JUDGMENT R.M. Sahai, J. - For the assessment year 1972-73 petitioner, owner of a unit and manufacturer of Khandasari sugar, opted for being assessed on assumed basis under proviso to sub-section (1) of Section 3 of U.P. Sugarcane Purchase Tax Act instead of actual purchase the basis adopted by it since grant of licence in 1966-67 for running two crushers of 13"x18" while exercising option in Form XIII prepared under R. 13-A, it declared that its unit shall comprise of two crushers. But before starting the unit on 23-11-72 intimation of which was sent on 6-11-72 as required in sub-rule (1) of Rule 13-A, the petitioner sent a letter on 23-12-1972 that it shall operate only one crusher. In the letter dated 6-11-72 it further requested the authorities to seal the second crusher. Whether it was sealed or not is not clear but the assessing authority while accepting intimation for start of unit and calculating tax for month of November, December and January demanded tax in identical amount for these months, on second crusher as well, because petitioner had a common licence for two crushers and it had declared in Form XIII that its unit shall comprise of two crushers which declaration was irrevocable under sub-section (1-b) of Section 3. The demand for second crusher was thus based on legal assumptions rather than on actual working of it. In appeal this order was set aside on 15-10-74 and the demand was struck down as unjustified because petitioner had intimated beforehand that the second crusher shall not operate. The appellate authority found this plea substantiated as in none of the inspections made by the Inspector the second crusher was found working. In fact he held that the second crusher was not fitted at all. It is not disputed that this order became final and demand created by the assessing authority ceased to exist. What happened in the meantime, and which has given rise to this petition, is that petitioner deposited Rs. 4,000/- during pendency of appeal towards demand created for second crusher. After the appeal was allowed the petitioner sent a letter to Sugar Commissioner on 15-3-75 requesting him to pass an order for adjusting Rs. 4,000/- which was due to it, towards arrears of 74-75. 4,000/- during pendency of appeal towards demand created for second crusher. After the appeal was allowed the petitioner sent a letter to Sugar Commissioner on 15-3-75 requesting him to pass an order for adjusting Rs. 4,000/- which was due to it, towards arrears of 74-75. Whether any order was passed by Sugar Commissioner or not but the petitioner while submitting its return on 30-4-1975 in Form VII-A, for the month of March 1975 adjusted Rupees 4,000/- and deposited the balance. No objection appears to have been raised nor any notice of demand for Rs. 4,000/- was issued, but at the time of renewal of licence for 75-76 notice was given by licensing authority to petitioner on 10-10-75 to show cause by 17-10-75 as to why its application for renewal of licence may not be rejected as it had not deposited the amount despite demand from it. The statement in the notice that petitioner had not deposited despite demand was obviously incorrect as no demand was made till 1977. On 15-10-75 the petitioner sent reply intimating that after its appeal was accepted for 72-73 the amount of Rs. 4,000/- deposited by it became refundable. And when it prayed for adjustment the same was accepted and petitioner was required to deposit the balance only. Presumably the licence was renewed although no order appears to have been passed. Similar notice was issued on 18-10-76, on nearly the same allegation, for renewal of licence for 76-77. It was also replied and claim of adjustment was reiterated where after nothing happened. On 14-7-77 after expiry of more than two years since the adjustment, was made or granted a notice of demand was issued under Rule 18 requiring petitioner to deposit Rs. 4.000/-arrears of tax for month of March 75, Rs. 2188.12 interest and Rs. 3420.22 penalty on it. This shows that the statement in earlier notices dated 10-10-75 and 18-10-76 that petitioner had not deposited Rs. 4,000/- despite demand was factually incorrect. To this petitioner sent reply on 20-7-77 giving details of payment made by it in 1974-75 including the adjustment granted to it of Rupees 4.000/-. After receipt of this letter the Assistant Sugar Commissioner issued two letters on 2-8-77 one as usual asking petitioner to deposit Rs. 4,000/- else its licence shall not be renewed, and the other asking petitioner to supply treasury Challan No. etc. of payment of Rs. After receipt of this letter the Assistant Sugar Commissioner issued two letters on 2-8-77 one as usual asking petitioner to deposit Rs. 4,000/- else its licence shall not be renewed, and the other asking petitioner to supply treasury Challan No. etc. of payment of Rs. 4,000/- to enable him to consider the request made by petitioner for granting adjustment. Both these letters were replied on 5-8-77 and all that was said earlier was repeated. After considering reply of the petitioner the Assistant Sugar Commissioner by his letter dated 24-8-77 informed the petitioner that it was not justified in adjusting Rs. 4,000/- on its own. Such action of petitioner was described as irregular and illegal. He therefore directed petitioner to deposit the aforesaid amount along with certain other amounts by 1-9-77 otherwise its application for renewal of licence shall be rejected. From this letter it is established that amount of Rs. 4,000/- was due to petitioner from State Government but according to Assistant Sugar Commissioner petitioner was not entitled to adjust the amount of its own. This letter was again replied by petitioner on 30-8-77 bringing it to notice of Assistant Sugar Commissioner that all the amounts pointed out in the letter dated 24-8-77 were deposited by challan number mentioned in the letter and sum of Rs. 4,000/- was adjusted by assessing authority. On 9-9-77 the Assistant Sugar Commissioner finally rejected petitioner's explanation in respect of Rs. 4,000/- as unsatisfactory and gave him another opportunity to deposit the same. Treating this order as confirmation of notice of demand and rejection of petitioners claim that the amount had been adjusted petitioner approached the Sugar Commissioner by way of appeal which was not only dismissed on 24-10-77 but an additional demand of Rs. 7,220/- was created for 1972-73 by simple arithmetic that tax of two crushers for entire season was Rs. 44,550/- out of which petitioner had deposited Rs. 26,110/- including the disputed amount, and if Rs. 11,220/- was added to it, the sum for which relief was granted in appeal, petitioner, was still in arrears of Rs. 7,720,00. 2. Before considering whether petitioner was entitled to any adjustment or refund of Rs. 44,550/- out of which petitioner had deposited Rs. 26,110/- including the disputed amount, and if Rs. 11,220/- was added to it, the sum for which relief was granted in appeal, petitioner, was still in arrears of Rs. 7,720,00. 2. Before considering whether petitioner was entitled to any adjustment or refund of Rs. 4,000/- deposited by it either because it had the right to get the excess payment adjusted towards existing dues or because the authorities were debarred, from their own conduct, from claiming that petitioner was in arrears of 74-75 - once adjustment was allowed either expressly or impliedly there can be no two opinions that the order of Sugar Commissioner creating additional demand of Rs. 7,220.00 suffers from manifest error of law. He appears to have forgotten that while exercising appellate power and deciding dispute between owner of a unit and assessing or collecting authority he was required to act in accordance with law. The liability to pay tax, the manner of its levy, the method of its assessment and collection are provided under the Act and rules. It is under it that both owner of unit and authorities had to discharge their obligations. There is no provision empowering Sugar Commissioner to create any demand of tax for any month while deciding an appeal filed by owner of a unit. It is confined to consideration of grievance of appellant against assessment or penalty. While deciding it the Sugar Commissioner could no doubt pass such order as he thinks fit. But the ambit of it could not be stretched to passing an order to the prejudice of appellant. The appeal filed by petitioner was confined to validity or otherwise of the notice of demand for arrears of 74-75; while deciding it the appellate authority could reject petitioner's claim for refund and adjustment but it could not create any demand of tax for any month of 1972-73. In doing so it clearly overstepped its jurisdiction. From his order it appears that claim of petitioner that Rs. 4,000/- was due to it was not found incorrect. But the adjustment granted to it was refused because the Sugar Commissioner found that petitioner was still in arrears of Rs. 7,220/-. It has been seen above that this approach of Sugar Commissioner was fallacious. He had no jurisdiction to record finding that petitioner was in arrears of any amount of 1972-73. But the adjustment granted to it was refused because the Sugar Commissioner found that petitioner was still in arrears of Rs. 7,220/-. It has been seen above that this approach of Sugar Commissioner was fallacious. He had no jurisdiction to record finding that petitioner was in arrears of any amount of 1972-73. His order therefore is liable to be quashed. An attempt was made to justify it as an order passed in exercise of suo motu power. It has no merit as it is now well settled that before such power is exercised the authority concerned has to intimate beforehand, the ground on which the action is proposed to be taken. 3. It may now be examined if opposite parties are justified in demanding Rs. 4,000/- as arrears of 74-75. This depends on correctness of stand taken by Assistant Sugar Commissioner that petitioner acted illegally in adjusting the amount. It is curious that in none of the letters or notices or orders, except of course the last order of Sugar Commissioner, there is any whisper or denial that the amount of Rs. 4,000/- paid by petitioner for 72-73 was not due to it, nor did the Assistant Sugar Commissioner point out what was the illegality or irregularity committed by petitioner when it made an application that the amount be adjusted towards tax of 1974-75. In fact recovery by adjustment is one of the modes provided under sub-sec (6) of Section 3 of the Act. As the amount was due to petitioners the assessing or collecting authority did not commit any error in adjusting the same towards arrear of March, 75. We find no justification for demanding it subsequently. 4. It was argued by the learned Standing Counsel, Sri Vidya Bhusan Upadhya, that declaration made by petitioner that its said unit shall comprise of two crushers was irrevocable therefore the petitioner was liable to pay tax on second crusher as well irrespective of the consideration whether it operated or not. According to him the orders of assessing and appellate authority were rendered under mistake of law and the maximum benefit that petitioner could derive out of it was relief of Rs. 11,000/- granted by appellate authority on principle of finality of judgment but it cannot claim any adjustment or refund. According to him the orders of assessing and appellate authority were rendered under mistake of law and the maximum benefit that petitioner could derive out of it was relief of Rs. 11,000/- granted by appellate authority on principle of finality of judgment but it cannot claim any adjustment or refund. It was pointed out that petitioner's second crusher admittedly operated from 26th to 31st March on which tax was also paid therefore it was not open to petitioner to claim that its crusher did not operate at all and once it operated in the last week of March its operation has to be related back to Nov. 72 for payment of tax on assumed basis. The learned counsel maintained that even assuming that demand created of Rs. 7,220/- by Sugar Commr. was not in accordance with law the petitioner was not entitled to any refund at least and this courts extraordinary jurisdiction should not be utilised for petitioner's benefit who is trying to take advantage of error committed by Assessing and Appellate Authority. The argument is attractive no doubt but the basic assumption made by the learned counsel that irrevocability of option extends to number of crushers as well does not appear to be well founded. For this it is necessary to look into certain provisions of the Act and Rules. Sub-sections (1) and (1-b) of S. 3 read as under:- "(1) There shall be levied and collected in such manner as may be prescribed a tax on the purchase of sugarcane by the owner of- (a) a factory at the rate of (one rupee and twenty five paise per quintal) of sugarcane; and (b) a unit at the rate of (one rupee per quintal) provided that in the case of a unit, the tax shall be payable on the quantity of sugarcane actually purchased or, at the option of owner of the unit, on the quantity of sugarcane assumed, in accordance with the provisions of sub-section (1-b) to have been purchased by him. (1-b) The option referred to in the proviso to sub-section (1) shall be exercised by the owner of a unit by such date and in such form as may be prescribed and shall relate to the whole of an assessment year. The option once exercised shall be irrevocable for that year." 5. (1-b) The option referred to in the proviso to sub-section (1) shall be exercised by the owner of a unit by such date and in such form as may be prescribed and shall relate to the whole of an assessment year. The option once exercised shall be irrevocable for that year." 5. By this section charge is created and tax is leviable on purchase of sugarcane by owner of a factory or unit. For purposes of payment of tax the proviso permits facility of paying the tax either on sugarcane actually purchased or on the sugarcane assumed to have been purchased. But it has nothing to do with unit or the number of crushers that shall comprise the unit. The irrevocability for one year mentioned in subsection (1-b) is in relation to option for assessment on assumed basis and not to the number of crushers which comprise a unit as was suggested by Standing Counsel. The argument that as option has to be exercised by the owner in Form XIII, as provided in sub-s. ( 1-b) which specifically provides for declaration of number of crushers or bels it becomes a part of option itself and the irrevocability extends to both is based on misconception. As is clear from the proviso it is limited in operation to adopting one or the other method of paying the tax. The mention of the word 'unit' in it is to identify the class of sugarcane purchaser to whom it applies. Form XIII in which the option is made reads as under:- "In pursuance of the proviso to subsection (1) of Sec. 3 of the U.P. Sugarcane (Purchase Tax) Act, 1961 I/we opt to pay the tax in accordance with Schedule I for the assessment year ......and agree to pay the tax in the manner and by the dates prescribed under the Rules........... I/we hereby declare that my/our unit comprises following :- (a) Number of power crushers with size.... (b) Number of bels installed with type I/we shall start the working of the unit from I/we do hereby declare that the information given in respect of the composition of the unit is correct and complete." 6. It is clearly in two parts. In the first part the owner exercises the option and agrees to pay tax in accordance with Schedule 1 in the manner and on the dates prescribed in the rules. It is clearly in two parts. In the first part the owner exercises the option and agrees to pay tax in accordance with Schedule 1 in the manner and on the dates prescribed in the rules. This is the option provided in sub-section (1) of Sec. 3. But a unit may comprise of one or more than one crusher. The amount of tax depends on number of crushers or bels as is clear by notes (d) and (e) to Sch. 1 which provide; '(d) where a unit comprises more than one power crusher of the same category the specification given in col. 4 shall apply in such multiples thereof as there are power crushers set up in the unit. (e) where a unit comprises more than one power crusher of different categories the quantity of assumed purchase of cane shall be worked out separately for each category according to col. 4 and the quantum thus worked out shall be totalled." The second part namely the declaration that the unit shall comprise of following number of crushers or bels is for convenience of collecting tax. It cannot be read as part of option contemplated in proviso. The irrevocability provided in (1-b) is in respect of option to pay tax on assumed basis and not in respect of crusher which comprises a unit. This is further clear by examination of R. 13-A itself. It appears the option exercised in the proviso operates for one year but the unit of assessment for levy and collection is a month or part thereof. Sub-rules (2) and (3) of Rule 13-A provide. "(2) where the owner of a unit exercises the option, the quantity of sugarcane on the purchase of which he shall be liable to pay the tax shall be assessed on monthly basis according to specifications laid down in Schedule 1." (3) the owner of the unit exercising option shall pay the tax in respect of a unit by twenty-fifth of the month immediately preceding the month for which the tax is due. "The payment of tax in its turn depends on starting and closing of the unit which has to be intimated by the owner. Suppose an owner of a unit after exercising option intimates that it shall start its unit in February. Can the authorities charge tax for earlier months because it had exercised option. The answer is plainly in the negative. Suppose an owner of a unit after exercising option intimates that it shall start its unit in February. Can the authorities charge tax for earlier months because it had exercised option. The answer is plainly in the negative. The irrevocability contemplated therefore does not apply to declaration relating to number of crushers or bels which shall comprise the unit. It is liable to change and alteration. If declaration for number of crushers would have been irrevocable then the requirement of mentioning number of crushers, their size and use in Form VII in each month would have no meaning. The payment of tax is related to number of crushers, their size and working. And as the unit is the month the payment shall vary according to these details. In a case where the unit comprises of more than one crusher and the owner despite the declaration in Form VIII about the number of crushers informs the assessing authority before the start of unit that it shall operate specified number of crushers then the question is whether liability to pay tax of owner is on all crushers declared to comprise the unit or the same could be modified or altered. It has been seen above that irrevocability provided for in sub-sec. (1-b) applies to option only and not to declaration about the number of crushers. It is true that the section or the rules framed thereunder do not specifically provide or permit the owner to change its declaration in respect of number of crushers. But this is apparent from a look at sub rule (1-a) of Rule 13 and provisos to sub-s. (2) which give a detailed procedure for intimation, closure, levying and collecting tax on monthly or part of month basis etc. Sub-rule (2) of R. 14 requires owner of a unit opting for being assessed on assumed basis to submit return in Form VIIA which is scrutinised by assessing authority under sub-r. (2) of R. 15 and if he finds that amount is not correctly stated then he may direct owner to pay the balance within seven days on failure of which notice of demand may be issued under Rule 18. The return required to be filed under VII-A is monthly. Similar return is required to be filed by owner of unit who is assessed on actual purchases in Form VII. The return required to be filed under VII-A is monthly. Similar return is required to be filed by owner of unit who is assessed on actual purchases in Form VII. But a comparison of the two forms indicates that in Form VII the owner is required to declare its purchases in a month irrespective of number of crushers whereas in Form VII-A the name of unit, number of crushers and bels used, their size and type etc. have also to be mentioned. This obviously is with purpose to enable assessing authority to know the correct amount of tax payable by an owner in each month. As the amount of sugarcane is assumed to have been purchased in a month is related to number of crushers and bels in Schedule I it necessarily follows that it can be varied or altered subject to intimation by owner and its correctness or acceptance by assessing authority about number of crushers comprising the unit in a particular month. If the owner informs, before start of unit, that it shall comprise of one crusher only and it is accepted then the declaration in Form VIII stands modified and the unit comprises of only one crusher. The result is the same if alteration results due to finding recorded by appellate or assessing authority. In this view the petitioner's unit comprised of one crusher only till March. It was not liable to pay tax on the second crusher prior to it. The amount of Rs. 4,000/- therefore, paid by it was due from the State Government which was to be adjusted before making any recovery of any dues. The order of Sugar Commissioner creating additional demand of Rs. 7,220.00 and the demand notice dated 14-7-77 are bad in law. 7. In the result this petition succeeds and is allowed. The order dated 24-10-77 passed by Sugar Commissioner and the notice of demand dated 14-7-77 issued under R. 18 are quashed. The petitioner shall be entitled to its costs.