Pathak, J. - (1.) This appeal by special leave is directed against the judgment and order of the High Court of Delhi dismissing the appellant's writ petition questioning the liability imposed on him in a sales tax assessment.
(2.) The appellant carries on business as a dealer in the re-sale of cotton yarn. As a dealer he has been registered under the Bengal Finance (Sales Tax) Act, 1941 as applied to the Union Territory of Delhi (hereinafter referred to as the 'State Act'). The appellant says that he purchases cotton yarn and sells it to registered dealers, unregistered dealers and consumers. For the assessment year 1968-69 the appellant submitted his return of turnover under the State Act and claimed exemption in respect of the turnover of sales of cotton thread on the ground that it was an exempted item under Entry No. 21 of the Second Schedule. The Sales Tax Officer, by his order dated October 29, 1970, held that the sales were effected in respect of cotton yarn and, therefore they were liable to tax at one per cent. On appeal, the Assistant Commissioner of Sales Tax took a contrary view and on his finding that the transactions were in respect of cotton thread he allowed the appeal and struck the assessment down. Acting suo motu in the exercise of his revisional jurisdiction, the Deputy Commissioner of Sales Tax made an order under sub-s. (3) of S. 20 of the State Act reversing the order of the Assistant Commissioner and restoring that of the Sales Tax Officer on the ground that what was sold was cotton yarn. The appellant now applied in revision to the Financial Commissioner, Delhi Administration, and the Financial Commissioner, proceeding on the basis that the sales were in respect of cotton yarn, which was a declared item under S. 14 of the Central Sales Tax Act, held that they could not be subjected to sales tax because one of the conditions prescribed by S. 15 of that Act had not been complied with, that is to say, the law had omitted to prescribe the single point at which the levy could alone be imposed. Accordingly, the Financial Commissioner allowed the revision petition and quashed the assessment. The Commissioner of Sales Tax thereupon filed Civil Writ Petn. No. 460 of 1973 in the High Court of Delhi praying for the quashing of the order of the Financial Commissioner. The writ petition was allowed by the High Court by its judgment and order dated. September 10, 1974. Against that judgment and order, the appellant has filed the present appeal.
(3.) S. 14 of the Central Sales Tax Act enumerates the commodities declared to be goods of special importance in inter-State trade or commerce. Among the goods so declared is cotton yarn. S. 15 of the Central Sales Tax Act, 1956 provides:- "15. Every Sales tax law of a State shall, in so far as it imposes or authorises the imposition of a tax on the sale or, purchase of declared goods, be subject to the following restrictions and conditions, namely:- (a) the tax payable under that law in respect of any sale or purchase of such goods inside the State shall not exceed three per cent of the sale or purchase price thereof, and such tax shall not be levied at more than one stage.";