Disguised trade tax collection requires proof of actual realization; a composite price alone cannot sustain penalty proceedings.

Section 15A(1)(qq) of the U.P. Trade Tax Act applies only where there is material showing realization of trade tax, or an amount in lieu of tax, by giving it a different name or colour under section 8A(2)(a). A composite sale price, even for goods produced at exempt and non-exempt units, does not by itself establish disguised tax collection, particularly where invoices state that trade tax is not charged and no contrary material exists. Alternative remedy is not an absolute bar to writ relief when the notice is without jurisdiction. The impugned notices and penalty proceedings were therefore quashed.

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Issues: (i) Whether notices under section 15A(1)(qq) of the U.P. Trade Tax Act, 1948 could be issued where the assessee enjoyed exemption under section 4A and there was no material showing realization of trade tax by giving it a different name or colour under section 8A(2)(a); (ii) whether the impugned action was justified on the basis that the assessee maintained a composite price for goods manufactured at different units and whether the availability of an alternative statutory remedy justified refusal of writ relief.

Issue (i): Whether notices under section 15A(1)(qq) of the U.P. Trade Tax Act, 1948 could be issued where the assessee enjoyed exemption under section 4A and there was no material showing realization of trade tax by giving it a different name or colour under section 8A(2)(a).

Analysis: Section 15A(1)(qq) was held to be attracted only when the foundational requirement of section 8A(2)(a) was satisfied, namely, that the dealer had realized an amount as trade tax or in lieu of trade tax by giving it a different name or colour. The record did not disclose any material showing that the assessee had actually collected trade tax from buyers in any disguised form. The mere fact that the same composite price was charged for tea bags produced at different units, including exempt and non-exempt units, was treated as insufficient to infer indirect tax realization. Invoices expressly indicated that trade tax was not being charged, and the earlier finding of the Tribunal that no evidence supported the allegation of tax collection had attained finality.

Conclusion: The notice under section 15A(1)(qq) was without jurisdiction and could not be sustained; the finding was in favour of the assessee.

Issue (ii): Whether the impugned action was justified on the basis that the assessee maintained a composite price for goods manufactured at different units and whether the availability of an alternative statutory remedy justified refusal of writ relief.

Analysis: The Court held that a dealer may fix a composite sale price, and such price does not, by itself, prove that tax has been collected from buyers. Uniform pricing across units situated in different States was considered commercially normal and not a basis to presume evasion, especially where exemption under section 4A operated and no proceedings for cancellation of exemption had been taken. On the question of remedy, the Court reiterated that alternative remedy is only a rule of discretion, not an absolute bar, and that writ jurisdiction can be exercised where action is without jurisdiction or amounts to abuse of process. Since the impugned notices were founded on a misconstruction of the statutory scheme and ignored the binding Tribunal finding, writ intervention was justified.

Conclusion: The composite price could not be treated as realization of trade tax, and the writ petition was maintainable despite alternative remedies; the result was in favour of the assessee.

Final Conclusion: The impugned order and consequent penalty notices were quashed, and the authorities were restrained from proceeding with penalty on the alleged collection of trade tax in disguised form.

Ratio Decidendi: A penalty notice for alleged disguised collection of trade tax can be issued only when there is material showing realization of tax or an amount in lieu of tax by giving it a different name or colour; a composite price, without such material, does not establish statutory contravention or confer jurisdiction to proceed under the penalty provision.

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