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2008 DIGILAW 2315 (ALL)

LIPTON INDIA LIMITED v. STATE OF U. P.

2008-11-20

DEVI PRASAD SINGH, SATISH CHANDRA

body2008
JUDGMENT Heard Sri C. S. Lodha, learned Senior Advocate, assisted by Sri Nandit Srivastava, learned counsel for the petitioner and Sri H. P. Srivastava, learned Additional Chief Standing Counsel for the respondents. The question, cropped up, in this case is as to whether in the event of a situation where an industry has been granted exemption under section 4A of the U.P. Trade Tax Act, 1948 (in short, "the Act"), notice can be issued under section 15A(1)(qq) of the Act for imposition of the penalty relying upon the provisions contained in section 8A(2)(a) of the Act and in case it is permissible, then under what circumstances. The Lipton India Limited, which is a public limited company has got branches at Kolkata (West Bengal), Ambattur, Madras (Tamil Nadu), Dharwad in Karnataka, and Etah (U.P.). During the pendency of the writ petition, the nomenclature has been changed and now it is termed as "Hindustan Unilever Limited", situate at Mumbai. The State Government in pursuance of the power conferred by section 4A of the Act is empowered to issue notification for grant of exemption from payment of trade tax to the industrialists for installation of their units in the backward areas of the State of U.P. as an incentive measure. In pursuance of power conferred by section 4A of the Act, a notification was issued on January 29, 1985 followed by the amended notification dated April 26, 1995. According to the amended notification, the Government has got power to grant exemption from payment of trade tax for the period of six years from the date of the start of the production. By an order dated September 16, 1991, exemption was granted to the petitioner with regard to payment of trade tax from March 8, 1990 for a period of six years. The certificate dated September 16, 1991 has been filed as annexure No. 1 to the writ petition, which has been given effect from March 8, 1990. The Sales Tax Officer of Special Investigation Branch, Agra on October 22, 1992 seized a consignment of tea which was being carried from Mainpuri to Chehisar, manufactured at the industry situated at Etah. It was found by the Sales Tax Officer that the truck was containing the stock of tea bags having invoices of tea manufactured outside the State by the petitioner and its ancillary units. It was found by the Sales Tax Officer that the truck was containing the stock of tea bags having invoices of tea manufactured outside the State by the petitioner and its ancillary units. It was noticed by the Sales Tax Officer that though the rate of tea manufactured was shown as non-taxable under the Act but on the product of tea manufactured outside the State of U.P. and brought to the depot it was found that the trade tax or sales tax is chargeable on such products. Keeping in view the fact that the Etah branch of the petitioner - industry was charging on non-taxable items produced by it, same price of the tea, which was being charged from other units of the petitioner - industry, it was presumed that the petitioner is indirectly charging the trade tax on the products produced from Etah industry. Accordingly, the truck was seized and later on released subject to payment of security to the tune of Rs. 46,845. The Assistant Commissioner passed an order dated February 27, 1993 with regard to release of tea bags subject to payment of security with the observation that since the sales tax has been charged for items produced outside the State of U.P. and not for other, there will be a presumption that the petitioner has been charging the trade tax indirectly. Feeling aggrieved with the order passed by the Assistant Commissioner (Sales Tax), the petitioner preferred an appeal before the Tribunal under section 10 of the Act. The Tribunal, by order dated April 17, 1993, a copy of which has been filed as annexure No. 2 to the writ petition, set aside the order passed by the Assistant Commissioner, Sales Tax and held that the department has illegally issued penalty notice under section 15A(1)(qq) of the Act. The judgment of the Tribunal has been filed as annexure No. 3 to the writ petition. It has not been disputed by the learned Additional Chief Standing Counsel that the Tribunal's judgment has not been impugned by the State Government by preferring a writ petition in this court or before appropriate higher forum in accordance with law and it attains finality. The learned Tribunal has recorded a specific finding that on the perusal of the material on record, there appears to be no evidence which may substantiate the allegation of the charging of trade tax by the petitioner. The learned Tribunal has recorded a specific finding that on the perusal of the material on record, there appears to be no evidence which may substantiate the allegation of the charging of trade tax by the petitioner. The appellant being bona fide dealer was not involved in any act which may amount to charging of trade tax. The relevant portion from the order of the learned Tribunal is reproduced as under : "On perusal of the material available on record, it appears that the Department has not disputed the fact that the appellant is a bona fide dealer and the transaction was duly and properly accounted for by the appellant in his account books maintained in the regular course of business. The seizure of goods and demand of security for the release of the same on the grounds mentioned above cannot be supported because no material has been produced to indicate that the appellant has charged sales tax in any form in respect of the goods covered by bill No. NVO55 pertaining to new unit of Etah. On the other hand, on perusal of the copy of the bill No. NVO55 it is manifest that the appellant has not charged any amount of sales tax in any form or colour. Presumption contrary to it taken by the Department cannot be supported. For the reasons given above, we come to the conclusion that the grounds on which the goods have been seized are not tenable and therefore, the seizure of goods and the demand of security for the release of the same cannot be supported and the goods are, therefore, liable to be released without obtaining any security." In spite of the fact that the learned Tribunal has decided the controversy and observed that no proceedings can be initiated under section 15A(1)(qq) of the Act, the respondent had searched the petitioner's depot situated at Agra on October 8, 1992, October 29, 1992 and November 4, 1992. It was inferred by the respondents from the material available on record in the office of the petitioner - depot, that the petitioner has been charging trade tax from the purchasers indirectly by adding an extra amount while fixing the cost of the tea bags. It was inferred by the respondents from the material available on record in the office of the petitioner - depot, that the petitioner has been charging trade tax from the purchasers indirectly by adding an extra amount while fixing the cost of the tea bags. However, neither there appears to be any material on record nor attention of the court has been brought to indicate as to what was the price, quoted over the tea bags. The presumption of respondents is based on the fact that the cost of blended tea bags is the same, which is produced at Etah branch and other branches of the petitioner's company. It was found by the respondents that separate stock registers were maintained in the depot indicating the stock of tea bags produced at various branches of the country. The stock register shows the quantity of tea bags indicating the respective industries from where they are produced and the price of tea bags was assessed as same. Thereafter the respondent had issued fresh notices under section 15A(1)(qq) of the Act on May 17, 1993. Feeling aggrieved by the notice issued by the respondents, the petitioner had approached this court by preferring the writ petition under article 226 of the Constitution of India, which was decided finally vide judgment and order dated August 3, 1993. While deciding the controversy in Writ Petition No. 3330 (M/B) of 1993, this court had taken the notice of the fact that the Commissioner, Trade Tax has got ample power to adjudicate the controversy with regard to the fact as to whether the trade tax is payable over the goods produced at Etah industry or not. The observation made by the Division Bench of this court in the judgment [W.P. No. 3330 (M/B) of 1993, decided on August 3, 1993] is reproduced as under : "The judgment of the Tribunal has been annexed as annexure No. 2 to the writ petition, dated April 17, 1993. The fresh notice issued thereafter is annexed as annexure No. 3 and onward. Notice, annexure No. 3, is dated May 17, 1993 and other notices are also of the same date in respect of different assessment years. The fresh notice issued thereafter is annexed as annexure No. 3 and onward. Notice, annexure No. 3, is dated May 17, 1993 and other notices are also of the same date in respect of different assessment years. In this regard it is indicated that an application under rule 4 of the U.P. Sales Tax Rules has been moved before the Commissioner, Sales Tax, U.P., Lucknow on July 14, 1993 but it is still pending and no orders have been passed so far thereon. The assessing authority has fixed August 7, 1993 as the date in the assessment proceedings. The learned counsel for the petitioner has placed reliance on a case Vivek Automobiles Ltd. v. Commissioner of Sales Tax reported in [1992] UPTC 928. It has been prayed that in an application under rule 4, the Commissioner, Sales Tax had full power to issue necessary direction for giving effect to the judgment and decisions of the Tribunals." In pursuance of the direction issued by this court, the Trade Tax Commissioner had decided the petitioner's representation by the impugned order dated December 29, 1993, assailed in the present writ petition. The learned Commissioner instead of going into the merits of the controversy and to find out whether trade tax is payable or not over the tea bags produced of Etah branch or whether the Department has got right to issue notice under section 15A(i)(qq) of the Act, recorded a finding that since the enquiry is pending before the subordinate authority (Sales Tax Officer), it is appropriate that the controversy may be adjudicated by the Sales Tax Officer. The finding recorded by the Tribunal could not impress the Trade Tax Commissioner while passing the impugned order dated December 29, 1993. Feeling aggrieved, the petitioner approached again and filed the present writ petition. Sri C. S. Lodha, the learned Senior Counsel appearing for the petitioner has raised three propositions of law while assailing the impugned action of the respondents : (i) Whether action initiated is ex facie without jurisdiction and accordingly notices be quashed to avoid multiplicity of litigation. (ii) Whether eligibility certificate issued and enforced, the assessing authority has got no jurisdiction and he cannot sit in judgment, more so when a finding has been recorded by the Tribunal. (ii) Whether eligibility certificate issued and enforced, the assessing authority has got no jurisdiction and he cannot sit in judgment, more so when a finding has been recorded by the Tribunal. (iii) Whether the tax should be recovered as such "by way of tax", else it is only the price, which is recovered and not the tax and the petitioner has got right to indicate the composite price over the tea bags and it cannot be treated as tax. The indication of similar composite price over the tea bags produced at Etah branch and other branches situated outside the State of U.P. shall not make out a case that the petitioner is charging trade tax. The learned counsel for the petitioner has relied upon the judgments reported in Maxims Delicacies (Private) Limited v. State of U.P. [1988] UPTC 100 (All), Kumar Fuels v. State of Uttar Pradesh [1986] 63 STC 467 (All); [1986] UPTC 357, Dilip Industries v. State of U.P. [1987] UPTC 412 (All), Mahalaxmi Roller Flour Mills v. State of U.P. [1984] UPTC 1270 (All), Calcutta Discount Co. Ltd. v. Income-tax Officer [1961] 41 ITR 191 (SC), Ahmedabad Steel Craft and Rolling Mills v. State of Gujarat [1983] 52 STC 227 (Guj), Mather & Platt Ltd. v. State of Maharashtra [1983] 53 STC 104 (Bom), Delhi Cloth and General Mills Co. Ltd. v. Commissioner of Sales Tax [1971] 28 STC 331 (SC), Subhash Iron & Steel Rolling Industries v. State of Gujarat [1982] 50 STC 305 (Guj), Bhaidas Cursondas & Co. v. Commercial Tax Officer [1975] 35 STC 459 (Karn), Bata India Limited v. State of Maharashtra [1983] 53 STC 132 (Bom), Sri Neelakanteshwar Oil Industries v. State of Karnataka [1995] 98 STC 303 (Karn), Deputy Commissioner of Commercial Taxes (Vigilance) v. Hindustan Lever Limited (Lipton Division) [2007] 10 VST 330 (Karn), M.P. State Agro Industries Development Corpn. v. Commercial Tax Officer [1975] 35 STC 459 (Karn), Bata India Limited v. State of Maharashtra [1983] 53 STC 132 (Bom), Sri Neelakanteshwar Oil Industries v. State of Karnataka [1995] 98 STC 303 (Karn), Deputy Commissioner of Commercial Taxes (Vigilance) v. Hindustan Lever Limited (Lipton Division) [2007] 10 VST 330 (Karn), M.P. State Agro Industries Development Corpn. Ltd. v. Jahan Khan [2007] 10 SCC 88, Union of India v. Vicco Laboratories [2007] 218 ELT 647 (SC), Dhampur Sugar Mills Ltd. v. Union of India [2000] 122 ELT 333 (SC), Assistant Secretary, Board of Revenue (Taxes), Ernakulam v. P. Krishnaswamy Reddiar [2003] 131 STC 467 (Ker), Anil Kumar Ramesh Chandra Glass Works v. State of Uttar Pradesh [2000] 119 STC 305 (All), Pan Tyres v. State of U.P. [1997] 105 STC 111 (All), Wipro Infotech Limited v. Additional Deputy Commissioner of Commercial Taxes (Assessment - II) [2000] 117 STC 244 (Karn), Commissioner of Sales Tax v. Madhya Bharat Papers Ltd. [1996] 103 STC 142 (MP) and Maurya Timbers v. State of Haryana [1997] 104 STC 243 (P&H). On the other hand Sri H. P. Srivastava, learned Additional Chief Standing Counsel, submitted that since sufficient material has been found against the petitioner, when the depot was raided in the year 1992, that should be looked into by the authorities concerned and the petitioner should approach the authorities as he has got alternative remedy to prefer first appeal and second appeal then the revision under sections 9 and 10 of the Act. Sri H. P. Srivastava further submits that the petitioner was having separate stock register of various depots and correspondence which indicates that the petitioner was charging the same price of his products produced from all the branches within the State of U.P. or outside the State of U.P. The submission of the learned Additional Chief Standing Counsel is that the Department had not initiated assessment proceedings under section 7 of the Act; rather a notice has been issued under section 15A(1)(qq) of the Act to impose penalty. No assessment proceeding has been initiated against the petitioner because of the fact that payment of trade tax has been exempted by the State Government. It has been submitted that the penalty can be imposed for any conduct which is violative of the provisions contained in the Act. No assessment proceeding has been initiated against the petitioner because of the fact that payment of trade tax has been exempted by the State Government. It has been submitted that the penalty can be imposed for any conduct which is violative of the provisions contained in the Act. The learned counsel for the respondents had relied upon the judgments in State of U.P. v. Anil Kumar Ramesh Chandra Glass Works reported in [2006] 145 STC 656 (SC); [2005] 11 SCC 451, Ansal Papers, Sikandrabad v. State of U.P. [2008] UPTC 21, Radha Krishna Mahavir Prasad, Northern Railway City Booking Agent, Chowk, Allahabad v. Commissioner of Sales Tax [1993] UPTC 1283, C. A. Abraham v. Income-tax Officer, Kottayam [1961] 41 ITR 425 (SC); AIR 1961 SC 609 . Before adjudicating the controversy on merit, it shall be appropriate that we should record a finding with regard to the alternative remedy available to the petitioner under the Act. Admittedly, the petitioner has approached this court raising the question of jurisdiction of authorities. Whether the authorities have got right to issue the impugned notice under the Act or not ? What is the effect of the judgment of the Tribunal with regard to almost same cause of action ? Whether the Tribunal has recorded a finding that no notice can be issued for imposition of penalty under the Act ? Since question of jurisdiction has been raised and more so the Commissioner while adjudicating the controversy in pursuance of the earlier judgment of this court had not applied his mind being the supervisory authority, whether the writ petition should be dismissed exclusively on the ground of availability of alternative remedy ? By a catena of judgments, since long, the honourable Supreme Court settled that alternative remedy is no bar to exercise writ jurisdiction. In the case of S. N. Sharma v. Bipen Kumar Tewari AIR 1970 SC 786 , honourable Supreme Court held that alternative remedy is the rule of discretion and not an exclusion of jurisdiction under article 226 of the Constitution of India. In the case of S. N. Sharma v. Bipen Kumar Tewari AIR 1970 SC 786 , honourable Supreme Court held that alternative remedy is the rule of discretion and not an exclusion of jurisdiction under article 226 of the Constitution of India. Their Lordships in the case Rashid Ahmed v. Municipal Board, Kairana reported in AIR 1950 SC 163 , Baburam Prakash Chandra Maheswari v. Antarim Zila Parishad AIR 1969 SC 556 and Himmatlal Harilal Mehta v. State of Madhya Pradesh [1954] 5 STC 115 (SC); AIR 1954 SC 403 further held that it is self-imposed limitation and does not oust the jurisdiction of this court to exercise power conferred by article 226 of the Constitution of India even if an alternative remedy is available to an aggrieved person. It has also been held by the honourable Supreme Court in the cases Salonah Tea Company Ltd. v. Superintendent of Taxes reported in [1988] 69 STC 290; AIR 1990 SC 772 , T.N. State Transport Corporation v. Neethivilangan [2001] 9 SCC 99, Shiv Shankar Dal Mills v. State of Haryana [1980] 2 SCC 437 that where public authority is acting contrary to provision of law or taking undue advantage of its own then case should not be thrown out because of availability of alternative remedy. In one other judgment in Whirlpool Corporation v. Registrar of Trade Marks reported in [1998] 8 SCC 1, the honourable Supreme Court held that alternative remedy shall not be a bar and dismissal of writ petition on the ground of alternative remedy in spite of the fact that the authorities are abusing their power is not proper. Their Lordships of the honourable Supreme Court ruled that if the order passed by the authorities is arbitrary, by abusing the power or in violation of principle of natural justice, it may always be subjected to judicial review under article 226 of the Constitution of India. The learned counsel for the petitioner has rightly relied upon a recent judgment of the honourable Supreme Court in the case of Jahan Khan [2007] 10 SCC 88, where the honourable Supreme Court held that even if the remedy of appeal is available but the action of the State authorities is highly arbitrary, the writ petition can be entertained. The learned counsel for the petitioner has rightly relied upon a recent judgment of the honourable Supreme Court in the case of Jahan Khan [2007] 10 SCC 88, where the honourable Supreme Court held that even if the remedy of appeal is available but the action of the State authorities is highly arbitrary, the writ petition can be entertained. The relevant portion from the judgment is reproduced as under : "Before parting with the case, we may also deal with the submission of learned counsel for the appellants that a remedy by way of an appeal being available to the respondent, the High Court ought not to have entertained his petition filed under article 226/227 of the Constitution. There is no gainsaying that in a given case, the High Court may not entertain a writ petition under article 226 of the Constitution on the ground of availability of an alternative remedy, but the said rule cannot be said to be of universal application. The rule of exclusion of writ jurisdiction due to availability of an alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case, in spite of the availability of an alternative remedy, a writ court may still exercise its discretionary jurisdiction of judicial review, in at least three contingencies, namely, (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is failure of principles of natural justice; or (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged. In these circumstances, an alternative remedy does not operate as a bar. (Whirlpool Corporation v. Registrar of Trade Marks [1998] 8 SCC 1, Harbanslal Sahnia v. Indian Oil Corpn. Ltd. [2003] 2 SCC 107, State of H.P. v. Gujarat Ambuja Cement Ltd. [2005] 6 SCC 499 and Sanjana M. Wig v. Hindustan Petroleum Corpn. Ltd. [2005] 8 SCC 242)." In the case of Vicco Laboratories [2007] 218 ELT 647 (SC) again the honourable Supreme Court reiterated the earlier propositions that alternative remedy is no bar for exercising writ jurisdiction by the courts. Their Lordships held that where a show-cause notice is issued either without jurisdiction or in an abuse of process of law, certainly in that case, the writ court would not hesitate to interfere even at the stage of issuance of show-cause notice. Their Lordships held that where a show-cause notice is issued either without jurisdiction or in an abuse of process of law, certainly in that case, the writ court would not hesitate to interfere even at the stage of issuance of show-cause notice. The relevant portion is reproduced as under : "Normally, the writ court should not interfere at the stage of issuance of show-cause notice by the authorities. In such a case, the parties get ample opportunity to put forth their contentions before the concerned authorities and to satisfy the concerned authorities about the absence of case for proceeding against the person against whom the show-cause notices have been issued. Abstinence from interference at the stage of issuance of show-cause notice in order to relegate the parties to the proceedings before the concerned authorities is the normal rule. However, the said rule is not without exceptions. Where a show-cause notice is issued either without jurisdiction or in an abuse of process of law, certainly in that case, the writ court would not hesitate to interfere even at the stage of issuance of show-cause notice. The interference at the show-cause notice stage should be rare and not in a routine manner. Mere assertion by the writ petitioner that notice was without jurisdiction and/or abuse of process of law would not suffice. It should be prima facie established to be so. Where factual adjudication would be necessary, interference is ruled out." The other judgment referred by the petitioner's counsel of Dhampur Sugar Mills [2000] 122 ELT 333 (SC) also reiterated the aforesaid proposition of law. On the other hand reliance has been placed by the respondents' counsel on the judgment of the honourable Supreme Court, in the case of State of U.P. v. Anil Kumar Ramesh Chandra Glass Works [2006] 145 STC 656; [2005] 11 SCC 451 seems to be not applicable under the facts and circumstances of the case. In the case of Anil Kumar [2006] 145 STC 656; [2005] 11 SCC 451 though the controversy relates to a situation where exemption was granted under section 4A of the Act but the allegation against the taxpayer was that he has charged the trade tax before the grant of exemption by the State. In the case of Anil Kumar [2006] 145 STC 656; [2005] 11 SCC 451 though the controversy relates to a situation where exemption was granted under section 4A of the Act but the allegation against the taxpayer was that he has charged the trade tax before the grant of exemption by the State. Naturally, the Department was right in issuing notice for imposition of tax or for penalty for the period when no exemption was granted by the State Government but the assessee was charging trade tax from the customers. The case of Anil Kumar [2006] 145 STC 656; [2005] 11 SCC 451 does not seem to be applicable. The case of Radha Krishna Mahavir Prasad [1993] UPTC 1283 as well as Ansal Papers [2008] UPTC 21, relied upon by the learned Additional Chief Standing Counsel does not relates to the controversy where the State Government has taken action for imposition of penalty on an industry where exemption was granted under section 4A of the Act. Needless to say that every judgment is to be looked into by the court keeping in view the facts and circumstances of a particular case. The propositions of law laid down by the court based on different facts and statutory provisions cannot be applied in a case where they are not attracted being based on different facts and circumstances. In view of the above, we are of the view that it is fit case where alternative remedy should be by-passed and case be decided on merit keeping in view the arguments advanced by the learned counsel for the parties. It was submitted by the learned counsel for the petitioner that issuance of notice under section 15A(1)(qq) of the Act is per se illegal and without jurisdiction. The company can charge composite price over their products and merely because different units are situated in different States of the country and some of the units are charging trade tax, there cannot be any presumption against statutory provision. Where in a State, exemption has been granted, trade tax may be presumed to be charged because of composite price in spite of the fact that charging of trade tax is specifically denied with an indication in invoices. Under the Trade Tax Act power of exemption vested in the State Government has been provided under section 4A of the Act. Where in a State, exemption has been granted, trade tax may be presumed to be charged because of composite price in spite of the fact that charging of trade tax is specifically denied with an indication in invoices. Under the Trade Tax Act power of exemption vested in the State Government has been provided under section 4A of the Act. Section 4A of the Act provides that where the State Government is of the opinion that it is necessary so to do for increasing the production of any goods or for promoting the development of any industry in the State generally or in any districts or parts of the districts in particular, it may on application or otherwise, in any particular case or generally, by notification, declare that the turnover of sales in respect of such goods by the manufacturer thereof shall, during such period not exceeding fifteen years from such date on or after the date of starting production, exempt from the payment of trade tax. Section 4A further empowers the State Government that in case the industry which is exempted from payment of trade tax abuses the power then exemption so granted may be set aside. Section 8A of the Act deals with a situation where registered dealer abuses the process of law by charging trade tax with other name or title just to evade the payment of tax under the Act. In the present case, the provision contained in section 8A(2)(a) of the Act seems not attracted which provides that in case a dealer in respect of any sale or purchase made by or through him, realises from any person any amount by way of trade tax on sale or purchase of goods or any amount in lieu of trade tax on sale or purchase of goods by giving it a different name or colour, then such person may be dealt with for the evasion of tax. Power to impose penalty vests in section 15A(1) of the Act. In the present case section 15A(1)(qq) of the Act is not attracted which provides that where an assessee realises any amount as trade tax on sale of purchase of goods or any amount in lieu of such tax by giving it any different name or colour in contravention of a provisions of sub-section (2)(a) of section 8A of the Act, the assessee shall be liable for payment of penalty. The condition precedent as appears from section 15A(1)(qq) of the Act is that the dealer or person shall pay, by way of penalty, in addition to the tax, if any, payable by him in the manner provided by section 8A(2)(a) of the Act. Unless the provision contained in section 8A(2) is satisfied, prima facie no notice can be issued under section 15A(1)(qq) of the Act. The provision contained in section 2(i) of the Act defines the word "turnover" and section 2(ii) defines the word "turnover of purchases". The word turnover provides that the aggregate amount for which goods are supplied or distributed by way of sale or are sold by a dealer either directly or through another, on his account or on account of others, whether for cash or deferred payment or other valuable consideration. Explanation II(i) is also relevant which provides that the cost of installation or the amount realised as trade tax on sale or purchase or goods may be treated as trade tax when such cost or amount is separately charged. The amount for which goods are sold or purchased shall include the price of the packing material in which they are packed and any sums charged for anything done by the dealer in respect of the goods sold, at the time of or before the delivery thereof, other than cost of freight or delivery or cost of installation or the amount realized as trade tax on sale or purchase of goods when such cost or amount is separately charged. So the aggregate amount which the producers charge may include various items as defined under section 2(i) of the Act. Rule 4 of the U.P. Trade Tax Rules, 1948 defines the power of Commissioner of Trade Tax. According to rule 4 the Commissioner shall have jurisdiction over the whole of the State and shall exercise the powers conferred, and performed duties imposed, by or under the Act or these Rules. The Commissioner has got right to issue instructions regulating the procedure to be followed in carrying out the provisions of the Act and Rules. It further provides that the Commissioner shall have all powers exercisable by his subordinate authorities other than the appellate authorities under section 9. Subject to the general control of the Commissioner, the Additional Commissioner shall exercise all the powers vested in the Commissioner. It further provides that the Commissioner shall have all powers exercisable by his subordinate authorities other than the appellate authorities under section 9. Subject to the general control of the Commissioner, the Additional Commissioner shall exercise all the powers vested in the Commissioner. For convenience section 2(i), section 4A, section 8A(2)(a) and section 15A(1)(qq) are reproduced as under : "Section 2(i) - Amount charged - Whether would be part of turnover - Even if amount charged may include cost of freight or delivery, it would be part of the turnover [Modi Industries Ltd., Ghaziabad v. Commissioner of Sales Tax [2005] 26 NTN 314; [2005] UPTC 115; [2005] 50 STI 323 (All)] 'Commission or dalali' - Is it part of turnover - There is nothing in the assessment order to show that the commission had been realised for the services rendered by the third party and the said amount was paid to the third party. There is no dispute that the commission (dalali) has been realized by the dealer from its customers. It was held that the commission (dalali) is the part of the turnover. Thus, the view of the Tribunal is erroneous and is liable to be set aside. [Commissioner of Trade Tax, Lucknow v. Hanuman Trading Co., Varanasi [2005] STI 754 (All)]." Section 4A. Exemption from trade tax in certain cases. It was held that the commission (dalali) is the part of the turnover. Thus, the view of the Tribunal is erroneous and is liable to be set aside. [Commissioner of Trade Tax, Lucknow v. Hanuman Trading Co., Varanasi [2005] STI 754 (All)]." Section 4A. Exemption from trade tax in certain cases. - (1) Notwithstanding anything in any other provisions except the provisions of section 3H of this Act, where the State Government is of the opinion that it is necessary so to do for increasing the production of any goods or for promoting the development of any industry in the State generally or in any district or parts of the district in particular, it may on application or otherwise, in any particular case or generally, by notification, declare that the turnover of sales in respect of such goods by the manufacturer thereof shall, during such period not exceeding fifteen years from such date on or after the date of starting production as may be specified by the State Government in such notification, which may be the date of the notification or a date prior or subsequent to the date of such notification and where no date is so specified from the date of first sale by such manufacturer, if such sale takes place within six months from the date of starting production, and in any other case from the date following the expiration of six months from the date of starting production, and subject to such conditions as may be specified, be exempt from trade tax on sale of goods whether wholly or partly or be liable to tax at such reduced rate as it may fix : Provided that in respect of goods manufactured in a new unit having a fixed capital investment of five crore rupees or more or in an existing unit which may make fixed capital investment of five crore rupees or more in expansion, diversification, modernisation and backward integration or in any one of them, within such period not exceeding five years as may be specified in the notification, the exemption from or reduction in the rate of tax may be granted. "Section 8A. Registration of dealers and realization of tax by dealers. - (1) ... (2)(a). "Section 8A. Registration of dealers and realization of tax by dealers. - (1) ... (2)(a). No person who is not a dealer registered under this Act, shall in respect of any sale or purchase made by or through him, realise from any person any amount by way of trade tax on sale or purchase of goods or any amount in lieu of trade tax on sale or purchase of goods by giving it a different name or colour; and no dealer registered under this Act, shall, in respect of any sale or purchase made by or through him, realize from any person, other than a person to whom goods are sold by him, any amount by way of trade tax on sale or purchase of goods or any amount in lieu of trade tax on sale or purchase of goods, by giving it a different name or colour." 15A. Penalties in certain cases. - (1) ... (qq) realises any amount as trade tax on sale or purchase of goods or any amount in lieu of such tax by giving it any different name or colour in contravention of the provisions of sub-section (2)(a) of section 8A; or (r) otherwise acts in contravention of the provisions of this Act or the Rules made thereunder - it may, after such inquiry, if any, as it may deem necessary, direct that such dealer or person shall pay, by way of penalty, in addition to the tax, if any, payable by him. ... (viii) in a case referred to in clause (qq), a sum not less than the amount of tax realized or as the case may be, realised in excess, but not more than three times the said amount; ... "Explanation. - The 'assessing authority' includes an officer not below the rank of a Trade Tax Officer Grade II, posted at the check-post or an officer authorised to exercise powers under section 13 or section 13A, or both, as the case may be." The provision contained in rule 4 of the Rules is wide enough to cover the interpretation of Act, Rules and Regulation as well as the question cropped up because of action or inaction of the subordinate authorities, the Commissioner can give finding over the question or dispute so referred. For convenience, the aforesaid statutory provision of rule 4 is reproduced as under : "Rule 4. For convenience, the aforesaid statutory provision of rule 4 is reproduced as under : "Rule 4. Trade tax authorities and their powers. - (1) The Commissioner shall have jurisdiction over the whole of the State and shall exercise the powers conferred, and perform the duties imposed, by or under the Act or these Rules. (2) Consistent with the provisions of the Act and these Rules, the Commissioner may issue instructions generally regulating the procedure to be followed in carrying out the provisions of the Act or these Rules. (3) The Commissioner shall have all the powers exercisable by his subordinate authorities other than the appellate authorities under section 9. (4) Subject to the general control of the Commissioner, the Additional or Joint Commissioner shall exercise all the powers vested in the Commissioner. (5) Subject to the general control of the Commissioner, the Joint Commissioner and Deputy Commissioners shall also exercise the powers conferred, and perform the duties imposed, by or under the Act or these Rules or as may, consistent with the Act or these Rules, be conferred on or assigned to them." It is settled law that while interpreting the statutory provisions contained in an Act or statute, any one should not be read in isolation but it should be read in reference to context. According to Maxwell, a construction which would leave without effect any part of the language of a statute will normally be rejected. The honourable Supreme Court by catena of judgment held that while interpreting any section of a statute, every word and provision should be looked into in context to which it is used and not in isolation vide Grasim Industries Limited v. Collector of Customs [2002] 4 SCC 297, Easland Combines v. Collector of Central Excise [2003] 3 SCC 410, A. N. Roy v. Suresh Sham Singh [2006] 5 SCC 745 and Deewan Singh v. Rajendra Pd. Ardevi [2007] 10 SCC 528. The honourable Supreme Court while considering the principles regarding the construction of exemption provisions in Union of India v. Wood Papers Ltd. [1991] 83 STC 251 (SC); AIR 1991 SC 2049 held as under : "... Literally exemption is freedom from liability, tax or duty. Fiscally it may assume varying shapes, specially in a growing economy. For instance tax holiday to new units, concessional rate of tax to goods or persons for limited period or with the specific objective, etc. Literally exemption is freedom from liability, tax or duty. Fiscally it may assume varying shapes, specially in a growing economy. For instance tax holiday to new units, concessional rate of tax to goods or persons for limited period or with the specific objective, etc. That is why its construction, unlike charging provision, has to be tested on different touchstone. In fact an exemption provision is like an exception and on normal principle of construction or interpretation of statutes it is construed strictly either because of legislative intention or on economic justification of inequitable burden or progressive approach of fiscal provisions intended to augment State revenue. But once exception or exemption becomes applicable no rule or principle requires it to be construed strictly." In Collector of Central Excise, Bombay v. Park Exports (P.) Ltd. [1989] 75 STC 105; AIR 1989 SC 644 , the Supreme Court held that while interpreting the notification for exemption, courts should understood the language employed therein bearing in mind the context in which the expressions occur. Once a notification is issued in pursuance of power conferred by the Act, it has got statutory force. The relevant portion is reproduced as under : "... The expressions in the Schedule and in the notification for exemption should be understood by the language employed therein bearing in mind the context in which the expression occur. The words used in the provision, imposing taxes or granting exemption should be understood in the same way in which these are understood in ordinary parlance in the area in which the law is in force or by the people who ordinarily deal with them. ... The notification must be read as a whole in the context of the other relevant provisions. When a notification is issued in accordance with power conferred by the statute, it has statutory force and validity and, therefore, the exemption under the notification is, as if it were contained in the Act itself. ..." In Commissioner of Wealth Tax, A.P. v. Officer in-charge (Court of Wards), Paigah [1976] 105 ITR 133 (SC); [1977] AIR 1977 SC 113 , the honourable Supreme Court held that correct rule is that courts have to endeavour to find out the exact sense in which the words have been used in a particular context. ..." In Commissioner of Wealth Tax, A.P. v. Officer in-charge (Court of Wards), Paigah [1976] 105 ITR 133 (SC); [1977] AIR 1977 SC 113 , the honourable Supreme Court held that correct rule is that courts have to endeavour to find out the exact sense in which the words have been used in a particular context. They are entitled to look at the statute as a whole and give an interpretation in consonance with the purposes of the statute and what logically follows from the terms used. Apart from above, while reading the provision contained in section 15A(1)(qq) of the Act, the provision contained in section 15A(r)(viii) should also be looked into which provides that while imposing penalty after holding an inquiry, the defaulter/dealer or the person concerned shall pay, by way of penalty, in addition to the tax, if any, payable by him, a sum not less than the amount of tax realized or, as the case may be, realized in excess, but not more than three times of the said amount. In the present case, no steps have been taken by the respondents for cancellation of exemption in pursuance of power conferred by section 4A of the Act. Admittedly, as per averments, contained in the counter-affidavit, the respondents are not proceeding ahead to make assessment for the tax on account of exemption. Therefore, it appears that the opposite parties have acted on unfounded ground in violation of the various provisions, while issuing the impugned notice for imposition of penalty, having close eye over the finding of fact recorded by the Tribunal. In the Municipal law of England, the words "penal" and "penalty" have been used in various senses. Strictly and primarily they denote punishment imposed and enforced by the State for a crime or offence against its laws, they are also commonly used as including any extraordinary liability to which the law subjects a wrong-doer in favour of the person wronged, not limited to the damages suffered. In the Law Lexicon by P. Ramanatha Aiyer, the word "penal action", "penalty", "penalty and forfeiture" and "penalty and punishment" have been defined as under : "Penal action. A penal action is an action on a statute which gives a certain penalty to be recovered by any person who will sue for the same. A penal action is one allowed in pursuance of public justice under particular laws. A penal action is an action on a statute which gives a certain penalty to be recovered by any person who will sue for the same. A penal action is one allowed in pursuance of public justice under particular laws. An action for libel or slander is in the nature of a penal action. Penalty (in contract). Penalty is a liability composed as a punishment on the party committing the breach of contract. Agreement to pay at default interest at a higher rate does not amount to penalty. The word 'penalty' is intended to embody the English equitable doctrine with regard to liquidated damages and penalties. A 'penalty' in a contract, is generally taken to mean not a sum to be recovered eo nomine but, a provision for securing the due performance of the contract. A penalty may be defined to be an agreement to pay a greater sum to secure the payment of a less sum. A penalty is a sum stipulated to be paid in gross in the event of a breach of a contract, the articles of which covenant for the performance of several things, or where a large sum is agreed to be paid on the non-payment of a smaller sum, or the non-performance of a duty, the damages resulting from which may be ascertained with the reasonable certainty, and which is much less than the sum expressed. A penalty is a sum named as damages to be recovered for violating an agreement or promise, in lieu of damages. An agreement that, if the interest on a note is not paid when due, the whole note - principal and interest - shall become due and payable, is not in the nature of a penalty or forfeiture, and one against which equity, by reason thereof, will not enforce its terms. There are no penalties, no damages called for. Merely altering the day of payment is neither forfeiture of any property, nor penalty in damages for the breach of such agreement. 'Penalty' may sometimes connote agreed liquidated damages (Fletcher v. Dyche 2 TR 32). 'Penalty' (in Criminal Law) A penalty is a punishment inflicted by a law for its violation. A penalty is defined as a temporary punishment or sum of money imposed by statute, to be paid as a punishment for the commission of a certain offence. 'Penalty' may sometimes connote agreed liquidated damages (Fletcher v. Dyche 2 TR 32). 'Penalty' (in Criminal Law) A penalty is a punishment inflicted by a law for its violation. A penalty is defined as a temporary punishment or sum of money imposed by statute, to be paid as a punishment for the commission of a certain offence. A penalty is a punishment imposed by law or contract for doing or failing to do something that it was the duty of a party to do. A penalty is in the nature of a punishment for the non-performance of an act, or the performance of an unlawful act, and in the former case stands in lieu of the act to be performed. The words 'penal' and 'penalty' strictly and primarily denote punishment, whether corporal or pecuniary, imposed and enforced by the State for a crime or offence against its laws. The term 'penalty' is used very loosely in statutes in some cases, and might, without being much strained from its ordinary meaning, be held to embrace all the consequences visited by law on the heads of those who violate police requirements. A punishment imposed for any breach of law, rule or contract; a sum named in a bond as the amount to be forfeited by the obliger in case he does not comply with the conditions of the bond; money recoverable by virtue of a penal statute; a sum agreed to be paid on breach of an agreement or some stipulation in it. 'Penalty' and 'fine' are not the same in law. A penalty is always recoverable in a civil action. A fine never is. A penalty, when recovered, goes to the party suing; a fine, to the State. A fine is defined in law to be a pecuniary punishment imposed by a lawful tribunal upon a person convicted of a crime or misdemeanor. This definition is wholly inapplicable to a judgment in a civil suit. The expression 'penalty' is a word of wide significance. Sometimes, it means recovery of an amount as a penal measure even in civil proceedings. An exaction which is not compensatory in character is also termed as a 'penalty'. When penalty is imposed by an adjudicating officer, it is done so in 'adjudicatory proceedings' and not by way of fine as a results of 'prosecution' of an 'accused' for commission of an 'offence' in a criminal court. An exaction which is not compensatory in character is also termed as a 'penalty'. When penalty is imposed by an adjudicating officer, it is done so in 'adjudicatory proceedings' and not by way of fine as a results of 'prosecution' of an 'accused' for commission of an 'offence' in a criminal court. Director of Enforcement v. MCTM Corpn. Pvt. Ltd. AIR 1996 SC 1100 , 1104 [Foreign Exchange Regulation Act (7 of 1947), S. 23(1)(a)] Penalty and forfeiture. The noun 'penalty' is defined 'forfeiture' or a sum to be forfeited for non-compliance with an agreement; a fine, (Worcester's Dictionary). These definitions show that in one sense, the words 'forfeit' and 'penalty' are substantially synonymous. Penalty and punishment : 'Penalty' is synonymous with 'punishment', in connection with crimes and is fixed by the law defining the criminal Act." Thus, even keeping in view the dictionary meaning of the word "penalty", it shall be incumbent upon the authorities to establish that the petitioner has violated some statutory provisions, agreement, contracts or terms and conditions of the licence or exemption certificate while fixing the price of the blended tea bags produced from other industries situated outside the State. It has been not brought into the notice of this court that as to under what manner and how the petitioner had violated the statutory provisions under the Act or Rules framed therein and in consequence thereto, it is liable to pay fine in pursuance to the provisions contained in section 15A(1)(qq) of the Act. In view of the settled prepositions of law while interpreting the provision contained in section 15A(1)(qq) or section 8A(2)(a) or other provisions referred hereinabove, they should not be read in isolation but the entire Act should be taken into consideration in view of the law settled by the honourable Supreme Court. In the present case the statutory provision referred by the parties counsel does not seem to suffer from any ambiguity or requires any external aid. Accordingly, they should be given natural meaning. A plain reading of section 15A(1)(qq) of the Act at the face of record shows that for issuance of notice for the purpose of imposition of penalty prima facie it must be proved that the trade tax has been evaded by giving different name or colour in contravention of provision given in section 8A of the Act. A plain reading of section 15A(1)(qq) of the Act at the face of record shows that for issuance of notice for the purpose of imposition of penalty prima facie it must be proved that the trade tax has been evaded by giving different name or colour in contravention of provision given in section 8A of the Act. Section 8A(2)(a) of the Act specifically provides that the evasion of trade tax must be done in such a manner which amount to give it different name or colour. There appears to be no evidence on record which may indicate that the petitioner was charging trade tax or sales tax, which was not quoted on the tea bags. A presumption has been drawn by the respondents only on account of the fact that the prices quoted over the tea bags produced at the Etah factory as well as Chennai and Kolkata were same. The Legislature to their wisdom has used the words "different name or colour". It means, there must be some material which may indicate that the assessee is charging trade tax with different name and colour. There appears to be no material on record which may indicate that the trade tax is charged indirectly like, tax for charity purpose, gift or with different name or colour to meet out the contingent liability then in such condition, it cannot be inferred that the assessee is charging trade tax with different name and colour. There appears no material on record which may indicate that the petitioner has been charging trade tax with different name and colour. The only ground raised by the respondents' counsel is that the price quoted over the tea bags produced from Etah industry is same as that of tea bags produced in other industries situated outside the State of U.P. We feel that the company which has got branches in more than one State has to maintain the equality of rates of its product, produced from industry situated in more than one State. Accordingly, we are of the view that while issuing notice under section 15A(1)(qq) of the Act, no material has been found by the respondents to record the finding of fact that the petitioner has been charging trade tax with different name and colour. While interpreting the provision contained in section 15A(1)(qq) of the Act, the provision contained in section 8A(2)(a) of the Act cannot be excluded. While interpreting the provision contained in section 15A(1)(qq) of the Act, the provision contained in section 8A(2)(a) of the Act cannot be excluded. Both the provisions should be read simultaneously to assess the jurisdiction of the taxing authority for issuance of notice under section 15A(1)(qq) of the Act. In the present case, it is also not disputed that on the invoice of the produce of Etah industry, a specific indication has been made by the petitioner providing that sales tax is not being charged. It is not disputed by the respondents and neither it has been indicated in the counter-affidavit that in the invoice with regard to goods of Etah branch, the petitioner has not indicated that trade tax is not chargeable. The invoices filed in the writ petition specifically shows that the petitioner categorically put its seal which indicates that in view of the exemption granted under section 4A of the Act, the trade tax is not being charged. Neither any material on record nor any pleading has been made which may indicate that the petitioner has been charging trade tax with different name and colour. Accordingly notice issued under section 15A(1)(qq) of the Act seems to be an act of abuse of process of law. Their Lordships of the honourable Supreme Court in the case of Calcutta Discount Co. [1961] 41 ITR 191, while interpreting the words "reason to believe" observed that for existence of reasons for that belief, the belief must be held in good faith and it cannot be merely a pretence. The expression does not mean a purely subjective satisfaction of the Income-tax Officer; the form of decision as to the existence of reasons and the belief is not in the mind of the Income-tax Officer. If it be asserted that the Income-tax Officer had reason to believe that income had been underassessed by reason of failure to disclose fully and truly the facts material for assessment, the existence of the belief and the reasons for the belief, but not the sufficiency of the reasons, will be justifiable. The relevant portion from the case of Calcutta Discount Co. [1961] 41 ITR 191 (SC) is reproduced as under : "... The expression 'reason to believe' postulates belief and the existence of reasons for that belief. The belief must be held in good faith : it cannot be merely a pretence. The relevant portion from the case of Calcutta Discount Co. [1961] 41 ITR 191 (SC) is reproduced as under : "... The expression 'reason to believe' postulates belief and the existence of reasons for that belief. The belief must be held in good faith : it cannot be merely a pretence. The expression does not mean a purely subjective satisfaction of the Income-tax Officer : the forum of decision as to the existence of reasons and the belief is not in the mind of the Income-tax Officer. If it be asserted that the Income-tax Officer had reason to believe that income had been under-assessed by reason of failure to disclose fully and truly the facts material for assessment, the existence of the belief and the reasons for the belief, but not the sufficiency of the reasons, will be justiciable. The expression therefore predicates that the Income-tax Officer holds the belief induced by the existence of reasons for holding such belief. It contemplates existence of reasons on which the belief is founded, and not merely a belief in the existence of reasons inducing the belief; in other words, the Income-tax Officer must on information at his disposal believe that income has been under-assessed by reason of failure fully and truly to disclose all material facts necessary for assessment. Such a belief, be it said, may not be based on mere suspicion : it must be founded upon information." In view of the above, for exercising power under section 15A(1)(qq) of the Act, the authorities must record a satisfaction and there must be some material on record which may fulfil the condition provided by section 8A(2)(a) of the Act. In the absence of sufficient material fulfilling the condition required by section 8A(2)(a) of the Act, it shall not be open for the authorities to issue notice under section 15A(1)(qq) of the Act. The next question cropped up for adjudication with regard to composite price is when the eligibility certificate issued and enforced, whether the assessing authority has got right to proceed with the matter. The learned Additional Chief Standing Counsel on the basis of pleading in the counter-affidavit has made a statement that Department has not taken any initiative to proceed with the assessment or add quantum of assessment. The learned Additional Chief Standing Counsel on the basis of pleading in the counter-affidavit has made a statement that Department has not taken any initiative to proceed with the assessment or add quantum of assessment. Though the learned Additional Chief Standing Counsel on the basis of pleading in the counter-affidavit submits that in view of exemption granted under section 4A of the Act, no assessment proceeding has been initiated, but in view of the argument advanced by the petitioner's counsel that penalty is the part and parcel of the assessment proceedings, we are deciding the issue in brief. A Division Bench of this court in the case of Maxims Delicacies (Private) Limited [1988] UPTC 100 had observed that during the continuance of a certificate under section 4A of the U.P. Trade Tax Act, it is not competent for the Tax Officer to make any assessment as far as the unit in whose favour the certificate has been granted. The relevant portion from the judgment of the Maxims Delicacies (Private) Limited [1988] UPTC 100 is reproduced as under : "This court is committed to the view that during the currency of a certificate issued under section 4A of the U.P. Sales Tax Act, it is not competent for the Sales Tax Officer to make any assessment, as far as the unit in whose favour this certificate has been granted, is concerned. It is common ground that the aforesaid certificate dated December 12, 1983 has not yet been modified or cancelled by the respondents. If that be so, it is clear that the respondents are not entitled to take any proceedings for assessing the petitioner to tax either under the U.P. or the Central Sales Tax Act, in terms of the certificate dated December 12, 1983. Since the second respondent initiated proceedings by issuance of notices to the petitioner, he is liable to be restrained from making assessment for such time that the certificate in favour of the petitioner is valid. We direct accordingly. We also quash the various notices issued to the petitioner for assessment to tax in the meanwhile. The petition shall stand disposed of finally in these terms. We direct accordingly. We also quash the various notices issued to the petitioner for assessment to tax in the meanwhile. The petition shall stand disposed of finally in these terms. Costs on parties." The aforesaid proposition of law has been followed by other judgments of this court as well as other High Courts from time to time, which has been referred by the petitioner's counsel by various pronouncement which includes the case of Kumar Fuels [1986] 63 STC 467 (All); [1986] UPTC 357, Dilip Industries [1987] UPTC 412 (All), Assistant Secretary, Board of Revenue [2003] 131 STC 467 (Ker), Anil Kumar Ramesh Chandra Glass Works [2000] 119 STC 305 (All), Pan Tyres [1997] 105 STC 111 (All), Wipro Infotech Limited [2000] 117 STC 244 (Karn), Commissioner of Sales Tax v. Madhya Bharat Papers Ltd. [1996] 103 STC 142 (MP) and Maurya Timbers [1997] 104 STC 243 (P&H). However, it would be appropriate to reproduce the observation of the honourable Supreme Court in the case of Delhi Cloth and General Mills Co. Ltd. v. Commissioner of Sales Tax [1971] 28 STC 331. The relevant portion is reproduced as under : "... But that provision does not give any statutory power to collect sales tax as such from any class of buyers. There is no other provision in the Act which confers such a power on the dealers. Unless the price of an article is controlled, it is always open to the buyer and the seller to agree upon the price to be payable. While doing so it is open to the dealer to include in the price the tax payable by him to the Government. If he does so, he cannot be said to be collecting the tax payable by him from his buyers. The levy and collection of tax is regulated by law and not by contract. So long as there is no law empowering the dealer to collect tax from his buyer or seller, there is no legal basis for saying that the dealer is entitled to collect the tax payable by him from his buyer or seller. The levy and collection of tax is regulated by law and not by contract. So long as there is no law empowering the dealer to collect tax from his buyer or seller, there is no legal basis for saying that the dealer is entitled to collect the tax payable by him from his buyer or seller. Whatever collection that may be made by the dealer from his customers the same can only be considered as valuable consideration for the goods sold." In view of the settled proposition of law, there appears to be no ambiguity to record a finding that because of exemption granted by the State Government, the respondents should not have proceeded to initiate action in pursuance of impugned notice. There is one more reason which is liable to be considered. The Division Bench of this court while allowing the writ petition had directed the Commissioner of Trade Tax to decide the controversy in pursuance of power conferred by rule 4 of the Rules in question. The learned Commissioner seems to have not given due weight to the judgment of this court; rather escaped from his responsibility to decide the petitioner's representation keeping in view the letter and spirit of the judgment. It was incumbent upon the Commissioner to decide the controversy keeping in view the material facts and circumstances on record as well as Tribunal's judgment. Once the Tribunal had recorded a finding that the petitioner is not liable to pay any penalty and the judgment and order of the Tribunal has not been challenged by the State authorities, then the Commissioner should have applied his/her mind while deciding the petitioner's representation keeping in view the Tribunal's judgment as well as the facts and circumstances and material on record. The jurisdiction conferred on the Commissioner under rule 4 of the Rules is wide enough and it was not incumbent upon the Commissioner to relegate it to assessing authority more so when he was exercising power not only under rule 4 of the Rules but also in pursuance of the judgment of this court. The Commissioner should have conscious that it was obligatory on his part to decide the controversy by interpreting the power conferred by sections 8A(2)(a) and 15A(1)(qq) of the Act, which seems to have not done. The Commissioner should have conscious that it was obligatory on his part to decide the controversy by interpreting the power conferred by sections 8A(2)(a) and 15A(1)(qq) of the Act, which seems to have not done. On account of finality of Tribunal's judgment also it was not open to the respondents to restrict their decision for issuance of notice under section 15A(1)(qq) of the Act. The other question relates to the composite price. The reason for issuance of impugned notice as argued by the Additional Chief Standing Counsel is that the price mentioned over the tea bags produced at the Etah branch as well as other branches of the petitioner - company like Kolkata, Chennai and Karnataka is same. Needless to say that uniformity in price of the same product is a necessary condition for a public limited company even if the industries are situated in various parts of the country. The procedure to grant exemption under section 4A of the Act is beneficial provision and is an incentive to the industrialist to establish their industries in the backward areas of the State so that people of the locality may be benefited in various ways like employment, etc. Once the Government exempt the payment of trade tax under section 4A of the Act, which is an incentive given to the industrialists then it is not open for the Government to take initiative only on the ground that the prices of the product is same produced by various units situate in various parts of the country. Whether the sales tax is paid in other State or not, is not a concern for the State Government. The Government is concerned only with the action or inaction of the industries in its own State. The Government have to see only whether the conduct of the petitioner or other industries is proper or not, keeping in view the statutory provision. Presumption cannot be drawn from the facts which are not concerned with the industries situated in the State of U.P. The petitioner is charging composite price of the blended tea produced from the industry situate at Etah. Section 4A of the Act permits the State Government to exempt trade tax on the turnover of sales in respect of goods manufactured by industrialists during specified period. Section 2(i) of the Act defines the word "turnover". Section 4A of the Act permits the State Government to exempt trade tax on the turnover of sales in respect of goods manufactured by industrialists during specified period. Section 2(i) of the Act defines the word "turnover". Turnover means the aggregate amount for which the goods are supplied or distributed by way of sale. The Explanation of section 2(i) further clarified the position with regard to word turnover and provides that the amount for which the goods are sold or purchased shall include the price of packing material in which they are packed and the sums charged for anything done by the dealer in respect of the goods sold at the time of or before the delivery thereof other than cost of freight or delivery or cost of installation or trade tax realized thereon. The exclusion clause of Explanation II specifically provides that the aggregate amount for which the goods are supplied or distributed by way of sale shall not include the cost of freight or delivery or cost of installation or the amount realized as trade tax on sale or purchase of goods when such cost or amount is separately charged. The Explanation indicates that the amount realized as trade tax on sale or purchase of goods when separately charged shall not deem to be included in the aggregate amount for which goods are supplied or distributed. In the present case once the exemption has been granted by the State under section 4A of the Act, there appears to be no occasion to raise a presumption that the aggregate price printed over the tea bags or invoices shall include trade tax. Moreover, once the invoices specifically reveal that trade tax has not been charged, then there is no occasion for the State to raise a presumption with regard to inclusion of trade tax in the aggregate price in the absence of any material on record. In the case of Bhaidas Cursondas & Co. [1975] 35 STC 459, the Karnataka High Court has held that in order to establish that an assessee has collected sales tax, two facts must be established, viz., (1) that the buyer had agreed to pay the sales tax in addition to the price; and (2) that the seller's account books should disclose the said amount separately. We are agreed with the proposition laid down by the Karnataka High Court. We are agreed with the proposition laid down by the Karnataka High Court. In the case of Bata India Limited [1983] 53 STC 132, the Bombay High Court again reiterated the aforesaid principle and held that the dealer is authorised to pass on to his purchaser the tax which he is liable to pay to the Government but that should be done by raising of separate agreement expressed or implied with the purchaser that in addition to the price he will also pay to the dealer the amount of tax which has become liable to pay to the Government. However, it is optional for the dealer to collect or not to collect the amount of tax. In case a dealer fixes his sale price by taking into account the amount of tax which he would have to pay by charging a lump sum price and not showing separately the amount collected by way of tax, such lump sum price would be the price of the goods because it would be impossible to determine whether or not the dealer had taken into account the amount of tax which he would have to pay. A Division Bench of the Karnataka High Court in the case of Sri Neelakanteshwar Oil Industries [1995] 98 STC 303 had reiterated the aforesaid proposition of law with regard to composite price and held that an interpretation which makes the exemption illusory and has the effect of giving by one hand and taking away by the other should be avoided. In the case of Hindustan Lever Limited [2007] 10 VST 330, a Division Bench of the Karnataka High Court held that inclusion in the price, the tax payable by the dealer to the Government could not be said to be collection of tax payable by him from the buyers. In view of the above, whatever the collection made by the dealer unless specified in the book or relevant document, can only be considered as a valuable consideration for the goods sold. A composite price fixed by the dealer or the industrialist for its goods like in the present case of the blended tea bags cannot be treated as an act of evasion of trade tax in violation of the statutory provisions. A composite price fixed by the dealer or the industrialist for its goods like in the present case of the blended tea bags cannot be treated as an act of evasion of trade tax in violation of the statutory provisions. It was permissible for the petitioner to display the composite price over the tea bags or in the invoices indicating therein that no trade tax has been charged. The purpose of section 4A of the Act is to give full freedom to the industrialists from the liability of tax or duty. It is an incentive or promotional steps taken by the State to encourage the industrialists to establish their industries in the backward area of the State without payment of sales tax for a limited period. That is why the provision with regard to exemption is tested on different touchstone. Government is not concerned with the fact that because of non-payment of trade tax, the industrialist is getting more profit than what he is earning in other States because of payment of sales tax like in the present case the petitioner pays sales tax for the products of other units situated outside the State of U.P. Merely because the price indicated in the invoice of the product is same in spite of non-payment of trade tax in the State of U.P. and because of payment of tax for the goods in question produced from other States shall not make out a case to take action for imposition of penalty under section 15A(1)(qq) of the Act. On account of exemption from trade tax, it is natural that the industrialists may earn more profit for their goods produced from exempted area than the one where no exemption has been granted but that is not a relevant ground for the State or its authorities to take action in the manner taken in the present case. Needless to say that cost of the goods are assessed by the industrialists or producers keeping in view the various factors like cost of construction of building, salary payable to workmen, cost of raw material, cost of transportation, cost of management and so many other things. Accordingly as held by the honourable Supreme Court in the case of Delhi Cloth and General Mills Co. Accordingly as held by the honourable Supreme Court in the case of Delhi Cloth and General Mills Co. Ltd. [1971] 28 STC 331 if there is no some statutory provision regulating the production, cost or price of the goods for sales and purchase, it shall not be lawful for the Government to interfere under the garb of section 15A(1)(qq) read with section 8A(2) of the Act. In view of the above, the writ petition deserves to be allowed. Accordingly, the writ petition is allowed. A writ in the nature of certiorari is issued quashing the impugned order dated December 29, 1993, contained in annexure No. 12 to the writ petition, passed by the Commissioner of Sales Tax, U.P., Lucknow, as well as notices issued in pursuance of the provision contained in section 15A(1)(qq) of the Act for the assessment years 1989-90 to 1992-93 and respondents are restrained from imposing penalty in pursuance of the proceeding in question. No order as to costs.