- (1.) Upon the material available, there is no reason to doubt that the cotton belting that the assessee manufactures falls within the scope of Section 14 (ii) (a) of the central Sales Tax Act, as it read at the relevant time. That entry, in turn, refers to item 19 of the First Schedule to the central Excise and Salt Act, whereunder "cotton fabrics" mean " all varieties of fabrics manufactured either wholly or partly from cotton. . . ". The civil appeal of the Sales Tax authorities must, therefore, be dismissed.
(2.) This brings us to the appeal filed by the assessee. Reference is made to section 3-AA of the Uttar Pradesh Sales tax Act, 1948 which states that the turnover in respect of goods declared under section 14 of the central Sales Tax Act to be of special importance in inter-State trade or commerce shall not be liable to tax except at a single point of sale notified by the State government and the rate of tax shall be such, not exceeding the maximum rate for the time being specified in Section 15 of the central Act, as the State government may, by notification in the Gazette, declare. It is contended on behalf of the assessee that there is no notification issued by the State government that fixes either the single point of the sale or the rate of tax in accordance with Section 3-AA. Reference is then made to the judgment of this court in Govind Saran Ganga Saran vs. Commissioner of Sales Tax and Ors. (60 STC 1) and the observation with regard to Section 14 of the central Act therein to the effect that if either of the two conditions, i. e. , the condition regarding the point of sale and the condition regarding the rate of tax, are not fixed by the State government, tax cannot be levied. Learned counsel for the State government is unable to tell us whether there is or is not such notification.
(3.) The High court had decided as far back as in 1994 that the cotton belting made by the assessee was covered by section 14 of the central Act. Since then, and certainly after the assessee filed the special leave petition in this court in 1996, this aspect was, or ought to have been, before the Sales Tax authorities. If there is no answer in this regard to date, it must be presumed that there is no such notification. Consequently, no tax can be levied and the order under appeal to the extent that it states that the turnover of the assessee's cotton belting is taxable at the rate of four percent must set aside.;