GULATI, J. - (1.) IN compliance with this court's order dated 6th January, 1970, passed under section 11(4) of the U.P. Sales Tax Act, the Additional Judge (Revisions) Sales Tax, Gorakhpur, has submitted this statement of the case and has referred for the decision of this court the following two questions of law : "(1) Whether the Notification No. S.T. 2934/X-902(7)-56 dated 1st August, 1958, was a valid notification to begin with and in case it was not whether it has been validated by Act No. 15 of 1964 ? (2) In either case, what would be the proper rate of tax on yarn for the year 1958-59 ?"
(2.) IT may be stated here that in question No. (1) reference to Act No. 15 of 1964 appears to be a clerical mistake. It has been admitted by the learned counsel of the two sides that it was Act No. 14 of 1964 to which the reference was meant. Hence we shall modify question No. (1) so as to read Act No. 14 in place of Act No. 15 of 1964. The assessee is a dealer in cotton yarn. The assessment year in dispute is 1958-59. The assessee's books of accounts were not accepted and a best judgment assessment was made of the turnover of cotton yarn. The rate of tax on the turnover of cotton yarn was 6 pies per rupee up to 31st July, 1958, and it was 2 per cent. with effect from 1st August, 1958, as per Notification No. S.T. 2934/X-902(7)-56 dated 1st August, 1958. The revising authority to whom the matter went up in revision finally fixed the turnover and the rate of tax in the following manner : 1. Imported cotton yarn sold Rs. 5,500 taxable at 6 pies up to 31st July, 1958. per rupee. 2. Cotton yarn sold to the Rs. 6,94,500 taxable at consumers from 1st August, 2 per cent. 1958, to 31st March, 1959.
(3.) THE notification of 1st August, 1958, quoted above, purports to have been issued under section 3-AA of the Act. In Ram Niwas Sant Lal v. Sales Tax Officer ([1964] 15 S.T.C. 523), this court held that section 3-AA as it stood at the material time did not authorise the State Government to fix the rate of tax in respect of the turnover of the commodities enumerated in that section including cotton yarn. This led to the passing of Act No. 14 of 1964. Section 3 of that Act purports to validate the previous notifications issued under section 3-AA as also all actions taken and orders passed in pursuance of these notifications. Section 3 of the Amending Act reads as follows : "3. Validation of certain notifications and actions taken in pursuance thereof. - Any notification declaring the rate of tax issued before the commencement of this Act purporting to be under section 3-AA of the principal Act shall be deemed to have been issued under that section as amended by this Act, and notwithstanding any judgment, decree or order of any court - (a) any such notification shall be deemed always to have been valid, and (b) anything done or any action taken including any order made, proceeding taken, direction issued, jurisdiction exercised, assessment made and tax levied or collected, purporting to have been done or taken in pursuance of any such notification shall be deemed to have been validly and lawfully done or taken." ;