitioner has several other units located in different parts of the State engaged in different manufacturing activities. All such production units contain captive power plants with different generating capacities.

From the above discussion, following questions arise for our decision :

[1] Whether the said Act provides for levy of cess on generation of Electricity ?

[2] Whether under the said Act, the cess collected is a tax or fee?

[3] Even if the cess is in the nature of fee, is the State legislature competent to provide for such levy under Entry 6 read with Entry 66 to List II ?

[4] Even if the levy is considered a fee, is the State legislature competent to enact the law under Entry 38 to List III read with Entry 47 thereof in view of the Electricity Act 2003 having been enacted by the Parliament. In other words, does the said Act trench upon a field occupied by the Union legislation ?

31. There is no doubt in our mind that the Statement of Objects and Reasons of the Cess Act, clearly spells out the essential purpose the enactment seeks to achieve ie., to augment the Welfare Fund under the BOCW Act. The levy of cess on the cost of construction incurred by the employers on the building and other construction works is for ensuring sufficient funds for the Welfare Boards to undertake social security schemes and welfare measures for building and other construction workers. The fund, so collected, is directed to specific ends spelt out in the BOCW Act. Therefore, applying the principle laid down in the aforesaid decisions of this Court, it is clear that the said levy is a fee and not tax . The said fund is set apart and appropriated specifically for the performance of specified purpose; it is not merged in the public revenues for the benefit of the general public and as such the nexus between the cess and the purpose for which it is levied gets established, satisfying the element of quid pro quo in the scheme. With these features of the Cess Act in view, the subject levy has to be construed as fee and not a tax . Thus, we uphold and affirm the finding of the High Court on the issue.

Sum total of the entire discussion above is that the State Act ultra vires the Constitution and the same is therefore, declared void. Resultantly, the Cess levied under the State Act would also stand vitiated. We are informed that in certain cases, by the time this Court granted interim protection against further collection of cess, the petitioners had paid either under protest or otherwise, cess as provided under the said Act. The petitioners have therefore prayed for refund of such cess already paid. By virtue of our declaration that the Act is void and that the levy is illegal, natural corollary would be that the petitioners would be entitled to refund of the cess already paid. This, however, would be subject to verification that the burden of cess has not already been passed on to the ultimate consumers. In Mafatlal Industries Limited & Ors. v. Union of India & Ors., reported in [(1997) 5 SCC 536], even in the context of a statute being declared unconstitutional, it was held that the concept of unjustified enrichment would apply. Relevant observations of the Supreme Court reads thus :-