JUDGMENT R. M. Sahai, J. - The following question has been referred for the opinion of this court.
"Whether on the facts and in the circumstances of the case the turnover of yarn in dispute was taxable under Notification No. 2934/X902 dated 1-8-1958 ?"
The assessee a dealer in Moradabad was holding stocks of yarn on 1-8-1958. Admittedly yarn was taxable at single point before 1-8-58. It was taxable either in the hands of importers or the manufactures. The State Government issued a Notification on 1st August 1958 as a result of which the turnover in respect of cotton yarn became taxable at the point of sale by the dealer to consumer. The Judge Revision has recorded a finding that the stock of cotton yarn which was with the assessee was sold by it to the consumer. He was of the view that it was taxable and the Notification dated 1-8-58 did not alter the position as rights had accrued to the assessee prior to the issue of the Notification. He drew support for his view from the decision given by the Additional Judge Revision Meerut in Revision No. 850 of 1963. M/s. Harsaran Das & Sons, Moradabad. Mr. V. D. Singh appearing for the Department has brought to our notice that the case of Harsaran Das came up before this court and was decided by a Division Bench on 2nd January 1969. We have gone through the judgment in Sales Tax Reference No. 539 of 1966, Commissioner of Sales Tax, U.P. vs. M/s. Harsaran Das & Sons Moradabad and we find that it was held by a Division Bench that cotton yarn held by the assessee in stock on 1-8-58 was liable to tax on the point of sale by a dealer to the consumer by virtue of the Notification No. 2934/X-902 (T) dated at August 1958. There was some doubt created in our mind whether the stock of cotton yarn held by the assessee on 1-8-58 in the case of Harsaran Das had suffered the tax in the hands of manufacturer or importer or not. We sent for the Paper Book. After looking into it we are satisfied that in that case also the cotton had suffered tax at the hands of the importer and manufacturer. The facts in both the cases were more or less identical. We agree with the reasoning given by the Division Bench in S.T.R. 539/1966 that cotton became taxable under section 3-AA from 1-8-58 as a fresh charge has been created by section 3-AA and the point on which the tax is leviable is different from section 3-!. In the circumstances we answer the question referred to us in the affirmative in favour of the Department and against the assessee by saying that the turnover of yarn was taxable under Notification No. 2934/X-902 dated 1-8-58. There shall however, be no order as to costs.