- (1.) In these petitions under Article 226 of the Constitution, the common question that arises for determination, is the rate at which aluminium wares are subject to sales tax under the U.P. Sales Tax Act, 1948 (hereinafter called the Act).
(2.) The petitioners are dealers in aluminium wares. Their case is that the rate at which sales tax is leviable on aluminium wares is only 31/2 per cent, whereas the sales tax authorities have been demanding from them sales tax at 7 per cent on aluminium wares. On behalf of the Sales Tax authorities the learned Standing Counsel contended that sales tax is leviable on aluminium wares at 7 per cent.
(3.) In order to appreciate the rival contention of the parties, it is necessary to set out the relevant provisions of the Act, the course of amendments thereof and the relevant notifications under the Act. The relevant portions of S. 3 of the Act, as it stood on 5-4-1961, read as follows :- 3. Liability of tax under the Act : (1) Subject to the provisions of this Act, every dealer shall, for each assessment year, pay a tax at the rate of two naya paise per rupee on his turnover of such year, which shall be determined in such manner as may be prescribed. Provided ........ Provided also that the State Government may, by notification in the Official Gazette, enhance the rate of tax on the turnover in respect of any goods or class of goods, so, however, that the rate does not exceed three naya paise per rupee, and may, likewise, reduce it and the tax shall thereupon be payable on the relative turnover at the enhanced or reduced rate as may be applicable. Provided ............. Explanation ............. Under the second proviso to sub-S. (1) of S. 3 of the Act, the Government issued Notification No. ST-1367/X-1045 (19)-1960 date 5-4-1961. That Notification stated, inter alia, that the rate of tax on aluminium wares would be 3 per cent instead of the general rate of tax at 2 per cent.;