PATHAK, J. - (1.) THE petitioner deals in carbon-paper, typewriter ribbons, stapler machines and stapler pins. These goods are sent from the head office at Bombay to the branch office at Kanpur and from there sold in the State of Uttar Pradesh.
(2.) FOR the assessment year 1966-67, assessment proceedings were taken by the Sales Tax Officer and by his order dated 22nd July, 1969, he assessed the turnover of carbon-paper for the period 1st April, 1966 to 30th June, 1966, as liable to tax at two per cent. under section 3 of the U.P. Sales Tax Act and that for the period 1st July, 1966 to 31st March, 1967, at the rate of six per cent. with reference to the entry "paper other than hand-made paper" in Notification No. ST-3124/X-1012(4)-1964 dated 1st July, 1966. By the same order he also assessed the turnover of typewriter ribbons at the rate of ten per cent. with reference to the entry "typewriters, duplicating machines, calculating machines and tabulating machines and parts thereof" in Notification No. ST-1738/X-1012-1963 dated 1st June, 1963. A notice of demand has been issued to the petitioner requiring it to pay the tax assessed. Aggrieved by the assessment order and the notice of demand, the petitioner has filed this petition under article 226 of the Constitution. The case of the petitioner is that carbon-paper is not paper at all and should be assessed as an unclassified commodity under section 3 at the rate of two per cent. As regards ribbons, it is disputed that they can be treated as a part of typewriters, and it is urged, they constitute an accessory merely. We have heard learned counsel for the parties and we are of opinion that the petitioner is right on both points. As regards carbon-paper, the process of preparation has been set out in the petition and is not disputed by the Sales Tax Officer. It is pointed out that tissue paper is taken and a paste coated thereon with a thermosetting ink based mainly on wax, non-drying oils, pigments and dyes.
(3.) THE ink is made to a liquid consistency and applied on the tissue from a suitable coating roller, the excess of ink being scraped off by means of a suitable equalising rod. The paper is then passed through different chilled rolls, whereby the ink sets on the paper. The finished product thus obtained is called carbon-paper. There can be no dispute that carbon-paper is not used for writing thereon, for packing or for any of the purposes to which paper is ordinarily put. It is an article primarily used for making an impression on paper so that a number of copies of writing or typing can be obtained by a single impression. The important element involved in the use of carbon-paper is not the paper itself but the chemical medium with which it is coated. As a result of the coating, pressure applied to the surface of the carbon-paper produces a corresponding impression on the paper below it. What is of significance is the chemical coating. The paper on which the coating is spread is of secondary importance, inasmuch as it constitutes merely a convenient base for the coating. When carbon-paper is sold, it is not sold as tissue paper but as a material whose value and significance lies entirely in the chemical coating spread thereon. In the ordinary sense "paper" refers generally to the material used from writing, printing or wrapping. Carbon-paper, in our opinion, cannot be considered in that sense. A circular (No. 13 of 1965) dated 20th September, 1965, was issued by the Commissioner of Sales Tax, Uttar Pradesh, setting out a list of different kinds of paper. It enumerates 78 kinds of paper but does not include carbon-paper;