Judgment Jawahar Lal Gupta, J. 1. Is the provision contained in Section 30-AA which provides that "notwithstanding any exemption granted to any class of industries under Section 30-A of this Act, such industries shall pay the surcharge levied under Sub-section (I-C) of Section 5 of the Act...", invalid? This is the core of the controversy in this bunch of 30 petitions. Counsel for the petitioners have referred to the facts in CWP No. 3693 of 2002. These may be briefly noticed. 2. The first petitioner is a registered Association. Petitioner Nos.2 and 4 are its members. The association was registered on July 30, 1998. 3. The Punjab Government framed policies for Industrial Development in the State at different intervals of time in the years 1989, 1992 and 1996. Certain concessions including exemption from payment of sales-tax and grant of subsidies were announced. The petitioners claimed that they were "granted eligibility/exemption certificates" by which they were exempted from payment of sales/purchase tax for a period of 7 years. On April 11, 2000, the State Legislature enacted the Punjab Social Security Act, 2000 . Under Section 3, a Cess was imposed on the sale and purchase of goods. By Act No. 18 of 2000, the provision regarding payment of Cess was amended. The rate of cess was fixed at 10% of the tax payable on sale and purchase of taxable goods. The validity of this Act was questioned. The challenged was upheld vide judgment dated September 27, 2001. 4. The attempt to levy Cess having failed, the Governor of Punjab promulgated the Punjab General Sales Tax (Second Amendment) Ordinance 2001. This Ordinance was published in the. Gazette of November 7, 2002. On January 17, 2002, the Legislature had enacted the Punjab General Sales Tax (Amendment) Act, 2002. By the Amendment Act, Section 30-AA was inserted. It was provided that notwithstanding any exemption granted to any class of Industries under Section 30-A of the Act, the said Industries shall pay the surcharge levied under Sub-section (I-C) of Section 5 of the Act. 5. The petitioners alleged that "the impugned Act imposes a tax on the taxable turnover." It is unconstitutional and a fraud on the power. In pursuance to the provision, "petitioner Nos.2 and 4 have already been issued notices... 5. The petitioners alleged that "the impugned Act imposes a tax on the taxable turnover." It is unconstitutional and a fraud on the power. In pursuance to the provision, "petitioner Nos.2 and 4 have already been issued notices... to pay scales tax surcharge @ 10 % with effect from 6th November, 2001." The petitioners pray that the provisions of Section 30-AA as introduced by Punjab Act No.3 of 2002 and the notices, copies of which have been produced as Annexures P.7 and P.3 be quashed. 6. In some of the connected cases, provisions of the ordinance as published on November 7, 2001 have been challenged. It has also been prayed that the respondents be restrained from proceeding in pursuance to the provisions of the Ordinance. 7. Mr. H.L. Sibal counsel for the petitioners contended that exemption from payment of sales tax having been granted the provision for levy of surcharge is unconstitutional and, thus, liable to be struck down. He further contended that the taxable turn-over of the petitioners having not been determined under the Punjab General Sales Tax Act, no notice of payment of surcharge could have been issued. Counsel further submitted that even if the challenge to the validity of the impugned Act were to be negatived, the liability should form a part of the amount for which exemption has been granted and that the petitioners should not be compelled to pay. 8. The questions that arise for consideration are;- (i) Is the provisions contained in Section 30-AA invalid? (ii) Are the communications, copies of which have been produced an Annexures P.7 and P.8, notices for payment of surcharge* and has the competent authority acted illegally? (iii) Are the petitioners entitled to exemption from payment of surcharge on the ground that they have been granted exemption under Section 30-A from the payment of sales-tax or that the due amount should form a part of the amount for which exemption has been granted? 9. Reg:(i) Mr. Sibal contended that exemption from payment of sales tax having been granted, the levy of surcharge by the impugned provision contained in Section 30-AA is unconstitutional? Is it so? The Punjab General Sales Tax Act was enacted in the year 1948. The object was "to provide for the levy of a general tax on the sale or purchase of goods in Punjab." Section 5 lays down the rate of tax. Is it so? The Punjab General Sales Tax Act was enacted in the year 1948. The object was "to provide for the levy of a general tax on the sale or purchase of goods in Punjab." Section 5 lays down the rate of tax. Provisions for deferment and exemption have also been made. In the present case, we are concerned with the grant of exemption to a class of industries. This is governed by the provision in Section 30-A. By this provision, it has been inter-alia provided that the State Government may, if satisfied, that it is necessary or expedient so to do in the interest of industrial development of the State, exempt such class of industries from the payment of tax, for such period and subject to such conditions as may be prescribed." Thus, exemption from payment of tax can be granted in the interest of industrial development. However, conditions can also be imposed. To regulate the matter, the Punjab General Sales Tax (Development and Exemption) Rules, 1991 have been framed. These rules were enforced with retrospective effect from April 1, 1989. Provisions regarding conditions of eligibility, benefits to sick units, quantum of entitlement, mode of availing the benefits and furnishing of security have been made. Rule 8 also provides for cancellation or deferment of exemption certificate. These provisions make it clear that the grant of exemption is not absolute. It is subject to fulfilment of certain conditions of eligibility. Even if granted the Authority is empowered to cancel the certificate of exemption. By the impugned Act, certain new provisions have been inserted. The provisions relevant for the present set of cases are continued in Section 2 and 4 of the Amending Act. These read as under:- Section 2 "In the Punjab General Sales Tax Act, 1948 (hereinafter referred to as the Principal Act), in Section 5. (i) in Sub-section (i), for the words twenty paise, the words thirty paise shall be substituted; and (ii) after Sub-section (I-B), the following sub-sections shall be inserted namely;- (I-C) - Notwithstanding anything contained in this Act, there shall be levied and collected on the taxable turnover of a dealer, a surcharge, which shall be calculated at the rate often per centum of the tax payable by him under this Act. Provided that the aggregate of the tax and the surcharge payable under this Act, shall not exceed in respect of goods declared to be of special importance in inter-State trade or commerce by Section 14 of the Central Sales Tax Act, 1956 the rate fixed by Section 15 of that Act." X X X X X X 4. In the principal Act, after Section 30-A, the following section shall be inserted, namely: 30-AA. Notwithstanding any exemption granted to any class of industries under Section 30-A of this act, such Industries shall pay the surcharge levied under Sub-section (I-C) of Section 5 of the Act, in the manner, as may be prescribed." A perusal of Section 5(I-C) as introduced by Section 2 of the Amending Act shows that a surcharge has been levied "on the taxable turn-over of a dealer. "It has to be "calculated at the rate of 10 percentum of the tax payable by him under this Act." The provision is not relevant in the context of the controversy arising in the present case. Section 30-AA begins with a non absentee clause. The plain words of the provision indicate the legislative intent to levy surcharge under Section 5(I-C) even on the industries which have been granted exemption under Section 30-A of the Act. The clear intention is to allay all doubts with regard to the liability of the dealers who have been granted exemption from payment of sales or purchase tax. The legislature has acted with abundant caution and clarified the matter beyond doubt. It is apparent that the provision should prevail over an executive order for the grant of exemption passed by the competent authority under the Act. Mr. Sibal contended that the provision is a colourable exercise of power. The State Legislature had initially imposed a Cess. Having failed in its attempt, it had now committed a a fraud and levied the impugned surcharge. It is, thus, unconstitutional. This contention cannot be accepted. Under Entry 54 of list II, the State Legislature is competent to levy tax "on the sale or purchase of goods other than newspapers." Thus, the levy of tax on the sale or purchase of goods is clearly within the legislative competence of the State Legislature. A surcharge is only an additional tax. It is similar to the sales tax. As observed by their Lordships of the Supreme Court in Sarojini Tea Co. A surcharge is only an additional tax. It is similar to the sales tax. As observed by their Lordships of the Supreme Court in Sarojini Tea Co. (P) Ltd. v. Collector of Dibrugarh, (1992)2 S.C.C. 156 and in Indian Aluminium Co. and Ors. v. State of Kerala and Ors. (1996)7 S.C.C. 637, "the expression surcharge in the context of taxation means an additional imposition which results in enhancement of the tax and the nature of additional imposition is the same as the tax on which it is imposed as surcharge." The State Legislature being competent to levy tax on the sale or purchase of good, the imposition of surcharge cannot be outside its purview. A tax being a compulsory exaction of money, it is not an unreasonable restriction on the freedom of trade and commerce. It is not unconstitutional. Mr. Sibal contended that the effort of the State to levy a similar surcharge was annulled by this Court while dealing with the validity of the Punjab Social Security Act, 2000. He referred to the decision in C.W.P. No.992 of 2001 (Pioneer Agro Extracts Ltd and Anr. v. The State of Punjab and others). Thus, the impugned levy is also illegal. We have perused the order. In this case, a Cess was levied "on ad-valorem basis at the rate of 10% of the tax payable on all the sales and purchases of goods made under the Punjab General Sales Tax Act, 1948 ..." It was interalia provided that the proceeds of the Cess shall go to a Fund which by virtue of Section 4(2) was to "vest with the Government." It was held that the "revenues collected by the State as taxes must go into the Consolidated Fund of the State. These must be utilised to meet the grants made by the Assembly. No money can be withdrawn from the Consolidated Fund except under appropriation made by law passed in accordance with the provisions of Article 204... Thus, the revenues cannot go into any fund like the Social Security Fund." In this background, the Bench had taken the view that the levy was invalid as the proceeds were not an accertion to the Consolidated Fund of the State but to a Fund. Such is not the position in the present case. The State has the undoubted power to impose the impugned levy. Such is not the position in the present case. The State has the undoubted power to impose the impugned levy. It has violated no constitutional mandate as was the position in the case of Pioneer Agro (supra). Still further, the existing financial constraints are a national phenomenon. In this situation, the State is making an effort to increase its revenues. The impugned levy is a step in that direction. Since the Act is within the legislative competence of the State Legislature, we find no infirmity in the enactment which may warrant its annulment. It is not unconstitutional or illegal. Even otherwise, it may be mentioned that there is always a presumption in favour of the constitutionality of an enactment. The courts normally presume that the Legislature is aware of the needs of the State made manifest by experience. It, thus, enacts a provision to remedy the situation. In the present case, the Legislature has enacted the provision to raise extra resources. The levy being within the ambit of Entry 54, the impugned enactment is not invalid. In view of the above, the first question is answered against the petitioners. 10. Reg:(ii) Mr. Sibal contended that the surcharge is leviable on the tax payable. Since the petitioners have been granted exemption from payment of purchase and sales tax, the impugned notices issued to them are invalid. Is it so? The copies of the two communications have been produced as Annexures P.7 and P.8. Both the documents bear no date. However, these are identical. The contents of one of these, a copy of which has been produced as Annexure P.7 may be noticed. These are as under:- "By virtue of Section 30 AA of the Punjab General Sales Tax Act, 1948 , added vide Punjab Ordinance No.8 of 2001, the exempted units are liable to pay sales tax surcharge @ 10% w.e.f. 6.11.2001. Strict compliance of the ordinance may please be made under intimation to this office." A perusal of the above shows that the petitioner has only been informed of the liability to pay sales tax surcharge with effect from November 6, 2001. The authority has warned the petitioner to comply with the provisions. The obvious purpose is to bring the provision to the notice of the petitioners. The authority has warned the petitioner to comply with the provisions. The obvious purpose is to bring the provision to the notice of the petitioners. It is to ensure that the dealers are not able to claim that on the basis of the orders of exemption they had not collected the tax and as such, cannot be called upon to pay. Otherwise, for the present, no order of assessment has been passed. No direction for recovery has been issued. No violation of any provision has been shown. Thus, no illegality can be said to have been committed. Resultantly, even the second question is answered against the petitioners. 11. Reg (iii) Mr. Sibal contended that even if the first two contentions do not succeed, the respondents were not entitled to claim that the petitioners have to make the payment At best, the amount which becomes payable can be included in the total amount for which exemption has been granted to each of them. The argument is untenable. Section 30-AA clearly postulates that in spite of the order of exemption granted under Section 30-A, the industry "Shall pay the surcharge levied under Sub-section (1-C) of Section 5 of the Act.." The use of the non absentee clause is indicative of the legislative intent to give an over-riding effect to the provision. It is not merely clarificatory. It is more. The provision embodies a legislative mandate which over-rides an executive order of exemption passed by the authority in exercise of the power under Section 30-A. If the Legislature had intended that in case of units which are exempted from the payment of tax, the amount due on account of surcharge shall be added to the amount leviable by way of tax, it could have said so. The use of the words shall pay clearly militates against the contention as raised by the learned counsel. Mr. Sibal also contended that the surcharge being leviable "at the rate of 10 percen-turn of the tax payable", the petitioners could not be subjected to the levy of surcharge. The argument was that since the industries which had been granted exemption were not liable to pay the tax, the question of paying the surcharge could not arise. The argument is fallacious. The argument was that since the industries which had been granted exemption were not liable to pay the tax, the question of paying the surcharge could not arise. The argument is fallacious. As already observed, the surcharge is to be "levied and collected on the taxable turn-over of a dealer." The petitioners admittedly maintain ac- count of the taxable turn-over. On account of the orders of exemption, they have exemption from actual payment of the tax upto a specific limit. On a harmonious reading of Section 5(I-C) with Section 30-AA, it is clear that despite the exemption granted to the industries like the petitioners, they are liable to "pay the surcharge" on their "taxable turnover... which shall be calculated at the rate of 10 percentum of the tax payable... under the Act.". We cannot read the impugned provision to mean that the levy has to be only a paper addition and the dealer remains exempt from payment till it reaches the limit fixed by the authority while granting exemption. The legislative mandate is to pay. Notwithstanding the exemption, the text is clear. Thus, the contention cannot be accepted. Mr. Sibal referred to the decision of the Kerala High Court in Deputy Commissioner of Sales Tax (law), Board of Revenue (Taxes), Ernakulatn v. K.P. Paper Products, (1989)74 Sales Tax Cases 16. This case is clearly distinguishable on facts. In this case, the unit had come into production after 1st of April 1979. Vide notification - SRO No. 968/80 exemption was granted "in respect of the tax payable under the said Act on the turn-over of the sale of goods produced and sold by the new industrial units under the small scale industries for a period of five years from the date of commencement of sale of such goods by the said units...." The dispute related to the assessment years 1980-81 to 1982-83. The assessee had claimed that when it was exempted from payment of tax, the surcharge could not be included in the computation of liability. The claim was rejected by the assessing authority. Even the appeal was dismissed. On further appeal by the assessee, the Tribunal took the view that additional sales-tax and surcharge could not be levied. The Revenue was aggrieved. On consideration of the matter, the Bench observed in paragraph 7 that what is exempted is only the tax payable and not the goods. Even the appeal was dismissed. On further appeal by the assessee, the Tribunal took the view that additional sales-tax and surcharge could not be levied. The Revenue was aggrieved. On consideration of the matter, the Bench observed in paragraph 7 that what is exempted is only the tax payable and not the goods. Therefore, the tax has to be computed in accordance with the provisions of the Statute on the turn-over of the sale of such goods and the tax so computed has to be deducted from the aggregated. In computing the tax thus payable, the liability of the assessee has to be determined." In paragraph 8, it was further observed that surcharge is really an enhancement of sales tax and not a tax on tax.. Thus, for the purpose of computing the eligibility for exemption in terms of the Government notification, the assessing authority cannot issue a separate demand for the surcharge after allowing exemption in respect of the tax and additional tax payable. If the amount of tax and additional tax computed is eligible for complete exemption, there cannot be a levy of surcharge for that year." It deserves notice that the notification No.968/80 granted a complete "exemption in respect of the tax payable under the said Act." That being the position, even surcharge which was levied prior to the notification was also clearly included. In the present case, the position is entirely different. It is by a specific amendment that the surcharge has been levied with effect from November 7, 2001 when the Ordinance was issued. The levy having been imposed after the order of exemption and in view of the clear language of Section 30-AA, the petitioners can derive no advantage from the decision of the Kerala High Court in the aforesaid case. Learned counsel had also referred to the decisions in Ashok Service Centre and Ors. v. State of Orissa (1993)2 S.C.C. 82 and Arjun Flour Mills v. State of Orissa and Ors., (1998)8 S.C.C. 89. 12. We have considered these decisions. However, we find that the language of the provisions which fell for consideration in these cases was totally different and that the petitioners can derive no advantage therefrom. 13. Accordingly, the third question is also answered against the petitioners. 12. We have considered these decisions. However, we find that the language of the provisions which fell for consideration in these cases was totally different and that the petitioners can derive no advantage therefrom. 13. Accordingly, the third question is also answered against the petitioners. It is held that the petitioners are not entitled to exemption from payment of surcharge on the ground that they had been granted exemption from the payment of sales tax. Equally, the claim that the amount due from the petitioners has to form a part of the total amount for which exemption has been granted is untenable. In terms of the provision, the petitioners have to pay. Otherwise, the purpose shall be defeated. 14. No other point was raised. 15. These cases were heard by us today. We had announced the orders and dismissed the petitions. We have now recorded the reasons for our order, it is held that:- (i) The provisions of the Amending Act as contained in Sections 2 and 4 are not unconstitutional. (ii) The communications at Annexures P.7 and P.8 are not notices for payment of surcharge. By these letters, the industry has been made aware for its liability to pay the surcharge and it has been advised to collect the tax. The authority has not acted illegally in doing so. (iii) The petitioners are not entitled to exemption from payment of surcharge on the ground that they had been granted exemption fro the payment of sales tax. Equally, the claim that the amount due from the petitioners has to form a part of the total amount for which exemption has been granted, is untenable. In terms of the provision, the petitioners have to pay otherwise the purpose shall be defeated. 16. Resultantly, the petitions are dismissed in limine.