- (1.) These are three references under Section 11(1) read with Section 11(3) of the U.P. Sales Tax Act submitted by the Additional Revising Authority, Sales Tax, Gorakhpur, at the instance of the assessee. The question submitted for the decision of the court is : Whether, on the facts and in the circumstances of the case, the Additional Revising Authority, Gorakhpur Range, Gorakhpur, was justified in holding the turnover of cotton sewing thread on cops and cones taxable and not exempt under Notification No. ST-911/X dated 31st March, 1956
(2.) The assessee deals in cotton sewing thread. In respect of the assessment years 1959-60 and 1960-61 the assessee claimed that the sales made by it in respect of "cotton sewing thread on cops and cones" was not liable to sales tax as it came within the meaning of the words "cotton yarn on cops and cones", which was totally exempt from sales tax. The Sales Tax Officer rejected this contention. The appellate authority, however, held that cotton sewing thread on cops and cones partook the nature of "cotton yarn on cops and cones" and was not liable to tax, The revising authority, however, set aside the order of the appellate authority and upheld the order of the Sales Tax Officer. Thereupon an application was made for a reference to this court and ultimately by its order dated 15th December, 1972, the above-mentioned question has been referred to this court. Identical questions arise in all the three references and they are being dealt with together.
(3.) In the notification issued by the State Government ST-911/X dated 31st March, 1956, "cotton yarn on cops and cones" was made exempt from sales tax. It is contended that "cotton sewing thread on cops and cones" came within the meaning of the words "cotton yarn on cops and cones" and is, therefore, not liable to any sales tax. In the years to which the assessment relates there was no separate entry either levying tax or exempting from tax the item "cotton sewing thread on cops and cones". In a notification issued on 1st October, 1961 [ST-927/X-902(ii) 1958], it was stated that the turnover in respect of cotton sewing thread would not be liable to tax except at the point of sale to the consumer. The Hindi version of the above notification used the words "silai ke sooti dhage" as the equivalent of cotton sewing thread.;