R. M. Sahai, J. - A large number of petitions have been filed challenging the enhancement of tax on the purchase of sugar-cane by U.P. Sugar Cane Purchase Tax Act 1974. They can be divided in two categories. The challenge in one bunch of petition is founded on Article 14. It has been alleged that the increase by the amending Act of 1974 in the case of an unit was 100 per cent whereas in the case of factories it was only by 50 percent. We do not propose to go into detail in this aspect as due to promulgation of Emergency we are precluded from considering the challenge on this score. The petitioners have also not pressed this point. We may further point out that by virtue of Art. 40 of 1975 the enhancement in the case of factories has also been made approximately to 100 percent. The first bunch of the petitions therefore fail.
2. The attack in the second bunch of petitions has been based on a footing that although the petitioner had exercised option to be assessed on the assumed quantity of purchase of sugarcane, yet, the unit of assessment for this purpose being a month the demand notice issued where the unit was closed voluntarily, due intimation of which was given as is contemplated in the rules, are illegal. It has further been urged that the enhancement in the average monthly assumed purchase of sugarcane by Notification No. 4378-A/XVIII(5)/1627-74 dated 19th August, 1974 is liable to be struck down as it is contrary to section 3 of the U.P. Sugarcane purchase Tax Act. Before proceeding to examine them these contentions it would be necessary to quote the relevant provision :
'Sec. 3 : IMPOSITION OF TAX -
(1) There shall be levied, and collected in such manner as may be prescribed a tax on the purchase of sugarcane by the owner of -
(a) a factory at the rate of (one rupee and twenty five paisa per quintal) of sugarcane; and
(b) a unit at the rate of (fifty paisa per quintal)
Provided that in the case of a unit, the tax shall be payable on the quantity of sugarcane actually purchased or, at the option of owner of the unit, on the quantity of sugarcane assumed, in accordance with the provisions of sub-section (1-a) to have been purchased by him)
(1-a) The State Government may prescribe the quantity of sugarcane which shall be assumed for the purpose of the proviso to sub-section (1), to have been purchased by the owners of different categories of units having regard to the crushing capacity of the units and other relevant factors.'
'Rule 13-A. PAYMENT OF TAX BY OWNER EXERCISING OPTION, -................................................................................................
(2) Where the owner of a unit exercises the option, the quantity of sugarcane on the purchase of which he shall be liable to pay the tax shall be assumed on monthly basis according to specification laid down in Schedule I :
Provided firstly that in the first month of the working of the unit in any assessment year the quantity of sugarcane for the purpose of payment of tax shall be assumed from the date specified in declaration made under sub-rule. (1) or changed under the first or the second proviso to that sub-rule, as the case may be :
Provided secondly that in the last month of the working of the unit in any assessment year the quantity of sugarcane for the purpose of payment of tax shall be assumed up to the date which is intimated by the owner of a unit under sub-rule (1-A) :
Provided thirdly that where the owner of a unit is found to have started the working of the unit before the date specified or changed under sub-rule (1) the quantity of sugarcane for the purpose of payment of tax shall be assumed for the whole of such month :
Provided fourthly that where after the expiry of the period for which the tax is last paid a unit is found to be working the quantity of sugarcane for the purpose of payment of tax shall be assumed up to the date on which the unit is found to be so working.
Explanation I :- The quantity of sugarcane for the purpose of payment of tax, for a part of any month shall be proportionately assumed according to the tax specifications laid down in schedule I.
Explanation II :- For the purposes of payment of tax in respect of a unit the owner of which exercises option a month shall be deemed to be of thirty days.'
3. The purposes as indicated by the preamble of the Act is to impose tax on purchase of sugarcane. To achieve this purpose section 3 creates a charge and proviso lays down the two methods of payment i.e., on actual purchase or assumed quantity. The Legislature has delegated its function of laying down the assumed quantity for purpose of payment. It has provided the guide line in the section itself as it has put correlation with the crushing capacity of the unit and other relevant factors. This was fixed by the State Government in 1961 and a Schedule was appended to the rules framed under the Act. This Schedule was substituted in 1974 and the assumed quantity of the crusher was enhanced. It has been stated in the counter affidavit on behalf of the State Government that as there is no restriction on the hours for which the crusher can operate and also due to improvement in mechanism. It was considered feasible by the State Government to enhance the crushing capacity. The argument that enchancement in assumed quantity is confiscatory and unreasonable cannot be considered as it pertains in the realm of Article 14 and 19 of the Constitution of India. It has been urged that Schedule as substituted in 1974 is beyond the scope of section 3 (1)(a) as it has not taken into account crushing capacity and further the enhancement is arbitrary. The petitioners have not furnished any reliable data regarding the crushing capacity. No affidavit or evidence of any expert has been placed on the record which may establish the crushing capacity of different crushers of different sizes. The basis principle of public finance is no doubt ability to pay. But no foundation has been laid in the petition except vague suggestion that the petitioner shall have to pay huge amount as purchase tax. Parting with large amount as tax may be harsh but that is not arbitrariness. Moreover the amendments in the Schedule and the Act were made before the start of crushing season 1974-75. It was open to the petitioner to get their tax quantified in accordance with the first part of the proviso read with rule 12 but once they opted with open eyes for being assessed on assumed basis it hardly lies in their mouth to raise the plea of arbitrariness.
4. Proviso to section 3 lays down the basis of payment of purchase tax on sugarcane. Rules 12 and 13 require an owner of the unit to maintain accounts and pay before 7th day of every month. We are however concerned in these petitions with rule 13-A which deals in detail with the procedure of payment of tax by owner of units exercising option. Rule 13-A(1) of the Rules deals with the exercise of option in Form 13. Rule 1A requires the owner to give intimation regarding start of the crusher. Rule 2 prescribes the quantity of sugarcane for the purchase of which the owner shall be liable to pay tax. This rule has four provisos. Each of them deal with different situation. The first proviso deals with the manner of calculation of tax in the month the crusher is started. The second deals with the last month i.e. when the unit is closed. The third is where the assessee acts in breach of sub-rule (1) and the fourth where the assessee continues to operate the crusher even after intimation that he has closed the unit. There are two Explanations appended to these provisos. It has been vehemently urged for the petitioner that the phrase decides to close the working of the unit used in rule 1A means closure not only at the end of season but also intermittent closures. For instance if the unit has started crushing in October and an intimation is sent in November that the unit has been closed for a month then the petitioner is not liable for this month even though the crusher has worked in December and subsequent months. The phrase closure of unit is used in rule 1A. Rule 2 of rule 13-A deals with calculation of tax for a month or part of the month and in varying situation. The second proviso read with rule 1A to rule 13-A indicates that the point of time when the calculation of tax for the last month shall come to an end shall depend on the day of the intimation sent by the owner as contemplated in rule 1A. Last month mentioned in second proviso is dependant on the intimation by the owner of an unit in sub-rule (1)(a). One may close the unit in any month of the season. The calculation of tax for every month in the season which starts from intimation of start of an unit comes to an end only with an intimation as contemplated in rule 1A. Neither the Act nor the rules envisages remission or exemption for intermittent closures. It may be harsh and inequitable but there is no scope for equity in a taxing statute where the provision are unambiguous. Even otherwise if the submission of the petitioner is accepted that there is no liability for intermittent closure it shall put at naught the entire scheme of the Act. If an assessee wants to escape for the period the crusher had not worked he had choice to get itself assessed on the basis of actual crushing but one cannot have it both ways. One cannot derive the benefit of paying tax on assumed quantity with liberty to crush any amount of sugarcane and also to have scope for escaping liability by giving notice of stoppage of crusher before final closure. The argument based on the use of the word in month in Explanation of sub-rule (2) of rule 13-A also does not impress us. The purpose of explanation is to explain what is contained in the rule and its provisos and not to add something to it. This contention also is in our opinion devoid of any merit.
5. The result is that petitions fail and are dismissed. In the circumstances of the case there shall be no order as to costs. The stay orders shall stand discharged.