JUDGMENT K.N. Singh, J. - By means of this petition under Article 226 of the Constitution the petitioners have challenged legality and validity of the order of the State Government dated February 16, 1982, refusing to grant exemption to the petitioners under S. 3(4) of the U. P. Electricity (Duty) Act, 1952, and the issue of notice of demand dated March 3, 1982, directing the petitioners to deposit the disputed electricity duty. The petitioners have claimed relief for the issue of a writ of certiorari quashing the order of the State Government dated February 16, 1982, as well as the notice of demand dated March 3, 1982. 2. M/s. Hindustan Aluminium Corporation Ltd. petitioner No. 2, hereinafter referred to as the Hindalco' is a company engaged in the production of aluminium, a modern essential metal. Ranusagar Power Company Ltd., petitioner No. 1, hereinafter referred as 'renusagar' is a subsidiary company of the Hindalco wholly owned by it. Petitioners Nos. 3 and 4 are share holders of Renusagar and Hindalco. The Hindalco established an aluminium factory and installed a plant at Renukoot in district Mirzapur for the manufacture of aluminium ingots. The Government of Uttar Pradesh agreed to supply 55 M.W. of electrical power to the Hindalco on continuous and uninterrupted basis at the rate of 19,977.17 P. per unit for a period of 25 years from its Rihand-Hydro Electric Scheme. Since the State was unable to meet the extra requirement of energy, it granted sanction to Hindalco under Section 28 of the Indian Electricity Act, 1910, permitting it to set up a generating station at Renusagar near Renukoot through its subsidiary company, namely, the Renusagar power Company Ltd. The Renusagar's first unit started generating power in 1967 and the other in 1968 generating, a total of 135 M.W. power, which was exclusively consumed by Hindalco. With the development and expansion of Hindalco its requirements of power increased and as the State Government and the State Electricity Board were not able to supply the requisite quantity of power to Hindalco, it took steps after obtaining the necessary sanction for setting up third and fourth units of Renusagar plant. The third unit was commissioned on 2-11-1981 generating an additional power of 67.5 M.W. The fourth unit was commissioned on 19-4-1983 for generating 67.5 M.W. electricity. The third unit was commissioned on 2-11-1981 generating an additional power of 67.5 M.W. The fourth unit was commissioned on 19-4-1983 for generating 67.5 M.W. electricity. Thus, in all, the Renusagar has been generating and supplying electricity to the Hindalco to the extent of 270 M.W. 3. The U.P. Electricity (Duty) Act, 1952 was enacted by the State Legislature of Uttar Pradesh to levy duty on the consumption of electricity. Section 3 provides that there shall be levied for and paid to the State Government electricity duty on the energy sold to a consumer by t a licensee or consumed by a licensee or consumed by any other person from his own source of generation. The duty so levied shall be payable to the State Government at such rate or rates as may from time to time be fixed by the State Government. Sub-section (2) of S. 3 provides that the electricity duty shall not exceed twenty five per cent of the rate charged. Section 3(4) confers power on the State Government to allow exemption from payment of electricity duty in public interest having regard to the various factors specified therein. The Hindalco applied for exemption from electricity duty under Section 3(4) of the Act on September 28, 1970. The State Government by its order dated March 29, 1972, rejected the application and refused to grant exemption. Petitioners Nos. 1 and 2 filed a writ petition in this Court, it being Writ petition No. 4521 of 1982, challenging the order of the State Government on the ground that the State Government had failed to apply its mind to the relevant matters and it had taken into account irreleveant considerations, in refusing to grant the exemption. The State Government contested the writ petition. A Division Bench of this Court by its order dated 17th May 1974, quashed the State Government's order and directed it to consider the application of the petitioners again in accordance with law and in the light of the observations contained in the judgment. The State Government preferred appeal against that judgment before the Supreme Court but the special leave petition was dismissed and the High Court's judgment became final. 4. In pursuance of the High Court's judgment the State Government took steps to consider the matter afresh. The State Government preferred appeal against that judgment before the Supreme Court but the special leave petition was dismissed and the High Court's judgment became final. 4. In pursuance of the High Court's judgment the State Government took steps to consider the matter afresh. It appointed a Committee of Senior Officers of the Government presided over by the Chief Secretary to consider the question of grant of exemption and to afford opportunity of hearing to the petitioners. The petitioners submitted supplementary representations and they also placed relevant materials before the Government in support of (heir claim for exemption. The matter regarding the petitioner claim for exemption was referred to the Controller of Banking and Accounts, U.P. State Electricity Board (Sri B.B. Jinda) for his report. He examined the matter in detail in the light of the Judgment of this Court dated May 17, 1974, and submitted his report to the State Government in his report, Shri Jindal recommended that Hindalco and Renusagar should be granted complete exemption till 1980 and the position should be reviewed thereafter. It appears that the State Government did not accept the report of Shri Jindal, it accordingly referred the matter afresh to the Chief Electrical Inspector to the Government of Uttar Pradesh. The Chief Electrical Inspector submitted a report which did' not contain any recommendation. It appears that the report of the Chief Electrical Inspector was incomplete and the same was also not accepted by the Government. Thereafter the State Government referred the matter to Dr. Rajagopalan, Chief Adviser (Cost) Ministry of Finance, Government of India. Dr. Rajagopalan submitted a lenghty report to the Government holding that the levy of duty would not affect the profitability of Hindalco and the burden of duty would be negligible and it will not affect its financial position. Placing reliance on the opinion of Dr. Rajagopal the State Government issued a speaking order on February 16, 1982, rejecting the claim of the petitioners for exemption. On March 3, 1982, the Assistant Electrical Inspector, Mirzapur Zone, issued a notice directing Renusagar and Hidalco to deposit a sum of Rs. 11,96,83153.80 as electricity duty for the period 1-9-1970 to December 1981 within fifteen days failing which the amount would be recovered as arrears of land revenue. Aggrieved the petitioners filed the instant petition challenging the validity of the order of the State Government dated 16-2-1982 also the demand notice dated 3-3-1982. 11,96,83153.80 as electricity duty for the period 1-9-1970 to December 1981 within fifteen days failing which the amount would be recovered as arrears of land revenue. Aggrieved the petitioners filed the instant petition challenging the validity of the order of the State Government dated 16-2-1982 also the demand notice dated 3-3-1982. 5. The U.P. Electricity (Duty) Act, 1952 U.P. Act No. XXXIII of 1952 was enacted by the State Legislature imposing levy on the consumption of electrical energy. The Act as originally enforced did not contain any provision for the levy of duty on the consumption of power generated for its own use. On the other hand, section 9 of the Act contained exemption from electricity duty on the power generated by a consumer for his own use. The U.P. Ordinance No. 14 of 1970 was issued in August, 1970, whereby the exemption contained in Section 9 of the Act. was withdrawn and the State Government was empowered to grant exemption in specified circumstances. The Ordinance was later enacted into an Act, the U.P. Electricity Duty (Amendment) Act, 1970 (U.P. Act No. II of 1970). Section 10 of the Amending Act deleted Section 9 of the principal Act and Section 3 was substituted. The substituted Section 3 of the -Act levies duty on the energy consumed by a person from his own sources of generation. Sub-section (4) of section 3 of the Act confers power on the State Government to grant exemption from electricity duty. Section 3(4) of the U.P. Electricity (Duty) Act, 1952 is in the following terms : "3(4) The State Government may, in the public interest. having regard to the prevailing charges for supply of energy in any area, the generating capacity of any plant, the need to promote industrial production generally or any specified class thereof and other relevant factors, either fix different rates of electricity duty in relation to different classes or consumption of energy or allow any exemption from payment thereof." The above provision confers power on the State Government to grant exemption from duty in public interest having regard to specified factors, namely prevailing charges for supply of energy in any area, generating capacity of any plant, need to promote industrial production generally or any specified class thereof and other relevant factors. These are the specified factors which are required to be taken into account in granting exemption in public interest. These are the specified factors which are required to be taken into account in granting exemption in public interest. Other relevant factors may also be considered which may include variety of matters, for example, profitability of the Unit, the economic viability of the Unit, scarcity or shortage of the produce etc. The legislature did not lay down any exhaustive list of factors which may be taken into account while considering the grant of exemption and as such it used the expression "other relevant factors" which confer wide jurisdiction on the State Government to take into account any relevant factors. The three matters which have been specified in sub-section (4) of Section 3 cannot be ignored by the Government while considering the question of ' exemption. On the other hand, it must address itself to these factors before exercising its power with regard to the grant of exemption. It cannot refuse to grant exemption after considering only one of the factors as specified in the section, instead it must consider all the factors specified in the section as well as other relevant factors, if I any, brought to its notice. In the earlier writ petition, a Division Bench of this Court interpreted S. 3(4) of the Act and it held that while considering the question of exemption under Section 3(4) of t he-Act, the Government was under a mandatory duty to consider the following five factors : 1. How did the cost of power to the Corporation compare with the cost of power to similar industries in other States? 2. Is the spending of huge sums by the Government of India in foreign exchange and its keenness to attain self sufficiency in the country by increasing its indigenous production in public interest. 4. The commitment made by the Government of Uttar Pradesh to the Hindalco to supply power at cheap rate as noticed in the report of Dr. Nagarajarao. 5. The effect of imposition of duty on the margin of profit available to Hindalco. This Court by its judgment dated 17-5-1974 remanded the matter to the State Government for reconsidering the question of grant of exemption from duty and in doing that it made it clear that the State Government must consider amongst others the five factors as noted earlier. The effect of imposition of duty on the margin of profit available to Hindalco. This Court by its judgment dated 17-5-1974 remanded the matter to the State Government for reconsidering the question of grant of exemption from duty and in doing that it made it clear that the State Government must consider amongst others the five factors as noted earlier. Since the judgment become final between the parties, the State Government was bound to consider each of the aforesaid five factors pointed out by the High Court in its judgment. It is needless to point out that the High Court judgment which has become final was binding on the State Government and being an executive authority, was under a legal duty to carry out the directions contained in the judgment. 5A. Sri S. S. Ray, learned counsel for the petitioners, urged that the impugned order of the State Government is vitiated in law as the five factors. declared to be relevant by the High Court judgment dated 17-5-1974, as enumerated earlier, have either not been taken into account or declared to be irrelevant and the Government did not apply its mind to the vital essential matters relevant for the purpose of grant of exemption. There is apparent error and complete non application of mind to the disregard of the relevant matters. We will consider the question by referring to the judgment of the High Court and to the observations made in the impugned order. 5B. The Division Bench of the High Court in its earlier judgment, while interpreting section 3(4) of the Act observed that five vital factors were relevant which were necessary to,be considered by the Government. One of such factors was the cost of power to Hindalco as compared with the cost of power to other industries in other States. While considering the question of cost of power the Division Bench observed as under : "Moreover, it has been stated that the average cost of electricity consumed by the Corporation is much higher than the cost in any other State. The question which really required consideration at the hands of the State Government was not whether the electricity duty was being charged in other States on own generated electricity but how did the cost of power to the Corporation compare with the cost of similar industries in other States. The question which really required consideration at the hands of the State Government was not whether the electricity duty was being charged in other States on own generated electricity but how did the cost of power to the Corporation compare with the cost of similar industries in other States. From the statistics set out by the petitioners in the writ petition it is cellar that the costs of electricity to the Corporation is much higher than the costs of inclusive of duty to aluminium industries in other States." In their representation before the State Government the petitioners had placed material to show that the cost of power of Hindalco wsa higher if compared with the costs of power in other aluminium factories in the State of Kerala, Tamil Nadu and West, Bengal. In its representation filed in August, 1980, in Annexure XXXIV tote petition, the petitioners gave a comparative chart showing the cost of power to Hindalco and Indaclo (Indian Aluminium Company). The petitioners' submission before the State Government was that in comparison to aluminium factories situated in other States the cost of power to Hindalco was higher which would affect production aluminium. In this context it was pointed out that the aluminium being an essential commodity under the Essential Commodities Act, 1955. And it being a scheduled industry under the Industries (Development and Regulation) Act, uniformity in the cost of power should he maintained and for that reason the petitioners claimed exemption. 6. Hindalco is the only company manufacturing aliminium in the State of Uttar Pradesh. There is no other industrial unit producing aluminium in the State of Uttar Pradesh, thus there was no question of comparison of cost of power to other industries within the State of Uttar Pradesh. The State Government was under a mandatory duty to consider and compare the cost of power to Hindalco and other aluminium units situated in the other States. While dealing with this question the State Government refused to do so. The State Government observed as under in the impugned order : "While it may be fair to compare the costs of power to Hindalco as compared to other similar industries within the State of U.P., it may not be fair to expect that the cost of energy should be the same in all States throughout India. Costs and conditions of power supplied may differ from State to State. Costs and conditions of power supplied may differ from State to State. What is relevant is the overall profit taking all factors of cost into consideration. It would not be relevant to compare power cost alone without reference to other factors which may give different kinds of advantages in different States." The above extract leaves no room for any doubt that the State Government held that the comparison of the cost of power to Hindalco with the cost of power to industries in other States was not relevant. This was done in utter disregard of the law declared by the earlier Division Bench of the Court. Each of the factors declared by the judgment dated 17-5-1974 is disjunctive and each one of them had to be dealt with separately and independently by the State Government. It was not open to the Government to ignore any of them on the ground of relevancy or otherwise. Once the High Court had recorded a finding that the question of comparison of cost was relevant it was not open to the State Government to ignore the same on the ground of relevancy. Requisite material and dates regarding the cost of power to aluminium industries of other States had been placed before the Government, but it refused to consider the same. 7. Learned counsel for the petitioners urged the exemption was sought on the basis of user of aluminium but the State Government in the impugned order failed to take into account the relevant factors connected with the user of aluminium. The petitioners' case before the State Government was that on the basis of the use to which the aluminium is put exemption should be granted. In this connection, the petitioners urged that 60% of the aluminium produced by Hindalco is supplied to electrical industries for rural electrification, cables and conductors, transmission and distribution of power. Sixteen per cent of the production is used for manufacturing of utensils for the benefit of general people and the remaining quantity of aluminium is supplied to the Defence and transportation. In the earlier petition also the petitioners had raised a similar grievance that the user of the aluminium should be taken into account in considering the question of exemption. Sixteen per cent of the production is used for manufacturing of utensils for the benefit of general people and the remaining quantity of aluminium is supplied to the Defence and transportation. In the earlier petition also the petitioners had raised a similar grievance that the user of the aluminium should be taken into account in considering the question of exemption. The Division Bench in the earlier judgment had observed that the user of aluminium was relevant consideration in order to determine as to whether or not it would be in public interest to grant exemption to Hindalco. 8. In the impugned order, the State Government dealt with this question in the following manner : "This convention has been made by the Corporation with a view to emphasise importance of aluminium and its uses. Although copy of the industrial licence for production of aluminium granted to M/s. Hindalco by the Government of India is not available in the power Department, yet this version in respect of use of aluminium may be assumed to be correct. Government is also aware of the importance of aluminium and its use. But this by itself fails to make out a case for exemption from payment of electricity duty. It may be relevant to mention that the said duty will not affect the productivity of aluminium by M/s. Hindalco will impose a very negligible burden on the industry." The State Government no doubt referred to the use of aluminium but it failed to take into consideration vital relevant factors arising out of the use of aluminium. While considering this matter the State Government should have made an enquiry as to what extent will the imposition of duty affect the electrical industry which uses 60 percent of Hindalco's production. Further the Government should have addressed itself to the effect of the imposition of duty upon the utensils manufacturing units which use 16% of the Corporation's production. Similarly, the Government should have considered the effect of the imposition of duty on the supplies made to the defence, Ordinance and Transport Departments. The State Government did not hold any enquiry into the matter, nor it applied its mind to the matters. These are vital factors in relation to public interest and need to promote industrial product on in vital industries, such a electrical industry, Defence, transportation and utensil manufacturing industry. The State Government did not hold any enquiry into the matter, nor it applied its mind to the matters. These are vital factors in relation to public interest and need to promote industrial product on in vital industries, such a electrical industry, Defence, transportation and utensil manufacturing industry. The State Government did not apply its mind to these factors, instead it rejected the petitioners' claim on the plea that this ground itself was not Sufficient for grant of exemption as the duty imposed is negligible burden on the industry. 9. The demand for aluminium was so great that the Government of India despite severe stringency in the availability of foreign exchange has been allowing import of aluminium. The promotion of indigenous production of aluminium was responsible for saving foreign exchange. The petitioners pleaded before the State Government that the saving of foreign exchange would be in public interest and if exemption is granted it would promote the aluminium industry in the State which would go a long way to conserve foreign exchange. In this context the petitioners quoted figures and referred to the various reports to demonstrate that the Government of India gave high priority to the promotion of aluminium industry. The petitioners had placed material before the State Government in support of their contention, which is contained in the extract of Lok Sabha proceedings dated 20th June, 1980. While giving reply to the question made by Sri Jyotirmay Basu, the then Minister of Steel and Mines, Sri Pranab Mukerji, had given the quantity of aluminium imported and its value from 1971 to 1980 year wise. He also stated that the quantum of import of aluminium was determined from time to time, keeping in view the demand for the metal and the estimate of indigenous production. India has been importing large quantities of aluminium since September, 1977. The statement made on the floor of the House of Lok Sabha clearly indicated that the Government of India has been spending huge sums of foreign exchange for import of aluminium, even though it was keen to attain self sufficiency of aluminium in the country by increasing its indigenous production in public interest. 10. The statement made on the floor of the House of Lok Sabha clearly indicated that the Government of India has been spending huge sums of foreign exchange for import of aluminium, even though it was keen to attain self sufficiency of aluminium in the country by increasing its indigenous production in public interest. 10. In the impugned order while considering this' question the State Government observed as under : "The Corporation has also emphasised that the Government of India is spending a huge sum of money in foreign exchange to meet the requirements of aluminium in India, with a view to increasing the aluminium production by Hindalco. Electricity should be made available at cheap rate and exemption should be granted to the Corporation from payment of electricity duty. In this connection it may again be pointed out that the imposition of electricity duty will not affect the productivity of aluminium by M/s. Hindalco as electricity duty is negligible as clearly made out in earlier paragraphs. Accordingly, the electricity duty is not likely to have any adverse effect on foreign exchange of the country." The above observations of the State Government clearly show that the State Government did not address itself to the need of promoting aluminium industry for increasing production of aluminium which would in the long run save foreign exchange. The effect on the production of aluminium by the Hindalco was not relevant. What was relevant was the need to promote industrial production and in that context it was necessary to examine how the imposition of duty affected the need to promote indigenous production and to what extent it would affect the foreign exchange. The State Government failed to consider relevant matters, instead it took into consideration matters which were not relevant with regard to the question of foreign exchange. 11. The question regarding public interest and need to promote indigenous industrial production was related with the question of exemption of duty. These matters were vitally connected with the question of exemption of duty. One factor by itself may not justify the exemption from duty but having regard to the cumulative effect of various factors, it may be necessary in public interest to grant exemption. The State Government refused to consider the impact of each of the factors on the ground that the production of electricity duty was negligible on the production of aluminium by Hindalco. The State Government refused to consider the impact of each of the factors on the ground that the production of electricity duty was negligible on the production of aluminium by Hindalco. While the imposition of duty on the production of aluminium may be one of the factors relevant to be considered but that does not mean that other factors which are relevant and have been specified in section 3(4) of the Act and also in the judgment of the earlier Division Bench could be omitted from consideration. 12. Shri S.S. Ray, learned counsel for the petitioners, then urged that the historical events and the correspondence between the Government and Shri G.D. Birla, which led to the setting up of Hindalco plant at Renukoot, was necessary to be considered. According to him, the State Government had made commitments and agreed to supply electricity to Hindalco at cheap rate without charging any electricity duty. In this connection, he made a reference to the report of Dr. Nagarajarao Committee and also to the report of the Industrial Licensing Policy Enquiry Committee Report dealing with the allegations made against Birla group of industries, The report is known as Dutta Committee Report. The State Government did not consider the historical background and the assurance and commitments made by it to Hindalco. 13. It is necessary to refer to the historical background and commitments relied upon by the petitioners. Since aluminium was an essential raw material for a large number of industries of national and strategic importance, the Central Government took a policy decision to allow private sector to set up aluminium plant. The Government of India appointed a Committee of experts headed by Dr. Nagarajarab in the year 1956 for finding out location of a new aluminium plant. In its report, Nagarajarao Con inittee recommended Rihand (Renukoot) district Mirzapur, as one of the places for setting up of aluminium plant. This recommendation was made having regard to the offer made by the State Government to supply electrical energy at the rate of Rs. 114/- per KW a year. The State Government entered into an agreement with Hindalco on 29-10-1959. The agreement contained specified condition that the power supplied to Hindalco for industrial purposes would be exempt from payment of electricity duty. 114/- per KW a year. The State Government entered into an agreement with Hindalco on 29-10-1959. The agreement contained specified condition that the power supplied to Hindalco for industrial purposes would be exempt from payment of electricity duty. The Chief Minister of Uttar Pradesh entered into correspondence with Shri G. D. Birla and made offer to him that power used for industrial purposes would be exempt from duty. These facts were noted in the Dutta Committee Report. The relevant extract of Dutta Committee Report is as follows : "Finally in April, 1959, the U.P. Govt. confirmed in a latter to Shri G.D. Birla that the Government would supply at 90% load factor a maximum of 55 M.W. of power from the Rihand Power Project, at the rate of Rs. 150/ per KW/year and that the rate would be fixed for a period of 8 years. It was also mentioned' that power used for industrial purposes was being exempted by the State Government from payment of electricity duty and therefore, Hindustan Aluminium would also enjoy this exemption. 14. Placing reliance on the report of Nagarajarao Committee and the report of Dutta Committee and also on the agreement entered into between Hindalco and the State Government the petitioners pressed their claim for exemption from duty before the Government. It was urged before the State Government that since the Government had given assurance and made commitment to supply electricity, at cheap rate they were entitled to exemption from electricity duty. In the impugned order this submission of the petitioner was rejected in the following words : "Here it may be stated that there is nothing on the record to show that any assurance or commitment was given by the State Government as contained by the Corporation." 15. There was clear material on record before the Government to show that commitments and assurances had been given to Hindalco. The extracts of the reports of Nagarajarao and Dutta committed had been placed before the Government by the petitioners along with their representation dated 6-9-1975, a copy of which has been filed as Annexure to the writ petition. If the original reports of Nagarajarao Committee and Dutta Committee were not available with the Government, the same could have been obtained from the Government of India. If the original reports of Nagarajarao Committee and Dutta Committee were not available with the Government, the same could have been obtained from the Government of India. In fact during the course of hearing of the writ petition, the report of the Dutta Committee was produced before us which contained the portion which we have extracted above. The agreement entered into between the Government and Hindalco was certainly with the State Government. The State Government committed a pa tenter or in holding that there was nothing on record to show that any assurance or commitment had been given by the State Government. The findings recorded in the impugned order in this regard are perverse and in total disregard of the material on record. 16. In this connect in it would be relevant to point out that on the earlier occasion also when the petitioners had challenged the order of the State Government refusing to grant exemption from duty they had referred to the assurance and commitments made by the Sate Government and they had referred to the report of Nagarajarao Committee and Dutta Committee. In the earlier writ petition also the State Government had in its counter- affidavit stated that the background in which the committees were set up and the final decision arrived at by the Government of India on the reports submitted by the Committees were not known, and these facts were irrelevant for the purpose of deciding the question of exemption. The earlier Division Bench dealt with this question and observed as under : "The background in which Dr. Nagarajarao Committee was appointed and its report was accepted ought to have been in the knowledge of the Electricity Department of the State Government. If the Government was not aware of the reports it shows that its officers were not doing their duty properly and the Government was kept in the dark about the relevant facts relating to aluminium industry." The State Government has again committed the same error. The relevant material in this respect had been placed by the petitioners before the Government along with their representation dated 6-9-1975. If there was any doubt about correctness of the extracts of those reports, the State Government could have made an enquiry from the Government of India and obtained copies of those reports as it had done in other matters. The relevant material in this respect had been placed by the petitioners before the Government along with their representation dated 6-9-1975. If there was any doubt about correctness of the extracts of those reports, the State Government could have made an enquiry from the Government of India and obtained copies of those reports as it had done in other matters. In spite of the observations of the earlier Division Bench of this Court and in spite of the presence of material on record, the State Government refused to consider the relevant matter in an unreasonable and unjustified manner. The petitioners' submission regarding assurance and commitments given to them by the State Government should have been considered and the failure of the Government to consider the same amounts to non-consideration of a relevant factor which would vitiate the entire order. 17. Shri Ray, learned counsel. for the petitioners, urged that the proceedings before the Government being quasi-judicial in nature, it was incumbent upon the Government to act in a fair and just manner consistent with the principles of natural justice in affording personal hearing to the petitioners. He raised a grievance that the State Government acted in violation of the principles of natural justice inasmuch as reports, and documents which were considered and used against the petitioners were never made available to them, with the result the petitioners could not effectively place their case before the Government. 18. The petitioners' grievance in this respect is twofold. Firstly, it was urged that the Government passed the impugned order placing total reliance on the report of Dr. Rajagopalan who himself placed reliance on a number of reports and documents which were never made available to them, these are as follows : (i) Report of the Working Group on Aluminium, 1970. (ii) B.I.C.P. Report on interim relief to Aluminium Industry, 1975. (iii) B.I.C.P. Report on Aluminium and its contract, December, 1973. (iv) B.I.C.P. Report on revision of retention price for levy of Aluminium 1976. (v) B.I.C.P. Report on cost price of study on the Aluminium Industry, 1978. Secondly the petitioners' grievance is that after the personal hearing was concluded, the Government obtained certain information from the Government of India which was conveyed to it by a letter of the Government of India dated 31-1-1981 and placing reliance upon the same, the petitioners claim for exemption was rejected by the Government. Secondly the petitioners' grievance is that after the personal hearing was concluded, the Government obtained certain information from the Government of India which was conveyed to it by a letter of the Government of India dated 31-1-1981 and placing reliance upon the same, the petitioners claim for exemption was rejected by the Government. The information contained in the letter was never brought to the notice of the petitioners, otherwise they could have placed sufficient material before the Government to show that the information contained in the letter was incorrect and wrong. Learned Advocate General urged that the proceedings under S. 3(4) of the Act before the Government were not quasi-judicial and the State Government was not under an X legal duty to afford opportunity of hearing to the petitioners, although hearing was given to' them in pursuance of the directions of the earlier Division Bench of this Court. Apart from personal hearing, the petitioners were not entitled to any other opportunity including opportunity to obtain copies of the reports referred to in the report of Dr. Rajagopalan. Similarly they were not entitled to know the contents of the letter of the Government of India dated 31-1-1981. 19. Section 3(4) of the Act does not contain any provision for affording opportunity of hearing to the party claiming exemption from duty. The power conferred on the State Government is administrative in nature. In the absence of any provision, express or implied, the State Government is not required to act in a quasi-judicial manner. The provisions of S. 3(4) do not indicate that a duty is cast on the State Government to act judicially or to consider and decide the question of exemption in a judicial manner. It is difficult to accept the petitioner's submission that the proceedings before the State Government are quasi-judicial in nature, but at the same time it is difficult to accept the submission made on behalf of the State that principles of natural justice were not required to be followed by the State Government in considering the grant of exemption. It is difficult to accept the petitioner's submission that the proceedings before the State Government are quasi-judicial in nature, but at the same time it is difficult to accept the submission made on behalf of the State that principles of natural justice were not required to be followed by the State Government in considering the grant of exemption. Initially the principles of natural justice were confined to judicial and quasi- judicial proceedings and the authority exercising administrative power was not necessarily required to act judicially or to comply with the principles of natural justice, but with the progress of administrative law in recent years and in the back-drop of the concept of rule of law, the distinction between quasi-judicial and administrative proceedings has been reduced to a thin line. Referring to this aspect the Supreme Court in A.K. Kraipak v. Union of India, AIR 1970 SC 150 observed that the ultimate object and purpose of principles of natural justice is to ensure justice and fair play in both kinds of proceedings to avoid arbitrary and unreasonable exercise of power. 20. In M/s. Travancore Rayons Ltd. v. Union of India, AIR 1971 SC 862 , the proceedings before "the collector were administrative in nature and yet the Supreme Court held that since the questions raised before the collector were of a complicated nature and for its proper appreciation required familiarity with the composition and physical properties of nitro cellulose and of the substance produced by the company, it was necessary for the Collector as well as for the Government of India to afford opportunity of hearing to the company. The Supreme Court observed that even though the statutory rules do not require that personal hearing should be given but if in appropriate case where complicated and difficult questions requiring familiarity with the technical problems are raised, personal hearing if given would be conducive to 'better administration and more satisfactory disposal of the grievances of the citizens. In Amal Kumar v. State of Assam, AIR 1971 Assam 32, the Assam High Court almost in a similar matter of grant of exemption held that personal hearing was necessary to be given to the party concerned by the Government. In Amal Kumar v. State of Assam, AIR 1971 Assam 32, the Assam High Court almost in a similar matter of grant of exemption held that personal hearing was necessary to be given to the party concerned by the Government. Placing reliance on the aforesaid decisions, the earlier Bench in its judgment dated 17-5-1974 had observed that even though it was not strictly necessary but since the case relating to grant of exemption raised serious and complicated questions involving sifting of reports, statistics and other dates, it would be conducive to justice and fair play if the Government grants a personal hearing to the petitioners. It was in pursuance of the directions of the Bench that the State Government afforded opportunity of hearing to Hindalco. 21. In view of the directions of the earlier Division Bench of this Court and also in vie of the principles of fair play and justice an having regard to the complex questions involved in the matter, the State Government was under a legal duty to afford opportunity of personal hearing to the petitioners. The ultimate object of personal hearing is to afford opportunity to the party concerned to place its case before the authority and also to know the material which may be proposed to be utilised against it. It is difficult to lay down the extent and parameters of the concept of hearing, as in ours opinion, the extent of personal hearing would depend on the facts and circumstances of each case. A simple oral hearing may be found sufficient in a particular case, while in another case facts and circumstances may be such as to afford further opportunity to inspect the documents which may be proposed to be utilised against the party. In the instant case the nature of enquiry embarked by the State Government was so complex that it referred the matter to Dr. Rajagopalan for expert opinion. The enquiry involved examination of various data, reports and sifting of materials. In the circumstances a bare opportunity of oral hearing could not meet the ends of justice. If any clement, report or material was considered by 'the Government against the petitioners, the principles of natural justice required that the same should have been made available to the petitioners at least for their perusal or inspection. 22. Keeping in view the aforesaid principles, we would now examine the petitioner's grievance. Dr. If any clement, report or material was considered by 'the Government against the petitioners, the principles of natural justice required that the same should have been made available to the petitioners at least for their perusal or inspection. 22. Keeping in view the aforesaid principles, we would now examine the petitioner's grievance. Dr. Rajagopalan submitted his report to the State Government in January, 1979. The impugned order shows and it is also admitted in paragraph 54 of the counter-affidavit filed on behalf of the State Government that the order is mainly based on the report of Dr. Rajagopalan. Admittedly, Dr. Rajagopalan placed reliance on the report of Working Group on Aluminium set up by the Government of India in 1970 and various other reports of Bureau of Industrial Cost and Price, for the sake of brevity referred to as BICP', submitted to the Government from time to time. Dr. Rajagopalan referred to these reports in extenso in support of his opinion and he annexed extracts of some of these reports as Appendix to his report. When a copy of Dr. Rajagopalan's report was handed over to Hindalco for its comments, it made repeated requests by way of letters dated 13-7-1979, 8-1-1980 and 3-6-1980 to the State Government to grant permission for inspection of those reports. The petitioners pleaded before the State Government that in the absence of these reports, it was not possible to give any effective comment on the report of Dr. Rajagopalan. The State Government by its letter dated August 2, 1980 informed the petitioners that there was no question of making available the reports referred to by Dr. Rajagopalan as the Government did not feel it necessary to supply or to allow them inspection because the reports on which the Government would rely had already been made available to Hindalco. 23. It is not disputed that the petitioners were not afforded opportunity of inspection of the reports on which Dr. Rajagopalan placed reliance in submitting his report on the claim for exemption. During the course of hearing the learned Advocate General stated before us that the aforesaid reports were confidential in nature and copies thereof were not available with the State Government, as such the petitioners could not be given a copy or permitted to inspect the same. Copies of the reports were, however, obtained. During the course of hearing the learned Advocate General stated before us that the aforesaid reports were confidential in nature and copies thereof were not available with the State Government, as such the petitioners could not be given a copy or permitted to inspect the same. Copies of the reports were, however, obtained. by the learned Advocate General and placed before us during the course of hearing. Learned counsel for the petitioners referred to those reports to support his contention that Dr. Rajagopalan had extracted some portions of those reports out of context in support of his conclusion. He did not refer to other portions of the report which gave a totally different picture. Had the petitioners been given opportunity to inspect those reports, they would have pointed out the errors apparent in the report of Dr. Rajagopalan. The grievance raised by the petitioners in this respect is substantial Counsel for the petitioners referred to these reports to show that the findings recorded by Dr. Rajagopalan were not supported by the material contained in those reports. We have referred to these matters in detail while dealing with the question of margin of profit of Hindalco. In the circumstances it is evident that the non-disclosure of the aforesaid reports to the petitioners seriously prejudiced them. Had the petitioners been given opportunity to inspect those reports they would have pointed out the errors in the report of Dr. Rajagopalan. Having regard to the complexity of the questions raised before the State Government and the technical nature of the enquiry which was being held by the Government and also keeping in mind the principles of fair play and justice we are of the opinion that the State Government should have afforded opportunity of inspection of those reports. After all the ultimate purpose and object in granting personal hearing was to ensure fair play and justice and to afford opportunity to the petitioners to effectively plead their case with regard to exemption. That object could not be achieved unless the various reports which were the fundatiori of the conclusions of Dr. Rajagopalan's report were made available to the petitioners. 24. The learned Advocate General urged that the report of expert need not be disclosed to the party concerned. That object could not be achieved unless the various reports which were the fundatiori of the conclusions of Dr. Rajagopalan's report were made available to the petitioners. 24. The learned Advocate General urged that the report of expert need not be disclosed to the party concerned. He placed reliance on two Division Bench decisions of this Court in Ram Yatra Shukla v. Chancellor, S. N. S. Vishwavidvalaya 1982 All LJ 826 and Paras Nath Dwivedi v. Chancellor S. N. S. Vishwavidyalaya 1982 All LJ 961. In these two decisions, this Court held that expert evidence should not be disclosed to the party even in quasi-judicial proceedings to challenge the correctness of the expert evidence. Having given our due consideration to the aforesaid two decisions of this Court, we find that the Bench proceeded on the assumption that the expert evidence did not contain any evidentiary material and as such it was not necessary to supply a copy of the same to the party concerned. That situation does not prevail in the instant case. Dr. Rajagopalan's report is basically founded on the material contained in the various reports and the State' Government considered those materials along with the report of Dr. Rajagopalan in recording a finding that the levy of electricity duty could not affect the margin of profit of Hindalco, it would further not affect the production of aluminium and the burden of duty was negligible on the finances of Hindalco. In such a situation the material contained in the various reports and Dr. Rajagopalan's report had evidentiary value, therefore, the principles of fair play and justice required that those reports were made available at least for inspection to the petitioners. 25. The petitioners' further grievance is that on a perusal of the impugned order they were surprised to find that after the personal hearing was over, the Government of Uttar Pradesh made a request to the Department of Mines, Government of India, to confirm from their records whether or not electricity duty was included in the price of Hindalco products fixed by the Central Government. It appears that the Government of India by a letter dated January 31, 1981, informed the State Government that the incidence of electricity duty had been included in the control price of aluminium with effect from July 15, 1975, except for a period from October 18, 1978, to October 4, 1979. It appears that the Government of India by a letter dated January 31, 1981, informed the State Government that the incidence of electricity duty had been included in the control price of aluminium with effect from July 15, 1975, except for a period from October 18, 1978, to October 4, 1979. The State Government placing reliance upon the letter of the Government of India held that since the incidence of electricity duty had been included in the control price of aluminium from July 15, 1975 the Hindalco was not justified in seeking exemption from duty. Admittedly, the petitioners had never been afforded any opportunity whatsoever to meet the information contained in the letter of the Government of India dated January 31, 1981. The petitioners asserted that the information contained in the letter of the Government of India was incorrect. 26. In this connection they rely on a statement made by the Department of Mines, Government of India, in an affidavit filed in answer to the appeal of Hindalco under the provisions of Clause 12 of the Aluminium Control Order, 1970, against the fixation of retention price of aluminium fixed by the Hindalco. The statement as quoted in paragraph 88 of the petition shows that the incidence of electricity duty was not taken into account in fixation of retention price of Hindalco. In addition to that the counsel for the petitioners has referred to the BICP report to show that the incidence of electricity duty was not included in the control price of aluminium in Hindalco. These facts fully demonstrate that if the petitioners had been given opportunity they would have placed material before the State Government to show that the information contained in the letter of the Government of India dated 31-1-1981 was incorrect. 27. An authority, be it administrative or quasi-judicial, if required to afford personal hearing to a party, is permitted to collect material or evidence against the party to whom it granted personal hearing after the hearing is over, it would be destructive of the concept of personal hearing and would be contrary to the principles of fair play and justice. The principles of fair play and justice require that the authority granting personal hearing should not collect or acquire material behind the back of the party after the personal hearing is concluded. The principles of fair play and justice require that the authority granting personal hearing should not collect or acquire material behind the back of the party after the personal hearing is concluded. If additional material evidence is collected by the authority, which may be prejudicial to the party concerned, it should in all fairness bring that material to the notice of the party or afford a fresh opportunity of personal hearing. Personal hearing is not an empty formality, its purpose is to afford effective opportunity to the party to meet the case against it in a fair and just manner. If the authority is permitted to collect material behind the back of the party after personal hearing is over, such a procedure would result into negation of fair play and justice. We are accordingly of the opinion that denial of inspection of the material contained in the reports as well as the non- disclosure of the evidence contained in the letter of the Government of India dated January 31, 1981, was inconsistent with the principles of natural justice and fair play and it also amounted to denial of personal hearing and for these reasons the impugned order is rendered illegal. 28. Learned counsel for the petitioners urged that Sri Yogendra Narain, under whose signatures the impugned order was communicated to the petitioners. had never heard the matter and as such the order is vitiated in law. The State Government had constituted a committee of its officers to consider the matter relating to the exemption and to grant hearing to the petitioners. The Chief Secretary, Sri T. P. Tewari, was the Chairman of the Committee. On 6th of September and 11th of November, 1980, the petitioners were afforded opportunity of hearing and they submitted their oral submissions before the Committee. Sri Yogendra Narain was not a member of the Committee nor he was present on any date of hearing. He never heard the matter and yet he passed the impugned order. To meet the petitioners' submission, an affidavit of Sri Yogendra Narain was filed during the course of hearing of the petition. In his affidavit Sri Yogendra Narain stated that he succeeded Sri V. C. Mittal as Power Secretary in July, 1981. The original draft of the impugned order was signed by Sri V. C. Mittal, the then Secretary, Energy Department,. To meet the petitioners' submission, an affidavit of Sri Yogendra Narain was filed during the course of hearing of the petition. In his affidavit Sri Yogendra Narain stated that he succeeded Sri V. C. Mittal as Power Secretary in July, 1981. The original draft of the impugned order was signed by Sri V. C. Mittal, the then Secretary, Energy Department,. When the order was actually issued, Sri Yogendra Narain was working as Energy Secretary and as such, he communicated the impugned order on behalf of the State Government to the petitioners. He further stated that the impugned order was neither passed by him nor the original draft thereof was ever signed by him. He merely communicated the original order passed by Sri V. C. Mittal, the then Energy Secretary. The relevant file of the State Government maintained in the Civil Secretariate, U. P. Government, was produced before us by the learned Advocate General in support of his submission that the order has, in fact, been passed by Sri V. C. Mittal, the then Power Secretary, and not by Sri Yogendra Narain. On perusal of the file we found the submission of the learned Advocate General correct. Though the impugned order was issued under the signature of Sri Yogendra Narain, but in fact the original order as available on the file purports to have been signed by Sri V.C. Mittal. 29. There is yet another startling feature. Sri V.C. Mittal did not put the date on which he may have signed the original order. It is clear from the file that Sri V. C. Mittal was not the Secretary of the Power Department after April, 1981. The file shows that Sri Mittal has appended his signature on the various nothings and orders in the file in Hindi but the initials which are available on the impugned order are in English. The file does not contain any other signature of Sri Mittal in English except on the impugned order. This raises a question as to whether Sri Mittal had ever signed the order and if so when he did so. The file further shows that the order which allegedly contained signature of Sri Mittal was referred to Law Department for vetting. The Addl. Legal Remembrancer made changes in the order on 2-2-1982 by deleting certain portion of the order and making additions. The file further shows that the order which allegedly contained signature of Sri Mittal was referred to Law Department for vetting. The Addl. Legal Remembrancer made changes in the order on 2-2-1982 by deleting certain portion of the order and making additions. There is nothing on the file to show that the modifications made by the Addl. Legal Remembrancer were ever placed before Sri Mittal or other members of the Committee which had granted hearing. In fact Sri Mittal had ceased to be Power Secretary prior to April, 1981, and he was succeeded by Sri J. M. Pant as Secretary and the file was never placed before him after 2-2-1981. 30. A perusal of the file disclosed the aforesaid facts which raised serious doubt regarding the signing of the order by Sri Mittal and also regarding the modifications made in the order. In order to get the matter clarified. we directed the State to explain and remove our doubts by filing affidavit of relevant officers. The opportunity so afforded was not availed and no affidavit was filed. In fact learned Advocate General stated before us on 29-8-1984, as noted in the order sheet that the officer who was deputed to file the affidavit refused to do so and no other officer was ready to take the responsibility of filing affidavit. We are constrained to say that when the Court directed the State to file affidavit explaining the doubts by placing correct facts before the court, it was incumbent on the State Government to file affidavit placing correct facts before the Court. The State unlike an ordinary litigant is duty bound to place correct facts before the Court to assist it in the administration of justice, irrespective of the result of the litigation. The State is not expected to withhold relevant facts or to shirk its duty on the consideration of success in the case. Since no affidavit was filed in spite of direction of the Court there is no escape from the irresistible conclusion that if the affidavit had been filed the same would have gone against the State. In the circumstances, it is legitimate to hold that perhaps Sri V. C. Mittal did not sign the order and even if he had signed the order, the same had been modified by the Addl. In the circumstances, it is legitimate to hold that perhaps Sri V. C. Mittal did not sign the order and even if he had signed the order, the same had been modified by the Addl. Legal Remembrancer and the corrected order had never been approved by Sri Mittal or by other members of the Committee who heard the matter. The order as issued by the Government on 16-2-1984 and communicated to the petitioners was not passed by those who heard the matter. 31. Learned Advocate General urged that the alterations including deletions and additions made by the Addl. Legal Remembrancer in the order on 2-2-1982 are not substantial in nature as those alterations did not affect the merit of the order which had already been considered in the original order as proposed by Sri V. C. Mittal. Since the modifications made by the Addl. Legal Remembrancer were not substantial in nature, even if the same were not approved by Sri Mittal or other members of the Committee, the order would not be bad in law. Shri Ray, on the other hand, urged that the portions deleted and the portions added by the Addl. Legal Remembrancer on 2-2-1982 were substantial which challenged the nature of the findings. In order to determine this controversy, it is necessary to reproduce the relevant portions which were deleted and the portions which, according to the counsel, are substantial in nature. We are reproducing the deleted portion and the added portion in the order, the deleted portion is underlined while the added portion is shown in brackets : "....The recommendations of Dr. Nagaraja Rao Committee and the objections of India Tariff Commission are not mandatory. In fact, the recommendation of the said committee and the observations of Indian Tariff Commission have hardly any relevance to the imposition of Electricity Duty. X X X X X (Here it may be stated that there is nothing on record to show that any assurances and commitments were given by the State Government as contended by the Corporation. It may, however) .......................... The issue raised by the Corporation in their representation dated September 6, 1975. and in their subsequent letter dated May 14, 1977 are prima facie not relevant to the issue of Electricity Duty". It may, however) .......................... The issue raised by the Corporation in their representation dated September 6, 1975. and in their subsequent letter dated May 14, 1977 are prima facie not relevant to the issue of Electricity Duty". The second portion against which objection has been raised is as under : "..........The version of M/s Hindalco that 60% of production of Aluminium goes to Electrical Industry and except for about 16% of the production which goes to Utensil manufacturing units all the remaining production goes to Defence, Ordnance etc. may be accepted although any ............... (Yet this version in respect of use of aluminium may be assumed to be correct).......... this by itself fails to make out a case for exemption from payment of Electricity Duty. It may be relevant to mention that the said duty these issues are hardly relevant to the imposition of Electricity Duty which will not affect the productivity of aluminium by M/s Hindalco and will impose a very negligible burden (on the industry) as made out above." 32. The above deletions and additions made by the Addl. Legal Remembrancer show that originally the order as alleged to have been signed by Sri Mittal contained a finding that the recommendations of the Nagaraja Rao Committee and the observations of the Tariff Committee were not mandatory and the recommendations of that Committee had no relevance to the grant of exemption from electricity duty. After the deletion of that portion additions were made to record findings that there was nothing on record to show that any assurance and commitments were given by the State Government as contended by Hindalco. In this connection it is pertinent to note that the petitioner had placed reliance on Dr. Nagaraja Rao Committee report and the report of the Indian Tariff Commission in support of Hindalco's contention that the State Government had given an assurance to supply electricity at cheap rate without charging any duty. This contention had been negatived in the original order on the finding that the recommendation of Dr. Nagarajarao Committee and the observations of Indian Tariff Commission were not relevant, while after the correction of the draft by the Addl. Legal Remembrancer the order stated that there is nothing on the record that any assurance or commitment was given by the State Government. 33. Nagarajarao Committee and the observations of Indian Tariff Commission were not relevant, while after the correction of the draft by the Addl. Legal Remembrancer the order stated that there is nothing on the record that any assurance or commitment was given by the State Government. 33. Before the Government, Hindalco had claimed exemption on the basis of user of aluminium and in that connection it had urged before the Government that 60% of the aluminium produced was supplied to the electrical industry except for about 16% of the production which was routed to utensil manufacturing unit. The entire remaining production was supplied to the defence and Ordnance and as such the exemption should be granted. The order as proposed by Sri Mittal before its correction by the Addl. Legal Remembrancer, rejected the submission of Hindalco on the finding that these issues were hardly relevant to the imposition of electricity duty. That portion of the order was deleted by the Addl. Legal Remembrancer and instead he made additions saying that the Hindalco's version in respect of the use of aluminium may be assumed to be correct, but that does not make out a case for exemption from payment of duty. 34. The analysis of the deletions and additions as discussed above would show that the relevant portions as deleted and added in the order made the order totally different. It is, therefore, difficult to accept the contention that the changes made by the Joint Legal Remembrancer in respect of these two matters are not substantial and that the changes made merely amounted to summary of the findings already recorded by Sri Mittal. The findings of the State Government in respect of these two matters have been recorded by a person who was neither a member of the committee which afforded opportunity of personal hearing to the petitioners, nor he was authorised to record findings in the matter. In our opinion, therefore, the impugned order which has.been communicated to the petitioners is different that what Sri V. C. Mittal is alleged to have signed. 35. The State Government has rejected the petitioners' request for exemption on the findings that Hindalco has been earning huge profits and the incidence of duty will not affect its profitability. In coming to that conclusion the State Government placed total reliance on the report of Dr. Rajagopalan. Sri Ray urged that Dr. 35. The State Government has rejected the petitioners' request for exemption on the findings that Hindalco has been earning huge profits and the incidence of duty will not affect its profitability. In coming to that conclusion the State Government placed total reliance on the report of Dr. Rajagopalan. Sri Ray urged that Dr. Rajagopalan determined the profits of Hindalco on the basis of subscribed capital only, he completely ignored the well accepted principles for determining the profitability of company either at 10% to 15% of 'capital employed' or on 12% of 'net worth' post tax. These principles have been followed by the Government of India on the basis of the various reports of expert authorities which include Working Group Report of November, 1970, and B. I. C. P. Reports for December, 1972, January, 1975, November 1976 and June, 1978. 'Capital Employed' is defined by the Tariff Commission Report which refers to the principles of determining the profitability at 12% of the `Capital Employed'. It further defined profitability as gross block excluding work in progress less depreciation plus working capital. The Tariff Commission determined the profitability either at 12% to 15% of the 'Capital Employed' defined as the average net fixed assets plus working capital equivalent cost of production for 8 or 6 months. The Working Group proceeded on that basis. The B. I. C. P. Report for December 1973 also referred to that principle with a slight modification that 15% return on net assets plus cost of production for 41/2 months would be the margin of profit. In the B. I. C. P. Reports of November 1976 and June 1978, the 'capital employed' method was not followed, instead the profitability was determined on 12% of 'net worth' post tax which was defined as share capital plus reserves. Relevant extracts of these reports were produced before the Government by the petitioners. Shri Ray further urged that 'Capital Employed' and' net worth' are the two methods for determining the profitability but Dr. Rajagopalan determined the profitability on his own concept of 'net worth'. In doing that he took into consideration only the share capital and not the reserves. 36. The petitioners had raised these objections to the report of Dr. Rajagopalan in their comment filed before the Government, but the State Government rejected the same on the ground that Hindalco had not quoted any authority to support its contention. In doing that he took into consideration only the share capital and not the reserves. 36. The petitioners had raised these objections to the report of Dr. Rajagopalan in their comment filed before the Government, but the State Government rejected the same on the ground that Hindalco had not quoted any authority to support its contention. This finding is wholly wrong and misconceived. The petitioners had placed before the Government relevant reports of Tariff Commission for 1951, 1958, 1964, 1968 and 1971. This is evident from the perusal of Annexure V to the petition and Annexure XXXVIII to the petitioners' comment filed before the Government on the report of Dr. Rajagopalan. Our attention was drawn to Annexure C-2 appended to Dr. Rajagopalan's Report which is an extract from Working Group, November, 1970. In that report itself 12% of the `Capital Employed' was considered as the basis for determining profitability Similarly, Appendix C-15 to Dr. Raja Gopalan's report is an extract of B. I. C. P. Report of November, 1976 in which 12% of 'net worth' post tax was considered as the basis for determining profitability. The B. I. C. P. report and the recommendation of the Working Group Report were the relevant authorities which were present before the Government. In view of these documents it is apparent that the State Government committed error on the face of record in rejecting the petitioners' contention on the ground that the Hindalco had quoted no authority to support its contention on the question of margin of profitability. There was a failure on the part of the Government to consider the relevant material on record and consequently there was non-application of mind also. 37. The learned counsel then urged that in the impugned order the State Government has placed reliance on the conclusions drawn by Dr. Rajagopalan that the rate of profitability of the Hindalco was very high since 1970 till the end of 1977. In coming to that conclusion Dr. Rajagopalan was primarily influenced by the reason of high price of Hindalco's shares in the market. Rajagopalan that the rate of profitability of the Hindalco was very high since 1970 till the end of 1977. In coming to that conclusion Dr. Rajagopalan was primarily influenced by the reason of high price of Hindalco's shares in the market. In this regard it is relevant to note that even if a company suffers loss, the shareholders may earn profits on their shares, when dividends are paid out of reserves in spite of the losses, or if the shareholders transfer their shares in open market for some extraneous reasons, such as market fluctuations or a take over bid. On the other hand, if there is a profit earned by the Company, the share holders may not be the gainers at all as the company may decide not to declare any dividend having regard to the requirements of the company. The earlier Division Bench had directed the State Government to consider the marginal profitability of Hindalco and not of the shareholders. A company may earn profits and yet the company may not declare dividend. Similarly, the company may suffer losses yet it may declare dividends from its reserves. The mere fact that prices of shares initially purchased by the shareholders have gone up in the market or that the shareholders have earned profits on the initial capital employed by them is not the true and correct criteria to determine the profitability of a company. Instead, the principles' laid down in the various reports, referred earlier, prescribe well accepted methods for determining the margin of profit on the basis of `capital employed' or' net worth' post tax. Dr. Rajagopalan failed to apply those methods, he further failed to notice that the company had suffered losses to the tune of Rs. 104 lacs Rs. 626 lacs and 42 lacs in the years 1973, 1974 and 1975 respectively. For this reason also the Government's conclusion which is founded on the report of Dr. Rajagopalan is vitiated, inasmuch as the relevant material was not taken into consideration. Again, Dr. Rajagopalan took the whole of reserves for distribution of profits to shareholders without considering that the development reserve was not free reserve and was not available for distribution to shareholders. This was a patent error in the impugned order the State Government has refused to grant exemption on the finding that the electricity duty has all along been included in the controlled price of aluminium. This was a patent error in the impugned order the State Government has refused to grant exemption on the finding that the electricity duty has all along been included in the controlled price of aluminium. The Government has held that since the incidence of electricity duty was included in the price fixed by the Central Government of the aluminium produced by Hindalco, there was no justification for granting exemption. In coming to that finding the Government placed reliance on the report of Dr. Rajagopalan as well as on the letter of the Government of India dated 31-1-1981. Learned counsel for the petitioners urged that the finding recorded in the report of Dr. Rajagopalan as well as in the impugned order that electricity has all along been included in the price of aluminium produced by Hindalco is erroneous and contrary to the material contained in the report of authoritative bodies and pricing committees appointed by the Government of India. 38. Before we consider this question in detail it is necessary to note that the learned Advocate General conceded that electricity duty had not been included in the cost of aluminium produced by Hindalco for the period from 18th October, 1978 to 4th October, 1979. This concession had to be made in view of the admission contained in the Government of India's letter dated January 31, 1981. In this view, the impugned order which proceeds on the assumption that incidence of electricity duty has all along been included in the sale price of aluminium of Hindalco is vitiated. The State Government did not consider the question for the exemption of electricity duty even for the period during which electricity duty was admittedly not included in the price of aluminium produced by Hindalco. 39. The learned Advocate General urged that the Central Government fixed the price of aluminium on the basis of B. I. C. P. Reports and the price so fixed included the incidence of electricity duty all along. He referred to the nine different pricing periods to support his contention. The petitioners' counsel, on the other hand, urged that the incidence of electricity duty had never been included in the price fixed by the Central Government as the B. I. C. P. Reports made recommendation to the Central Government to persuade the State Government to withdraw the electricity duty as its burden would affect the production of aluminium. 40. The petitioners' counsel, on the other hand, urged that the incidence of electricity duty had never been included in the price fixed by the Central Government as the B. I. C. P. Reports made recommendation to the Central Government to persuade the State Government to withdraw the electricity duty as its burden would affect the production of aluminium. 40. Having considered the matter at length we do not find any express provision contained either in the B. I. C. P. Reports or in the report of Working Group showing that the incidence of electricity duty was included in the price fixed by the Central Government. We would now refer to the pricing periods and to the material which was placed before us by the counsel for the parties. 41. The first pricing period is from 20th March, 1970, to 23rd May, 1971. Electricity duty become payable with effect from 1st September, 1970. During the first pricing period the price was fixed on Hindalco's own price on 28th February, 1970. There could be no occasion of specific inclusion or provision for payment of electricity duty which was imposed on 1st September, 1970. 42. The second pricing period is from 24th May, 1971, to 22nd May, 1974. The price was fixed at Rs. 3970/- per ton on the basis of the Working Group Report submitted in November, 1970. The cost of power adopted in calculation of price was 5.40 paise per unit vide para 4.12 of Rajagopalan's report. The actual cost of power for 1972 and 1973 computed in B. I. C. P. Report submitted in December, 1973, was 6.495 paise per unit for 1972 and 6.767 paise per unit for 1973. The extract appears in Annexure C-7 of Dr. Rajagopalan's report, page 86. 43. The petitioners relied on the following extracts from para 5.3.5,(B) (v), page 32 of the Working Group Report (a copy of which was produced before us) : "It has been brought to the notice of Working Group that the Government of Uttar Pradesh have recently further increased the electricity rate by I paise per unit. Rajagopalan's report, page 86. 43. The petitioners relied on the following extracts from para 5.3.5,(B) (v), page 32 of the Working Group Report (a copy of which was produced before us) : "It has been brought to the notice of Working Group that the Government of Uttar Pradesh have recently further increased the electricity rate by I paise per unit. This increase too has not been taken into account in the estimation of cost." On behalf of the respondents, reliance was placed on the next sentence in the same continuation which runs as under : "The question has been discussed in further detail in Chapter VIII." There is no reference to 1 Paisa electricity duty in para 8.6.1 of Chapter VIII page 85 of the report. In para 8.8 of the Report, page 95, it was observed : - "It is, therefore, suggested that the Government should advise the State Government or Electricity Boards to refrain from increasing the net power liability of the companies from the committed levels at present." In para 12.1(ix), page 115, it was recommended that aluminium industry being power intensive should have reasonable protection from increasing power rates. In para 12.2.(v), page 117, it was recommended that Government should advise the State Governments and Electricity Boards to refrain from increasing the effective power rate charged to the companies from the contracted levels either by way of increase in rates or surcharge or other levies. 44. The third pricing period was from 23rd May, 1974 to 10th March, 1975. The price of Rs. 5060 per ton was notified on the basis of B. I. C. P. Report of December, 1973. The cost of power adopted in cost computation was 6.495 paise per unit vide para 4.12 page 32 of Dr. Rajagopalan's report. The cost of power' for the first nine months of 1974 was estimated at 9.362 paise per unit, vide Annexure C-11 page 90 of Dr. Rajagopalan's report, and statement II of B. I. C. P. Report of January, 1975. In the B. I. C. P. report of December, 1973, there was a recommendation for increasing the price by Rs. 300/- per ton. In para 4.5 page 27, Dr. Rajagopalan's report it was stated that before the Government court decide on the revision of prices there was a steep rise in the value of inputs notable C. P. Coke. In the B. I. C. P. report of December, 1973, there was a recommendation for increasing the price by Rs. 300/- per ton. In para 4.5 page 27, Dr. Rajagopalan's report it was stated that before the Government court decide on the revision of prices there was a steep rise in the value of inputs notable C. P. Coke. The matter was, therefore, again referred to the B. I. C. P. on whose recommendation the Government announced the increase in price by Rs. 1090/- per ton. 45. The learned Advocate General submitted that in the B. I. C. P. report of December, 1973, the power rate taken for cost computation included 7.5 Paise per unit for electricity supplied by Renusagar and he referred to Appendix C-7 page 86 of Dr. Rajagopalan's report. He further referred to the Annexure XX to the representation made by the petitioners in which the petitioners are alleged to have admitted that the rate of energy received from Renusagar per unit with duty was 7.5 Paise for 1972. Annexure C-7 page 86 of Dr. Rajagopalan's report shows that this rate was taken into consideration for calculating the average rate of power and the same was determined as 6.767 Paise. It was, however, observed : "Since the rate for the second agreement has been very adversely affected on account of the fixed charge of 39 lakhs we have taken into account the experience of 1972 and on this basis the rate works out to Rs. 6.495 Paise per unit." The learned counsel for the petitioners submitted that B. I. C. P. report of December 1973 did not determine the cost on the basis that power rate was 6.767 Paise per unit but on the basis that it was 6.495 Paise per unit. The actual cost of power worked out by the B. I. C. P. report of January 1975 for the first nine months of 1974 was 9.862 Paise per unit. (See Annexure C-I1 page 90 of Dr. Rajagopalan's report) In the B. I. C. P. report of November, 1976, the cost worked out for the first part of 1975 was 11.90 paise per unit (See Annexure C-12 page 91 of Dr. Rajagopalan's report). (See Annexure C-I1 page 90 of Dr. Rajagopalan's report) In the B. I. C. P. report of November, 1976, the cost worked out for the first part of 1975 was 11.90 paise per unit (See Annexure C-12 page 91 of Dr. Rajagopalan's report). Therefore, actually the power cost was much more and the rate of power adopted for cost computation of aluminium in the B. I. C. P. report of December, 1973 could not be said to have included the electricity duty of 1 paise per unit. Annexure A-4/4 page 63 of Dr. Rajagopalan's, report shows that the Corporation suffered loss of Rs. 626/- lakh in- 1974 and Rs. 43 lakhs in 1975. It could not, therefore, be said that the cost computed actually included the electricity duty. 46. The fourth pricing period is from 11th March 1975 to 14th July, 1975. The B. I. C. P. report of January, 1975, recommended an increase of Rs. 650/- per ton and the price for this period was fixed at Rs. 5,464/-. An increase of Rs. 404/- per ton was allowed. 47. The learned Advocate General submitted that according to appendix of the representation filed by the petitioners before the Government the power rate per unit with duty was shown as 9.6 paise per unit. In the cost computation the cost of power was increased from 6.495 Paise to 9.90 Paise per unit and this must be deemed to have included electricity duty. Para 4.12 page 32 of Dr. Rajagopalan's report was relied for this purpose. 48. The learned counsel for the petitioners submitted that the B. I. C. P. report of November 1975 shows that the actual power cost for the first half of 1975 was 11.90 paise per unit. Reference was made to Annexure C11, page 91, of Dr. Rajagopalan's report. It was urged that the power cost taken into account in the cost computation was much .less as compared to the actual power cost and it could not include electricity duty. The B. I. C. P. report of 1975 recommended an increase of Rs. 650/- per ton but only an increase of Rs. 404/- per ton was allowed by the Central Government. The B. I. C. P. report of 1975 recommended an increase of Rs. 650/- per ton but only an increase of Rs. 404/- per ton was allowed by the Central Government. Since the Government did not accept the price recommended by the B. I. C. P. report, the Hindalco could not be said to have received the benefit of cost computation at the rate of 9.90 paise per unit during the fourth pricing period. 49. The fifth pricing period was from 15th July, 1975, to 30th November, 1975. During this period there was dual pricing scheme under which the price was fixed for 50% of the levy aluminium and there was no controlled price for the remaining 50% of the aluminium produced by Hindalco. The price of levy aluminium was fixed at Rs. 6316/- per ton. This was done on the basis of B. I. C. P. report of May, 1975. The B. I. C. P. report of May, 1975 was not produced or shown. In para 4.12, page 32 of Dr. Rajagopalan's report was referred to support the contention that the price computation was made on the basis that the power rate was 11 paise per unit. A reference was made to the B. I. C. P. report of November, 1976, in which the power cost for the second half of 1975 was found to be 12.79 Paise per unit. Annexure C-12, page 91, of Dr. Rajagopalan's report was referred. It was therefore urged that while the actual power cost was 12.79 Paise per unit, the price computation was made on the basis that the power cost was 11 Paise per unit. The cost so computed could not include electricity duty. 50. The sixth pricing period is from 1st December, 1977, to 15th March, 1978. For this period the price was fixed at Rs. 6280/- per ton for levy aluminium. Placing reliance upon paragraph 3.4.2. page 26 of the B. I. C. P. report of November, 1976, the learned Advocate General urged that 1 paise electricity duty claimed by the U. P. State was included in the incidence of cost of production. For this period the price was fixed at Rs. 6280/- per ton for levy aluminium. Placing reliance upon paragraph 3.4.2. page 26 of the B. I. C. P. report of November, 1976, the learned Advocate General urged that 1 paise electricity duty claimed by the U. P. State was included in the incidence of cost of production. The relevant paragraph is as under : "Included in the above rates is the impact of 1 Paise duty claimed by the U. P. State on the Companies' generation of power at Renusagar." Para 4.8.4 page 46 of the B. I. C. P. report which refers to Annexure VII contains an observation, that in case of Hindalco it also included the impact of the disputed excise (electricity) duty of 1 paisa on power generated at captive Renukoot plant. 51. The learned counsel for the petitioners submitted that in para 3.4.2 page 26 of the report, it is nowhere stated that 1 Paisa duty has been included in the cost computation. All that was said was "included in the above rates is the impact of 1 Paise duty claimed by the U. P. State." In para 4.5(v)(a), page 37, of the report, it was observed : "The overall average rate thus words out to 12.05 paise per unit as against the rate of 11 Paise per unit adopted for this company by the Bureau earlier." In the concluding portion of the paragraph it was said : "In our cost computation, therefore, we have taken into account the average rate of 12.05 paise per unit." The B. I. C. P. made recommendation to the Central Government to fix price on the basis of cost of power at the average rate of 12.05 Paise per unit between Rs. 6313 to Rs. 6259 per ton. But the Central Government fixed the price at Rs. 6280/- per ton only. The Central Government did not accept the report of the B. I. C. P. for fixing the price at Rs. 6313/-/ In view of these facts it cannot be positively held that the incidence of electricity duty was included in the price. 52. The seventh pricing period is from 16th March, 1978, to 17th October, 1978. 6280/- per ton only. The Central Government did not accept the report of the B. I. C. P. for fixing the price at Rs. 6313/-/ In view of these facts it cannot be positively held that the incidence of electricity duty was included in the price. 52. The seventh pricing period is from 16th March, 1978, to 17th October, 1978. The petitioners have placed reliance on the extract of the B. I. C. P. report of March, 1978, as contained in their letter dated November 10, 1980, addressed to the State Government (Annexure XXXVII to the petition). In paragraph 88 of the petition the petitioners have asserted that in the B. 1. C. P. report it was made clear that the cost of electricity duty had not been taken into account while fixing the price. The relevant portion of the report is quoted as under : "A duty of 1 Paise per unit is being claimed by the State on Renusagar power. The company, however, disputed this and resisted its payment so far but on accounting liability has been credited to meet the payment if and when it becomes payable. Since this element is disputed by the company itself and not included in the cost earlier, it was not considered when regulating the retention prices so far. 53. The averments contained in paragraph 88 of the petition have not been denied in the counter-affidavit filed on behalf of the State and the veracity of the extract relied upon by the petitioners has not been challenged. In fact the learned Advocate General conceded that since the B. I. C. P. report of March, 1978, was not available with the Government they could not challenge the correctness of the petitioners' assertion. On the material on record it is evident that electricity duty was not included in the cost of aluminium, computed on the basis of the B. I. C. P. report of 1978, in determining the price. 54. The eighth pricing period relates to 18th October, 1978, to 4th October, 1979. There is no dispute between the parties that the electricity duty was not included in the cost computation of aluminium produced by Hindalco for this period. The ninth pricing period relates to the period October 4, to December 3, 1981. 54. The eighth pricing period relates to 18th October, 1978, to 4th October, 1979. There is no dispute between the parties that the electricity duty was not included in the cost computation of aluminium produced by Hindalco for this period. The ninth pricing period relates to the period October 4, to December 3, 1981. No material has been placed before the Court by the respondents to show that the electricity duty was included in the computation of cost of aluminium for this period. 55. The State Government has in the impugned order proceeded on the assumption that the incidence of electricity duty was throughout included in the price of aluminium. This finding is patently erroneous as discussed above. Faced with this situation, the learned Advocate General urged that a margin of 5% has all along been allowed by the Pricing Committee for meeting the extra cost which included power cost, consequently the electricity duty should be deemed to have been included in the price fixed for Hindalco's aluminium. He urged that under the dual pricing scheme there was no control over the 50% non-levy aluminium produced by Hindalco, and as such Hindalco could make up its losses including the incidence of electricity duty by selling the non-levy aluminium in open market at higher rates. Having given our anxious consideration to the submission of the learned Advocate General, we do not find any merit in the same. While it is true that in the B. I. C. P. reports 5% cushion was recommended, but that was not done to meet the incidence of electricity duty, instead it referred to other matters. The reason for providing this 5% cushion margin is specified in paragraph 5.3.6(ii) of B. I. C. P. report, which refers to pot failure, breakage, sudden increase in cost etc. and also to dispute relating to power. The dispute relating to power did not relate to electricity duty, instead it related to dispute going on between Hindalco and the State Government with regard to supply of power to Hindalco at cheaper rates. So far as the free sale of 50% of non-levy of aluminium is concerned, there was considerable consumers resistance and no purchasers were available in the open market to purchase aluminium on higher rate as a result of which unsold stock of aluminium remained in storage. The dual pricing scheme does not appear to have succeeded. So far as the free sale of 50% of non-levy of aluminium is concerned, there was considerable consumers resistance and no purchasers were available in the open market to purchase aluminium on higher rate as a result of which unsold stock of aluminium remained in storage. The dual pricing scheme does not appear to have succeeded. This is clear from paragraph 5.14 of the B. I. C. P. report of November, 1976, which refers to the consumers resistance and piling of unsold stock of aluminium. 56. The State Government placing reliance on the Government of India's letter dated 31st January, 1981, proceeded on the assumption that the electricity duty had all along been included in the cost of aluminium produced by Hindalco. The letter is in the following terms. : "Although the price of aluminium was brought under control in 1970, the system of retention prices for individual producers was introduced with effect from July 15, 1975. The retention price for Hindalco effective from that date reflected the incidence of electricity duty to the extent of 1 Paise per unit on power generated at Renusagar. In the retention price from the company effective from October 18, 1978, the cost of power for Renusagar as reflected in the retention price did not include electricity duty. However, in the subsequent revision of retention price on October 4, 1979, allowance was again made for the electricity duty of 1 Paisa per unit on the power generated on Renusagar. The retention price for the company has not been revised since then." The information contained in this letter was contained by the State Government after the conclusion of the hearing and its contents were never made known to the petitioners. The information contained in the letter is quite inconsistent and contrary to the report of B. I. C. P. of March, 1978, as extracted in Annexure XXXVII to the petition. The extract shows that the electricity duty had never been included in cost computation earlier and it was never considered in fixing the retention price. 57. The information contained in the letter is quite inconsistent and contrary to the report of B. I. C. P. of March, 1978, as extracted in Annexure XXXVII to the petition. The extract shows that the electricity duty had never been included in cost computation earlier and it was never considered in fixing the retention price. 57. The petitioners further placed reliance on the information contained in the letter dated December 12, 1978, from the Deputy Secretary to Government of India, Department of Mines, New Delhi, which also shows that the contingent liability of 1 paisa of electricity duty was not taken into account in fixing the price on the ground that the petitioners' case was that duty on self generation was neither chargeable nor payable. In view of these facts, the correctness of the information contained in the Government of India's letter dated 31 1-1981 stands demolished. Even if the Government wanted to place reliance on the letter it should have afforded opportunity to the petitioners, and it should have considered the extract from the B. I. C. P. report of March, 1978, placed before it by the petitioners vide their application. Annexure XXXVII to the petition. Had the material been taken into considerations the State Government could have come to a different conclusion. In view of the above discussion, we are of the opinion that the finding recorded by the State Government in the impugned order that the incidence of electricity duty was included in the price fixed is vitiated and is patently erroneous. 58. Before we proceed to consider other submissions made on behalf of the petitioners, we think it necessary to refer to the written note filed on behalf of the State as Annexure to the affidavit of Vijay Kumar Mathur. The hearing of the writ petition commenced on 16th May, 1984, Sri S. S. Ray, Counsel for the petitioners, continued his arguments on 17th May, 18th May, 21st May and 22nd May 1984. The learned Advocate General commenced his arguments in reply on 22nd May, 1984. He also continued his arguments on 23rd, and 24th and 25th May. Since the summer vacation intervened the hearing was adjourned. The learned Advocate General commenced his arguments in reply on 22nd May, 1984. He also continued his arguments on 23rd, and 24th and 25th May. Since the summer vacation intervened the hearing was adjourned. On 25-5-1984, which was the last working day of the Court before the summer vacations an application was filed on behalf of the State Government stating therein that there are certain materials by way of documents which had been placed by the petitioners before the Pricing Committees and which were very necessary for the decision of the writ petition. In the absence of these documents there was every possibility of the case of the State being prejudiced. The application further stated that in the interest of justice it was necessary that the State be allowed reasonable time to file those documents. We allowed the application by our order dated 25-5-1984 and granted time to the State Government till 10th July, 1984, to file affidavit and the documents. On July 25, 1984, a supplementary counter-affidavit was filed by Vijay Kumar Mathur, Assistant Electrical Inspector to the Government of U. P. District Rae Bareli, annexing thereto a written note running into 80 pages. The affidavit of Vijay Kumar Mathur does not state any facts, nor it refers to any documents. The affidavit of Vijay Kumar Mathur was filed in pursuance of our permission granted to the State on 25-5-1984. On behalf of the petitioners a supplementary rejoinder affidavit was filed raising objection to the admissibility of the written note filed along with the affidavit of Vijai Kumar Mathur. On 8th August, 1984, counsel for the petitioners made oral submissions against the admissibility of the aforesaid written note on the ground that the petitioners arguments had been closed and as the learned Advocate General had already made submissions the State was not entitled to file the note at the belated stage. Learned counsel further pointed out that the Court had never granted permission to the State to file a written note, instead it had granted permission to the State to file the materials placed by the petitioners before the Pricing Committees as asserted in the State's application dated 25-5-1984. By our order dated 8-8-1984 we observed that the admissibility of the written note would be considered later on. 59. By our order dated 8-8-1984 we observed that the admissibility of the written note would be considered later on. 59. The written note filed as annexure to the affidavit of Vijay Kumar Mathur is not the document which was sought to be filed by the State for which we had granted permission to it on 25th May, 1984, The written note is in the nature of a fresh order on the question of petitioners' request for grant of exemption from duty. On our enquiry the learned Advocate General frankly conceded before us that the written note had been prepared not by the State Government or by any counsel appearing for the State, instead the same had been prepared by Dr. Rajagopalan. During the hearing of the writ petition in August, 1984, Dr. Rajagopalan was present on several dates before us in the court to assist the Advocate General like a pairokar. The written note contains a number of assertions of facts and opinions, it contains reference to various text book, documents and reports. No affidavit has been filed by any person on behalf of the Government taking responsibility on oath for the correctness and genuineness of the assertions of facts, reports, text books and other documents referred to in the report. Many facts and circumstances, reasoning, datas and references which are contained in the written note do not find place in the impugned order of the Government. We had never granted permission to the State to file written note, instead we had granted permission for filing documents which were alleged to have been placed by the petitioners before the Pricing Committee. Since the note was filed at the belated stage without permission of the Court we have not placed any reliance on the same as in our opinion the written note is not admissible in evidence for the aforesaid reasons. 60. The learned Advocate General then urged that the written note prepared by Dr. Rajagopalan and filed as Annexure to the affidavit of Vijay Kumar Mathur may be treated as additional reasons in support of the impugned order. He further urged that if any deficiency is found in the impugned order of the State Government dated February 16, 1982, the same cannot be quashed in view of the additional reasons contained in the note which is sufficient to sustain the order. We find ourselves unable to accept this submission. He further urged that if any deficiency is found in the impugned order of the State Government dated February 16, 1982, the same cannot be quashed in view of the additional reasons contained in the note which is sufficient to sustain the order. We find ourselves unable to accept this submission. The validity of the impugned order of the State Government dated February 16, 1982. is to be considered on the basis of the reasons contained therein. Additional reasons, even if contained in the written note cannot be taken into consideration to sustain the impugned order. It is well settled that public order must be judged by the reasons mentioned in the order and the same cannot be explained or supplemented by fresh reasons in the shape of affidavit or otherwise. In Commr. of Police v. Gordhandass Bhanji, AIR 1952 SC 16 this principle was laid down by the Supreme Court which has been reiterated in Mohinder Singh Gill v. Chief Election Commr. AIR 1978 SC 851 . We therefore hold that the written note filed on behalf of the State has no evidentiary value and the same cannot be taken into consideration to supplement the reasons contained in the impugned order. 61. Shri Ray, learned counsel for the petitioners, challenged the validity of the demand notice on two grounds. Firstly, he urged that even assuming that electricity duty was payable by the petitioners, the respondents are entitled to realise duty at the rate of 1 paisa with effect from 1-9-1970 on the power supplied by the first and second units of Renusagar, but the impugned demand notice include demand from the petitioners at the rate of 2 paise per unit which is not permissible. Secondly, the third unit of Renusagar was commissioned on 2-11-1981 and the power generated by that unit and supplied to Hindalco is exempt from electricity duty in pursuance of the Government notification dated March 17, 1973. The learned Advocate General, on the other hand, urged that the levy of electricity duty at the rate of 2 paise was justified on the power generated by the first and second units of Renusagar with effect from 1-9-1970 as the power generated by Renusagar was not being consumed by it, instead the same was being supplied to a consumer, namely, Hindalco. Since Hindalco is a consumer and Renusagar is a licensee the electricity duty at the rate of 1 paisa is not applicable to the petitioners. In order to consider the submission made on behalf of the parties it is necessary to briefly refer to the relevant provisions of the Act and the notifications issued thereunder. 62. Initially, section 9 of the Act provided total exemption from payment of electricity duty in respect of energy generated by a person for his own use and consumption. S. 9 was deleted and S. 3(4) was introduced by the U. P. Ordinance No. XIV of 1970, imposing electricity duty at the rate of 1 paisa per unit with effect from 1-9-1970 on the energy generated by a person for his own use and consumption. The generation of power in the State became very acute, the State Electricity Board and and the State Government could not meet the situation. The State Government with a view to grant impetus to self generation of power issued a notification on 17th March, 1973, granting total exemption on the energy produced by own source after January 1, 1973. On December 30, 1975, the State Government issued a notification in exercise of its power under S. 3 of the Act prescribing rate of electricity duty on consumption of electrical energy with effect from January 1, 1976. This notification laid down that electricity duty of 1 paisa per unit shall be levied on the energy produced from its own source consumed by a person other than a licensee or appointed authority. This notification was amended by another notification dated 28th January, 1980, but for our purposes that notification is not relevant as the rate of electricity duty on the energy consumed from own sources on generation by a person was not altered. The notification dated December 30, 1975, after its amendment by the notification dated January 28, 1980, permitted levy of electricity duty at the rate of 2 paise per unit on the energy supplied by a licensee to a consumer for industrial purposes. These notifications thus make it clear that no electricity duty was payable on the consumption of energy produced by a person from his own source of generation from a unit installed after January 2, 1973. These notifications thus make it clear that no electricity duty was payable on the consumption of energy produced by a person from his own source of generation from a unit installed after January 2, 1973. It is further clear that the rate of electricity on the energy consumed from his own source of generation by a person is 1 paisa per unit and not 2 paise per unit. The rate of 2 paise per unit on the electricity supplied by a licensee to an industry consumer is chargeable with effect from 28-1-1980. 63. The demand notice dated 3-3-1982 includes demand for electricity duty on the energy supplied Renusagar to Hindalco from Units Nos. 1 and 2 at the rate of 2 paise per unit for the period 28-1-1980 to December, 1981. The State's contention is that the power generated by Renusagar and supplied to Hindalco is not the `own source of generation' of Hindalco. Renusagar Power Company is subsidiary company of Hindalco. There is no dispute that the entire power generated by Renusagar is consumed by Hindalco and it is not supplied to any other party. Renusagar is not a licensee, instead the power generation was permitted by the Government under S. 28 of the Indian Electricity Act. A person who is granted sanction to generate energy for his own consumption is not a licensee within the meaning of the Indian Electricity Act. The State Government itself did not raise any demand for payment of electricity duty from the petitioners prior to 1-9-1970 because power generated at Renusagar and consumed by Hindalco was exempt from duty under S. 9 of the Act on the footing that Renusagar was Hindalco's own generation. 64. There is ample evidence on record to show that the State Government had all along been treating Renusagar to be a captive power unit of Hindalco. In paragraph 18 of the counter-affidavit of Mukhram Dutt filed on behalf of the State Government it is clearly admitted that Renusagar Power Company is a captive power unit of Hindalco for its sole benefit. Paragraph 3.10 of Dr. Rajagopalan's Report which has been relied upon by the State Government itself proceeded on the assumption that Renusagar Power Supply Company was captive power unit for the sole benefit of Hindalco. Paragraph 3.10 of Dr. Rajagopalan's Report which has been relied upon by the State Government itself proceeded on the assumption that Renusagar Power Supply Company was captive power unit for the sole benefit of Hindalco. In a letter dated June 26, 1978, addressed to the Chief Executive of Hindalco by the U. P. State Electricity Board, Annexure `B' to the supplementary affidavit of Suresh Chandra, filed on behalf of Hindalco it is clearly stated that the energy generated by M/s Renusagar Power Company has been treated to be from own source of generation of M/s Hindustan Aluminium Corporation. Moreover, the State Government in the affidavit filed by Sri. T. N. Dhar. the then Special Secretary to the Government of Uttar Pradesh, in Writ Petition No. 4521 of 1972, admitted that Renusagar was the own source of generation of energy to Hindalco. The relevant paragraph of the affidavit of Sri T. N. Dhar has been quoted in paragraph 3 of the affidavit of Suresh Chandra filed on behalf of Hindalco on 22nd May. 1984. The State Government in exercise of its power under the U. P. State of Electricity (Regulation of Supply. Distribution, Consumption and Use) Order, 1977, imposed a ban on the supply of electrical energy to Hindalco. Writ Petition No. 3732 of 1977 was filed by Hindalco challenging the vires of the order. The writ petition was partly allowed by this Court. On appeal the Supreme Court set aside the order of this Court and upheld the validity of the order. The decision of the Supreme Court is reported in State of U. P. v. Hindustan Aluminium Corpn. AIR 1979 SC 1459 . A perusal of the Supreme Court judgment would itself show that the State Government justified the stoppage of supply of energy on the basis that it was obtaining more than 50 per cent of its energy from Renusagar which was its own source of generation. In view of the aforesaid facts and circumstances it is not permissible to the State to change its stand to charge electricity duty at the rate of 2 paise per unit on the energy generated by Units Nos. 1 and 2 of Renusagar and supplied to Hindalco on the premise that Renusagar generation is not the own source of generation of Hindalco. 65. 1 and 2 of Renusagar and supplied to Hindalco on the premise that Renusagar generation is not the own source of generation of Hindalco. 65. There is no dispute that duty on the energy generated by a unit installed after 2-1-1973 is not chargeable. This question now stands finally determined by the Supreme Court in M/s. Swaroop Vegetables v. State of U. P., AIR 1984 SC 20 : (1983 All LJ 1135). There is further no dispute that the third unit of Renusagar was installed on 2-11-1981 and as such no electricity duty is chargeable on the energy consumed by Hindalco generated and supplied to it from the third, unit of Renusagar. The impugned demand notice requiring the petitioners to pay electricity duty in respect of energy supplied to Hindalco from Unit No. 3 from 22-8-1980 to December, 1981 is rendered illegal. The submissions raised on behalf of the petitioners challenging the validity of the demand notice cannot therefore be upheld. Since the illegal demand contained in the impugned notice is not severable by this Court the entire notice as it stands is liable to be quashed. 66. In addition to his submissions made in respect of the merits of the impugned order the learned Advocate General raised technical legal objections in support of his contention that the petitioners are not entitled to any relief from this Court. In this connection, his first submission was that the question of grant of exemption under S. 314) of the Act is a privilege and concession which cannot be claimed as legal right by the petitioners. If that concession has not been granted the petitioners cannot approach this Court for the issue of a writ as none of their rights have been violated. We find of no substance in the contention. S. 3(4) of the Act confers power on the State Government to allow exemption from payment of electricity duty in public interest having regard to the factors specified therein. Whenever, a person makes an application for exemption, the State is under a legal obligation to consider the same having regard to the factors specified in S. 3(4) of the Act. Nobody can claim exemption as of right, but merely because the exemption from duty cannot be claimed as of right, does not absolve the State from its duty to consider the application in a reasonable and just manner. Nobody can claim exemption as of right, but merely because the exemption from duty cannot be claimed as of right, does not absolve the State from its duty to consider the application in a reasonable and just manner. Our Constitution postulates the rule of law which envisages judicial review of e~ en administrative actions. If a statutory authority or the State Government while performing its statutory duty fails to consider or dispose of an application in accordance with the statutory provisions, the High Court has jurisdiction to quash the order under Article 226 of the Constitution It is the right of a party who makes an application before the State Government to get an order in accordance with law. The State cannot refuse exemption in an arbitrary manner and when the order is challenged it is not open for the State to contend that since the petitioners have no legal right to get exemption, the writ petition should be dismissed without considering any other matter. 67. In P. J. Irani v. State of Madras, AIR 1961 SC 1731 , the order of the Government granting exemption under S. 13 of the Madras Buildings (Lease and Rent: Control) Act, 1949, was under consideration. The Supreme Court repelled a similar argument and observed that if the order of exemption was passed for, reasons which do not fall within the purpose for which the power was conferred by S. 13, the order itself would he one discriminatory and violative of the petitioners' fundamental right to equal protection. In such an event Article 226 would certainly be available to set aside such an order. Besides even if the order does not violate Article 14, still the High Court has jurisdiction to interfere with the order if the order is found to be beyond the power conferred on the Government by S. 13 of the Act. 68. In Hirday Narain v. Income-tax Officer, Bareilly, AIR 1971 SC 33 it was urged before the Supreme Court that. the power of an Income-tax Officer to rectify a mistake under S. 35 of the Income-tax Act was discretionary. 68. In Hirday Narain v. Income-tax Officer, Bareilly, AIR 1971 SC 33 it was urged before the Supreme Court that. the power of an Income-tax Officer to rectify a mistake under S. 35 of the Income-tax Act was discretionary. The plea was repelled and it was held that the Income-tax Officer could not decline to exercise the power if the conditions for its exercise have been shown to exist if a mistake apparent on the face of the record was brought to the notice of the Income-tax Officer and he was found to exercise the power and rectify the same. The Supreme Court observed (at p. 36) : "If a statute invests a public officer with authority to do an act in specified set of circumstances, it is imperative upon him to exercise his authority in a manner appropriate to the case when a party interested and having a right to apply moves in that behalf and circumstances for the exercise of the right are shown to exist. Even if the words used in- the statute are prima facie enabling, the Courts will infer a duty exercise power which is invested in aid of enforcement of a right public or private of a citizen." 69. In Ramana v. International Airport Authority of India, AIR 1979 SC 1628 the Supreme Court discussed at length the question of constitutional obligation on the State when it takes action in exercise of its statutory or executive power. The Court posed a question. Is the State entitled to deal with its property in any manner it likes or award a contract to any person it chooses without any constitutional limitations upon it? What are the parameters of its statutory or executive power in the matter of awarding a contract or dealing with its property? The Supreme Court held that it is a well settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. The Court observed as under (at p. 1636) : "It is indeed unthinkable that in a democracy governed by the rule of law the executive Government or any of its officers should possess arbitrary powers over the interest of the individual. The Court observed as under (at p. 1636) : "It is indeed unthinkable that in a democracy governed by the rule of law the executive Government or any of its officers should possess arbitrary powers over the interest of the individual. Every action of the executive Government must be informed with reasons and should be free from arbitrariness. That is the very essence of rule of law and it is bare minimal requirement. And to the application of this principle it makes no difference whether the exercise of the power involves affection of some right or denial of some privilege." While passing an order under S. 3(4) of the Act the State Government exercises statutory power for the exercise of which statutory norms and standards have been laid down. The Government does not enjoy arbitrary discretion or power to reject the application on any ground it may think fit as exercise of its power even in the matter of granting privilege is hedged in by statutory standards. The activities of the Government have a public element. Bhagwati, J. speaking for the Court in Ramana's case observed (at p. 1637-38) : "It must, therefore, be taken to be the law that where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largess, the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person its pleases, but its action must be in conformity with standard or norm which is not arbitrary, irrational or irrelevant. The power of discretion of the Government in the matter of grant of largess including award of jobs, contract, quotas, licences etc. must be confined and structured by rational, relevant and non-discriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle, which in itself was not irrational, unreasonable or discriminatory." The petitioners have challenged the impugned order,on the ground that the State Government has not considered the question of exemption in accordance with Section 3(4) of the Act. Instead it has acted arbitrarily in rejecting the petitioners' application for exemption. Instead it has acted arbitrarily in rejecting the petitioners' application for exemption. Even if the petitioners have no legal right to obtain exemption they have a legal right to get their application considered by the State Government in accordance with the provisions of S. 3(4) of the Act and if the Government fails to do that, they have a right to approach the High Court under Article 226 of the Constitution. 70. Secondly, the learned Advocate General urged that while considering the grant of exemption under S. 3(4) of the Act, the State Government is not required to act judicially or in a quasi judicial manner, instead it performs purely administrative functions, as such there is no duty cast on the Government to observe the principles of natural justice or to afford personal hearing. The impugned order cannot therefore be challenged on the ground of violation of principles of natural justice. While it is true that S. 3(4) of the Act does not expressly provide for a judicial hearing the nature of power exercised by the State Government is administrative in nature, but that does not absolve the State from following the principles of natural justice. Principles of natural justice have developed and the consensus of recent judicial opinions is that even in administrative matters having regard to the consequences of the order which may be passed, the principles of natural justice should be complied. In State of Orissa v. Dr. (Miss) Binapani Dei, AIR 1967 SC 1269 the Supreme Court held that where administrative order involves civil consequences, the order must be made consistent with the rules of natural justice. 71. In A. K. Kraipak v. Union of India, AIR 1970 SC 150 the Supreme Court held that the dividing line between an administrative power and a quasi judicial power is quite thin and is being gradually obliterated in a welfare State like ours. It is inevitable that the jurisdiction of the administrative bodies is increasing at a rapid rate. The concept of rule of law will lose its validity if the instruments of the State are not charged with the duty of discharging these functions in a fair and just manner. The requirement of acting judicially in a sense is nothing but a requirement to act justly and fairly and not arbitrarily or capriciously. The concept of rule of law will lose its validity if the instruments of the State are not charged with the duty of discharging these functions in a fair and just manner. The requirement of acting judicially in a sense is nothing but a requirement to act justly and fairly and not arbitrarily or capriciously. The procedures which are considered inherent in the exercise of a judicial power are merely those which facilitate if not ensure a just and fair decision. In recent years the concept of quasi-judicial power has been going a radical change. What was considered as administrative power some years back is not being considered as a quasi-judicial power. 72. In' Mohd. Rashid v. State of U. P., AIR 1979 SC 592 : (1979 All LJ 346) it was further held that any decision whether executive, administrative or judicial or quasi- judicial is no decision if it cannot be `just' i.e. an impartial and objective assessment of all the pros and cons of a case after due hearing to the parties concerned. 73. In S. L. Kapoor v. Jagmohan, AIR 1981 SC 136 a reference was made to Schmidt v. Secry. of State of Home Affairs, (1969) 2 Ch. D. 149, in which it was observed, "The speeches in Ridge v. Baldwin, 1964 A. C. 40 show that administrative body, in a proper case, he bound to give a person Who is affected by their decision an opportunity of making representatives. It all depends whether he has some right or interest or I would add some legitimate expectation of which it woad I riot be fair to deprive him." In Para 24 it was held : "In our view the principles of natural justice know of no exclusionary rule dependent on whether it would have,made any difference if natural justice had been observed. The non- observance of natural justice is itself prejudice to any man and proof of prejudice independently of proof of denial of natural justice is unnecessary. If ill comes from a person who has denied justice that the person who has been denied justice is not prejudiced. The non- observance of natural justice is itself prejudice to any man and proof of prejudice independently of proof of denial of natural justice is unnecessary. If ill comes from a person who has denied justice that the person who has been denied justice is not prejudiced. In Maneka Gandhi v. Union of India, AIR 1978 SC 597 it was held (at p. 628) : "The law must, therefore, now be taken to be well settled that even in an administrative proceeding which involves civil consequences, the doctrine of natural justice must be held to be applicable." The conspectus of the judicial opinion is clear that the ultimate purpose of observance of principles of natural justice is to ensure fair play and justice in both kind of proceedings, be it administrative or quasi-judicial and in order to achieve that purpose it becomes necessary to observe the principles of natural justice even while passing administrative orders. In the instant case, however, the Government was bound to afford opportunity of personal hearing to the petitioners and to observe the principles of natural justice in view of the directions issued by the earlier Division Bench, reference to which has already been made by us in the earlier part of the judgment. 74. Thirdly, the learned Advocate General urged that the earlier judgment of the Division Bench is not a judgment in the eye of law as it was totally without jurisdiction. We fail to appreciate this submission. On the earlier occasion when the petitioners' application had been rejected by the Government, they filed a writ petition in this Court which was allowed on the ground that the State Government had passed the order without considering the relevant factors specified in S. 3(4) of the Act. This Court directed the State Government to consider the same afresh after hearing the petitioners. In our opinion, the High Court did not exceed its jurisdiction nor it created any legal right in the petitioners favour. It is significant to note that the State Government preferred an appeal before the Supreme Court but the same was dismissed. The submission that the earlier judgment of the High Court was in excess of jurisdiction, consequently the directions issued by it could legally be ignored is wholly misconceived. As already pointed out, the earlier judgment has become final between the parties. The submission that the earlier judgment of the High Court was in excess of jurisdiction, consequently the directions issued by it could legally be ignored is wholly misconceived. As already pointed out, the earlier judgment has become final between the parties. The State was bound to carry out the directions issued by the High Court. It is not open to it to ignore those directions. The High Court had territorial jurisdiction to entertain the petition and decide it. There was no patent lack of jurisdiction. Even if the High Court had on the earlier occasion wrongly interpreted sub-section (4) of S. 3 in issuing the directions, the judgment cannot by any stretch of imagination he held to he in excess of jurisdiction. 75. Fourthly. the learned Advocate General submitted that even if the State Government has failed to comply with the directions issued by the earlier Division Bench of this Court, the impugned order is not vitiated. We must confess we are unable to accept the submission of the learned Advocate General. Once the decision of the High Court has become final the parties to the same are hound in law to carry out the directions given by the earlier Division Bench. The State Government like any other litigant is legally bound to carry out the directions of this Court issued under Article 226 of the Constitution. The judicial discipline and the constitutional mandate requires the State to obey and comply with the directions issued by the High Court, as no one has authority in law to ignore the directions issued by the High Court. 76. Fifthly, the learned Advocate General: urged that if the State Government had failed to follow the directions issued by this Court, the proper remedy for the petitioners was to initiate contempt proceedings, instead of filing a fresh petition challenging the impugned order. This submission we have stated only to be rejected. Even if any of the petitioners could initiate contempt proceedings against the State, they are not disentitled to maintain writ petition challenging the impugned order which affects their rights. 77. Sixthly, the learned Advocate General urged that while refusing exemption the State Government is not under any legal obligation to record reasons in the order, it is open to it to pass a two line order rejecting the petitioners' request for exemption. 77. Sixthly, the learned Advocate General urged that while refusing exemption the State Government is not under any legal obligation to record reasons in the order, it is open to it to pass a two line order rejecting the petitioners' request for exemption. In the circumstances the Court should ignore the reasons altogether as contained in the impugned order, it should look at the operative portion of the order in upholding its validity. We find no merit in this submission. Once reasons are recorded by the Government. its validity has to be sustained on the reasons contained in the order. It is not open to the Court to ignore those reasons. It is through the process of examining the reasons that the Court determines the question as to whether the State Government considered the relevant factors and applied its mind to them. Reasons are links between the materials on which the conclusions are based. If the authorities give reasons and they are not good reasons, the Court can direct the authority to reconsider the matter in the light of the relevant matters as was held by the Supreme Court in Hochtief Gammon v. State of Orissa, AIR 1975 SC 2226 . Reasons disclose as to how the mind is applied to the subject matter for decision whether it is purely administrative or quasi-judicial as held by the Supreme Court in Union of India v. M. L. Capoor, AIR 1974 SC 87 . Reasons reveal a rational nexus between the facts considered and the conclusions reached. Only in this way can opinions or decisions recorded be shown to be manifestly just and reasonable. Again, the Supreme Court in Mohinder Singh Gill v. Chief Commissioner AIR 1978 SC 851 observed as under (at p. 858) :- "When a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in.the shape of affidavit or otherwise. Otherwise an order bad in the beginning may by the time it comes to the Court on account of a challenge get validated by additional grounds later brought out." In view of the above authoritative decision of the Supreme Court it is not permissible to this Court to ignore the reasons contained in the impugned order. Otherwise an order bad in the beginning may by the time it comes to the Court on account of a challenge get validated by additional grounds later brought out." In view of the above authoritative decision of the Supreme Court it is not permissible to this Court to ignore the reasons contained in the impugned order. Moreover, paragraph 2 of the impugned order clearly states that the petitioners request for exemption from duty has been rejected on the reasons contained in the subsequent paragraphs. The validity of the order has to be sustained only on the basis of reasons contained in the subsequent paragraphs of the order and not otherwise. 78. Seventhly, the learned Advocate General urged that since the State Government has by the impugned order rejected the petitioners request for exemptions in public interest there is strong presumption that the order is in public interest and the Court should therefore not delve further in the matter. While it is true that once the order is passed by the Government, which ex facie shows that the order is passed in public interest, there is a presumption that the order is in public interest, but the presumption is rebuttable. Moreover, when such an order contains reasons the Court has to examine the reasons to ascertain as to whether those reasons are related to public interest. If on scrutiny of the reasons the Court comes to the conclusion that the reasons do not justify the order, the Court has jurisdiction to interfere with the order. The learned Advocate General placed reliance on Bakul Cashew Co. v. Sales Tax Officer (1977) 40 S. T. C. 178: (197 7 Tax LR 2169) (Ker). In our opinion that case is not relevant to the matter under consideration. 79. Eightly, the learned Advocate General submitted that the proceedings under Article 226 of the Constitution being discretionary in nature, this Court should not grant any relief to the petitioners as the petitioners have evaded payment of electricity duty for sufficiently long time in spite of their being in sound financial position and having means to pay the same. He further urged that the petitioners are liable to pay interest on the amount of duty which they have not paid to the Government. He further urged that the petitioners are liable to pay interest on the amount of duty which they have not paid to the Government. While it is true that the proceedings under Article 226 of the Constitution are discretionary and this Court has jurisdiction to refuse relief to a petitioner on the particular facts of the case, but merely because the petitioners did not pay duty they are not disentitled to any relief, in this connection it is noteworthy that the petitioners applied for the grant of exemption in 1972. The State Government refused to grant exemption, against that order a writ petition was filed in this Court and an stay order was obtained. During the pendency of the writ petition the petitioners were not liable to pay duty under the interim order of this Court. The writ petition was allowed and the State Government was directed to decide the matter again. The State Government took eight years' time to decide the matter. During this period the State Government did not make any efforts to realise the duty. Thereafter again when the impugned order was passed, the petitioners obtained a stay order from this Court. The petitioners were well protected by the orders of this Court and they had not resorted to any questionable conduct in not paying the electricity duty. The learned Advocate General has failed to point out any suppression of material facts on the part of the petitioners or any such conduct which can disentitle them to relief. 80. Lastly, the learned Advocate General urged that if the impugned order is found to be vitiated the Court may itself decide the question of grant of exemption instead of remanding the matter to the State Government. In this connection, he submitted that if the matter is remanded to the State Government, it may take considerable time in deciding the matter and it may again commit mistakes which may vitiate the order. We find no merit in the submission. S. 3(4) of the Act invests power in the State Government to grant exemption. That function cannot be usurped by this Court in exercising jurisdiction under Article 226 of the Constitution. We find no merit in the submission. S. 3(4) of the Act invests power in the State Government to grant exemption. That function cannot be usurped by this Court in exercising jurisdiction under Article 226 of the Constitution. This Court can merely direct the State Government to consider relevant matters in passing the order, it has no jurisdiction or authority to substitute its own judgment for that of the Government and to exercise the powers and functions which the legislature has allocated to the State Government. It would he useful to refer to the observations of the Supreme Court in Excise Commend. Prem Jeet Singh, AiR 1983 SC 1056 . The High Court had quashed the order of the Excise Commissioner and thereafter it had assumed the role of the Licensing Authority in directing the Commissioner to accept the bid of a party. The Supreme Court did not approve of this action of the High Court. It set aside the order and observed as under (at p. 1060) : "If the High Court thought that the Excise Commissioner's approach to the problem was wrong or that he had applied incorrect criteria or taken into consideration irrelevant. consideration the proper thing to do was to Indicate the rightful approach, the correct criteria and the relevant considerations and direct the Excise Commissioner to reconsider the matter in proper perspective." We are, therefore, of the opinion that we have no jurisdiction or authority to assume the role of the State Government in passing orders on the application made by the petitioners for exemption from duty. 81. For the reasons stated above we allow the petition and hold that the impugned order of the State Government is not sustainable in law. Accordingly we issue a writ of certiorari quashing the order of the State Government dated 16-2-1982 as well as the notice of demand dated 3-3-1982. We further direct the State Government to consider the petitioner's request for exemption in accordance with the directions slued by the Division Bench of this Court in Writ Petn. No. 4521 of 1982 and also in the light of the observations contained in this judgment after affording opportunity of personal hearing to the petitioners. The petitioners are entitled to their costs.