Deepak Gupta, J.

Petitioner No. 1 is a unit of M/s Shankar Trading Company, a body corporate registered under the Indian Companies Act, 1956. The company is involved in manufacturing and sale of katha which is a notified agriculture produce under the H.P. Agriculture Produce Market Act, 1969. (hereinafter referred to as the Act).

2. It is not disputed that the petitioner being a unit of Shankar Trading Company was required to be registered as a licensee under the said Act and this matter stands settled by the judgment of the Apex Court in Himachal Pradesh Marketing Board versus Shankar Trading Company, 1997 (2) SCC 496.

3. The following issues arise in this case:

1. Whether the stock transfers from the unit of company at Oel in District Una to it's Head office at Delhi or other branches amounts to sale within the meaning of the Act?

2. Whether Rule 80 (7) of the Rules is ultra vires of the Act and even if it is intra vires, whether it should be read down?

3. Whether Katha and khairwood are the same thing and therefore khairwood shall also be treated to be a notified agricultural produce?

4. Whether the Act envisages the imposition of penalty and there could be a rule imposi