GULATI, J. - (1.) THIS is a reference under section 11(1) of the U.P. Sales Tax Act.
(2.) THE assessee is a dealer in kirana goods. It was assessed to tax under the U.P. Sales Tax Act on an estimated turnover of Rs. 16,00,000.00 for the assessment year 1966-67. One of the commodities, the turnover of which is included in the assessed turnover, is coconuts. The assessee claimed that coconuts are "oil-seeds" and under section 3-AA its turnover is liable to tax at the rate of 2 per cent. The Sales Tax Officer and the Assistant Commissioner (Judicial), on appeal, have held that coconuts are dry fruits and its turnover is assessable at the rate of 3 per cent. The Judge (Revisions) has agreed with the contention of the assessee and has held that coconuts are "oil-seeds". The Commissioner of Sales Tax is aggrieved and at his instance the Judge (Revisions), Sales Tax, Lucknow, has made this reference on the following question : "Whether on the facts and circumstances of the case, coconut is an oil-seed or a dry fruit ?" The distinction between oil-seeds and dry fruits is relevant only for purposes of section 3-AA of the Act. Section 3-AA has a special significance inasmuch as it has been enacted to give effect to article 286(3) of the Constitution. That article, after its amendment in 1956, provided : "Any law of a State shall, in so far as it imposes, or authorises the imposition of, a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter-State trade or commerce, be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify."
(3.) IN pursuance of this directive, the Parliament enacted the Central Sales Tax Act (74 of 1956), which by section 14 specified the commodities which were of special importance in inter-State trade or commerce and by section 15 imposed conditions that such commodities shall not be taxed at more than one stage and the rate of tax shall not exceed 2 per cent. of the sale price. On account of these restrictions, the U.P. Sales Tax Act was amended by the addition of section 3-AA with retrospective effect from 1st April, 1956. This provision sets out certain commodities as have been mentioned section 14 of the Central Sales Tax Act and provides that such goods shall not be liable to tax except at the point of sale by a dealer to the consumer and the rate of tax shall be such, not exceeding the maximum rate for the time being specified in section 15 of the Central Sales Tax Act, as may be declared by the State Government by notification in the official Gazette. Section 3-AA mentions altogether seven commodities enumerated in clauses (i) to (vi) of sub-section (1). Clause (vi) relates to "oil-seeds" and reads : "Oil-seeds, that is to say, seeds yielding non-volatile oils used for human consumption or in industry, or in the manufacture of varnishes, soaps and the like, or in lubrication and volatile oils used chiefly in medicines, perfumes, cosmetics and the like." ;