JUDGMENT I. MAHANTY, J. — M/s. Seetal Automobile, the petitioner herein has sought to challenge the jurisdiction of the opposite party-Sales Tax Officer, Bhubaneswar-II Circle in issuing notice for levy of penalty under Section 9-B (3)(a)(ii) of the Orissa Sales Tax Act, 1947 (in short, the ‘OST Act’) for the periods 2000-01, 2001-02 and 2002-03 in these three writ applications respectively. Since the challenge in these writ applications are to similar notices for the aforesaid periods and the grounds raised are also same, these writ applications are taken up to¬gether for disposal through a common judgment. 2. Sri Paikray, learned counsel appearing for the peti¬tioner submitted that the impugned notices under Annexure-4 are wholly without jurisdiction. He submitted that the impugned notices are for the purpose of levy of penalty on the allegation of non-deposit of excess tax and surcharge under the O.S.T. Act allegedly collected by the petitioner-farm, which is strenuously denied by the petitioner. 3. The facts leading to the present writ applications are that the petitioner who is engaged in a business of selling two-wheelers, three-wheelers, spares and accessories, filed its re¬turns under the O.S.T. Act as well as the Orissa Entry Tax Act (in short, the ‘OET Act’) based upon its books of accounts which is claimed to be maintained truly and correctly in course of its business. The petitioner had purchased two-wheelers, three-wheel¬ers as well as spares and accessories from outside the State of Orissa and the petitioner paid the Entry Tax @ 12% since the items in question were “scheduled goods’ mentioned in Part-III of the Schedule appended to the OET Act. 4. Learned counsel for the petitioner submitted that the leviability of the Entry Tax was made in accordance with Section 3(3) of the OET Act. He submitted that the petitioner is entitled to the benefit of reduction of the tax liability in consonance with Section 4 of the OET Act and since the petitioner had paid Entry Tax at the point of entry of the vehicles into the State of Orissa, in terms of Section 4(1) of the Entry Tax Act, the Sales Tax liability of the petitioner under the OST Act, stood reduced to the extent of tax paid under the Entry Tax Act. Such reduction of liability is prescribed under Sub-Section (2) of Section 4 of the OET Act and the only pre-condition for allowing such reduc¬tion of OST Act was that Entry Tax paid and tax payable under the Sales Tax Act was required to be shown separately in the cash memo or bill or invoice. Learned counsel also placed reliance on Rule-3 of the OET Rules to establish that, goods brought into the State for the purpose of sale by the petitioner was exigible entry tax @ 12% (which was the same as notified by the Government under the OST Act for such goods). Learned counsel further placed reliance on Rule-18 of the OET Rules which provide for “set off of entry tax against sales tax”. The same along with the statuto¬ry illustration therein are extracted hereunder : “Rule-18- Set off of Entry Tax against Sales Tax : (1) When the importer of a motor vehicle liable to pay tax under Sub-section (2) of Section 3 of this Act being a dealer in motor vehicles becomes liable to pay tax under the Sales Tax Act by virtue of sale of such motor vehicle, his tax liability under the Sales Tax Act shall be reduced to the extent of the tax paid under these rules. Illustration :- Assuming Entry Tax Rate and Sales Tax Rate to be 10% (1) Purchase value of Motor vehicle Rs. 2,00,000/- (2) Entry tax payable @ 10% Rs. 20,000/- Total : Rs. 2,20,000/- (3) Sales Price of the Motor Vehicle Rs. 2,20,000/- (4) (a) Sales Tax due @ 10% Rs. 22,000/- Deducted Entry Tax Paid Rs. 20,000/- Sales Tax payable Rs. 2,000/- Total : Rs. 2,00,000/- (2) Entry tax payable @ 10% Rs. 20,000/- Total : Rs. 2,20,000/- (3) Sales Price of the Motor Vehicle Rs. 2,20,000/- (4) (a) Sales Tax due @ 10% Rs. 22,000/- Deducted Entry Tax Paid Rs. 20,000/- Sales Tax payable Rs. 2,000/- Total : Rs. 2,22,000/- (2) When an importer of goods specified in Part-III of the Schedule to the Act other than motor vehicle, liable to pay tax under this Act is also a dealer liable to pay tax under the Sales Tax Act, the sale tax payable on the sale of goods shall be reduced to the extent of entry tax paid in the same manner as illustrated under the sub-rule (1)” The details of the total inter-state purchase, purchase of the vehicles, vehicles-spares and accessories and payment of entry tax for the three relevant years are quoted hereunder : 2000-01 Rs.16,46,74,262.89 Rs.11,59,30,588.66 Rs.26,59,579.38 Rs.1,39,11,670.30 2001-02 Rs.12,43,44,878.73 Rs.12,22,15,344.81 Rs.21,29,533.92 Rs.1,46,65,842.05 2002-03 Rs.14,08,69,092.35 Rs.13,84,04,053.21 Rs.24,65,039.14 Rs.1,66,08,488.00 Learned counsel further submitted that it computed its sales tax liability and submitted returns pertaining to the gross sale of the vehicles in the following manner : 2000-01 Rs.12,87,35,376.73 Rs.1,54,48,245.09 Rs.1,39,14,908.00 Rs.15,33,334.00 2001-02 Rs.13,09,16,495.06 Rs.1,57,09,977.64 Rs.1,46,68,267.00 Rs.10,41,712.00 2002-03 Rs.15,04,86,067.07 Rs.1,80,58,328.00 Rs.1,66,08,488.00 Rs.14,49,840.00 It is also stated by the learned counsel for the petitioner that the surcharge payable under Section 5-A of the O.S.T. Act on the sales tax payable after setting off entry tax paid was also computed and deposited by the petitioner. 5. In the circumstances narrated hereinabove, penalty under Section 9-B (3)(a)(ii) of the O.S.T. Act has been sought to be levied, on the purported ground that the petitioner had col¬lected excess amount of O.S.T. and surcharge amounting to Rs.1,39,14,908.00. On this surmise penalty of three times of the aforesaid amount on the alleged so-called excess collection of O.S.T. and surcharge amounting to Rs.4,17,44,098.29 has been sought to be levied for the year 2000-01, Rs.4,39,97,529.00 for the year 2001-02 and Rs.4,98,25,464.00 for the year 2002-03 which is the subject matter of challenge in the present batch of writ applications. 6. Sri Paikray, learned counsel appearing for the petitioner submitted that, the notice for levy of penalty was wholly without any lawful jurisdiction and has been issued with¬out taking into consideration, the mandate of Sections-3 and 4 of the O.E.T. Act and Rule 18 thereunder. 6. Sri Paikray, learned counsel appearing for the petitioner submitted that, the notice for levy of penalty was wholly without any lawful jurisdiction and has been issued with¬out taking into consideration, the mandate of Sections-3 and 4 of the O.E.T. Act and Rule 18 thereunder. It is submitted that, since the petitioner had paid Entry Tax at the time of purchase of the vehicles from outside the State of Orissa and bringing the same into the State of Orissa, as required under Section 4(3)(2) of the OET Act, it was within its competence to claim for set¬ting off of such Entry Tax against such Sales Tax liability as stipulated under Section 4 of the OET Act read with Sections 4 and 5 of the O.S.T. Act and Rule 18 of the Rules. 7. Relying upon a judgment of the Orissa High Court in the case of M/s. LG Electronics (India) Ltd. v. State of Orissa and others, 103 (2007) CLT 358 and in particular, on the interpreta¬tion, given by this Court of Rule 18 of the OET Rules as well as Sections 4, 5 and 5-A of the OST Act with Section 4 of the OET Rules, it came to conclude that the term “tax payable”, as con¬templated under Section 5-A of the OST Act, means “tax payable after set off of Entry Tax from the Sales Tax assessed” on a dealer. 8. In the counter affidavit, the stand of the Revenue is that the foundation for invocation of power under Section 9-B of the OST Act, does not depend upon the actual payment of sales tax, but on excess collection/realization of amount of tax, than that is liable to be paid by the registered dealer-petitioner. This ground is baseless and of no legal consequence, since Sec¬tion 4 of the OET Act read with Rule 18 thereof, categorically permits “set off”. The statutory illustration appended thereto, also clearly indicates that a dealer is required to collect Sales Tax on the total price of the motor vehicle (inclusive of the Entry Tax payable) and once the amount of sales tax due is com¬puted thereon, it is only then that “set off can be claimed” and balance Sales Tax becomes payable. Such a statutory illustration clearly negates the very stand taken by the Revenue. Such a statutory illustration clearly negates the very stand taken by the Revenue. A dealer of the motor vehicle is statutorily required to collect Sales Tax on the total value of the motor vehicle at the time of its sale by the petitioner (inclusive of Entry Tax) and after such collec¬tion, the tax due from the petitioner is required to be computed after adjusting therefrom the amount of entry tax paid by the petitioner at the time of entry of the vehicles. This aspect as noted hereinabove, has already been settled by this Court in the case of M/s. L.G. Electronics (India) Ltd. (supra) and therefore, is no longer res integra. 9. On the basis of the facts and submissions made by the learned counsel appearing for the respective parties, the only issue involved in this case is clearly covered by the judgment of this Court in the case of M/s. L.G. Electronics (India) Ltd. (supra). Apart from the above, it would be relevant at this point to take note of Section 3 and 4 of the Orissa Entry Tax Act as well as Rule 18 of the OET Rules which has been noted hereinabove. “Sec.3 Levy of tax.- (1) There shall be levied and collected a tax on entry of the scheduled goods into a local area for consumption, use or sale therein at such rate not exceeding twelve percentum of the purchase value of such goods from such date as may be specified by the State Government and different dates and different rates may be specified for different goods and local areas subject to such conditions as may be prescribed. Provided that the State Government may direct that in such circumstances and under such conditions and for such period as may be prescribed, a dealer shall pay in lieu of tax payable under this Act a sum fixed in the prescribed manner, and in such a case the tax shall be deemed to have been compounded.] (2) The tax leviable under this Act shall be paid by every dealer in scheduled goods or any other person who brings or causes to be brought into a local area such scheduled goods whether on his own account or on account of his principal or customer or takes delivery or is entitled to take delivery of such goods on such entry : Provided that no tax shall be levied under this Act on the entry of scheduled goods into a local area, if it is proved to the satisfaction of the assessing authority that such goods have already been subjected to entry tax or that the entry tax has been paid by any other person or dealer under this Act. Explanation.- Where the goods are taken delivery of on their entry into a local area or brought into the local area by a person other than a dealer, the dealer who takes delivery of the goods from such person or makes carriage of the goods shall be deemed to have brought or caused to have brought the good into the local area. (3) Notwithstanding anything contained in sub-sections (1) and (2), but subject to the provisions of this Act, there shall be levied and collected a tax on the entry of any motor vehicle into any local area for use or sale therein which is liable for registration in the State of Orissa under the Motor Vehicles Act, 1988 (59 of 1988), and rate of tax shall be at such rate or rates as may be specified by the State Government by notification on the purchase value of such motor vehicles. Explanation.- For the removal of doubts, it is hereby declared that where any scheduled goods have been subjected to the levy of octroi under the Orissa Municipal Act, 1950 (Orissa Act 23 of 1950), prior to the commencement of this Act for entry into any local area, those goods shall not be subjected to the levy of entry tax under this act for their entry into that area on or after such commencement.] Sec.4 Reduction in tax liability - (1) Where an importer of motor vehicles liable to pay tax under Sub-section (3) of Section 3 being a Dealer in motor vehi¬cle become liable to pay tax under the Sales Tax Act by virtue of sale of such motor vehicles then his liability under the Sales Tax Act shall be reduced to the extent of tax paid under this Act. Explanation - For the purpose of this Sub-section the chassis and the vehicle with body build on the chassis shall be treated as one and the same goods. (2) When an importer or manufacturer of good specified in Part-III of the Schedule except motor vehicles pays tax under Sub-section (1) of Section 3 or Section 26 of this Act, being a Dealer under the Sales Tax Act becomes liable to pay tax under the said Act by virtue of sale of such goods then his liability under the Sales Tax Act shall be reduced to the extent of tax paid under this Act.” It is absolutely clear from the aforesaid provisions that, while the petitioner-dealer who was an importer of motor vehicles into the State of Orissa, it was liable to pay Entry Tax, under Sub-section (2) of Section 3 of the OET Act. The Legislature has provided a “statutory illustration”, under Rule-18, which clearly stipulates the manner in which liability for Sales Tax and set off of Entry Tax paid has been clearly laid down. In the light of the illustration made in the said Rules, it is clear that while the petitioner (dealer in motor vehicles) was liable to pay Entry Tax at the time of entry of the vehicle into the State of Orissa (and in fact, have paid the same), it has also been authorized to collect Sales Tax at the time of sale of the vehicle to its purchaser (to be computed on the basis of both the value of the vehicle + Entry Tax). The illustration further stipulates that on collection of the sales tax in the manner statutorily required, the dealer was entitled to seek “set off of the amount of the Entry Tax” paid by him at the time of entry/purchase of the vehicle and was required to deposit only the balance Sales Tax payable. 10. In the present case, the petitioner has been assessed under the OET Act (Annexure-2) which the petitioner has admitted¬ly deposited. It is this amount of Entry Tax paid that was claimed by the dealer for set off against the sales tax dues and has been allowed in course of assessment. Therefore, the peti¬tioner has acted clearly in consonance with his lawful obligation both for collection and deposit of Sales Tax and the allegation that the petitioner had collected excess OST and surcharge over and above his liability under the Sales Tax Act, is already preposterous. The OET Act itself permits “set off of Entry Tax against the Sales Tax dues’ and such set off can only be made possible after the petitioner collects the OST from its purchas¬ers and not at any time prior thereto. 11. Therefore, we are of the considered view that the Sales Tax Officer’s notice for levy of penalty is wholly unfounded both on facts as well as law and is, therefore, without jurisdiction. We, accordingly hold that the petitioner was justified in claim¬ing set off of Entry Tax paid by him (at the time of purchase) from the tax payable under the OST Act and such claim of set off cannot form a lawful basis for issue of a notice for levy of penalty under Section 9-B (3)(a)(ii) of the OST Act, 1947. On such finding and observations, the writ applications are allowed. The notices of show cause impugned under Annexure-4 of the writ applications are quashed, but in the circumstances, there shall be no cost. B.P. DAS, J. I agree. Application allowed.