GULATI, J. - (1.) THE Additional Revising Authority (Sales Tax), Varanasi, has submitted this reference under section 11(3) of the U.P. Sales Tax Act for the opinion of this court on the following question of law : "Kiya steel bom lohe ki bani vastu (hardware) hai ya nahin ?"
(2.) THE firm of M/s. Aftab Husain Imdad Husain of Varanasi is the assessee. It manufactures and sells steel trunks. Prior to the assessment year 1962-63 the turnover of steel trunks used to be assessed under section 3 of the Act at the rate specified therein which at the material time was 2 per cent. For the assessment years 1962-63 and 1963-64 the rate of tax was enhanced to 3 per cent. on the view that steel trunks fall within the definition of "hardware" which was commodity assessable at a higher rate. The assessee appealed and the Judge (Appeals) accepted its contention that steel trunks were not an item of hardware. The Commissioner of Sales tax went up in revision, but the revising authority also upheld the order of the Judge (Appeals). At the instance of the Commissioner of Sales Tax the revising authority has now submitted this and the connected reference. Before we proceed to answer the question we would like to make a few observations about the statement of the case and the question of law submitted by the revising authority. The statement of the case under section 11 must contain all material facts of the case as found by the sales tax authorities and/or admitted between the parties. The revising authority should also indicate the statutory provisions with reference to which the case was decided by the sales tax authorities and which are relevant for the proper determination of the question submitted to the High Court for its opinion. The revising authority is not required to express its own opinion on the question of law apart from what might have been stated in the revisional order. In the instant case we find that the statement of the case is unsatisfactory. The material facts have not been incorporated in the statement of the case nor have the relevant statutory provisions been indicated. The revising authority has, in the statement of the case, incorporated its opinion on the question of law, and that opinion happens to be contrary to the one expressed by the Judge (Revisions), who decided the revision petitions. The question of law has also not been properly framed. The question of law should have reference to the facts of the case and should not be in an abstract form. In the instant case the proper question should have been as to whether on the facts of the case the steel trunks manufactured and sold by the assessee were an item of hardware within the meaning of the at term in the relevant notification and not as to whether steel trunks in general could be regarded as hardware or not.
(3.) WE would have been justified in returning this reference unanswered but since the question of law involved is of a recurring nature and is of general public importance, we have thought it fit to gather the material facts from the various orders of the sales tax authorities, to reframe the question and to answer it after ascertaining the relevant statutory provisions. Section 3 of the U.P. Sales Tax Act is the charging section under which turnover of all commodities is taxed at the rate specified therein. The rate of tax at the material time was 2 per cent. Under a proviso to section 3 the State Government has been invested with the power to enhance the rate of tax on the turnover of any goods or class of goods subject to a maximum of 3 per cent. It appears that in the exercise of this power the State Government issued the Notification No. ST-1367/X-1045(19)-1960 dated 5th April, 1961,providing that with effect for 5th April, 1961, the rate of tax in respect of the turnover of goods mentioned therein would be 3 paise per rupee instead of 2 paise per rupee at all points of sale. Item No. 7 of that notification is "mill-stores and hardware." It is on the basis of this notification that the rate of tax on the turnover of steel trunks was enhanced from 2 to 3 per cent. The question that falls for determination is as to whether the term "hardware" as appearing in the notification comprehends steel trunks.;