JUDGMENT R. M. Sahai, J. - The assessees turnover of glass-sheets was assessed at 7% under section 3A of U.P. Sales Tax Act (as it stood before amendment) treating it as glass-ware. The appeal and revision were dismissed. An application under section 11(1) was filed and apart from the question that has been called under section 11(4) the assessee wanted to refer one question which is quoted below :
"Whether in view of above facts and evidence placed before him the learned Revising Authority was justified in holding that the glass sheets are semi finished or finished goods fall in the category of glass wares."
The applications was dismissed and it was observed :
"I think having regard to clear observation made in the case of our own High Court noted above glass sheets could not be considered a raw material but being salable as such fell in the category of finished goods and were liable to tax as glass wares. The law is clear on the point and hence I do not think in respect of the rate of taxability of glass-sheets any law point was involved making reference to High Court desirable."
The assessee thereafter moved this court under section 11(4) and reiterated the same question. The application was allowed and the Additional Judge Revision was directed to draw a statement of case on only one question namely, "whether in the facts and circumstances of the present case the glass-sheets sold by the assessee would be taxable as glassware under section 3A of the U.P. Sales Tax Act as an unclassified item."
2. We have heard Sri K. M. L. Hajela for assessee and Sri V. K. Mehrotra Standing Counsel for the Department. An attempt has been made to challenge the finding of fact recorded by the Additional Judge (Revisions) that glass-sheet sold by the assessee is not raw material but "was rather a finished product salable to consumers." It has been urged that this question was only an aspect of the question that has been called by this Court and therefore three was no bar in considering the evidence adduced by the assessee to establish that glass-sheet was not understood as a glass-ware in the popular sense. He has placed reliance on Commissioner of Income-Tax, Bombay vs. Scindia Steam Nav. Co. Ltd. (42 I.T.R. 589) and Commissioner of Income-Tax of Bihar and Orissa vs. S. P. Jain (87 I.T.R. 370). On the other hand Sir Mehrotra has relied on Karnani Properties Ltd. vs. Commissioner of Income-Tax, Bengal (82 I.T.R. 547) and Commissioner of Income-tax, West Bengal vs. Smt. Ansuiya Devi (A.I.R. 1968 S.C. 779). The controversy in Commissioner of Income-Tax vs. Scindia Steam Nav. Co. Ltd. (Supra) was whether an amount of Rs. 9,26,532/-, the difference between the cost price and the written down value was liable to be included in the total income of the company for the year of assessment 1946-47. The question referred by the Tribunal was "whether the sum of Rs. 9,26,532/- was properly included in the assessee Companys income computed for the assessment year 1946-47 ? "When the reference came up for hearing in the High Court a new argument based on Section 10(2) (vii) of the Income Tax Act was raised. The objection raised on behalf of the Department that this contention could not be raised for the first time was over-ruled. The question in the circumstances that arose was whether the High Court was justified in permitting the Company to raise the question of law for the first time in the High Court. The Supreme Court after reviewing a number of authorities laid down certain principles and summed up by saying that it is only a question that has been raised before or decided by the Tribunal that could be held to arise out of its order. After laying down these principles it went on to tress that so far as the applicability of section 10 was concerned, it was only an aspect of the wider question referred by the Tribunal and therefore the High Court did not commit any error in deciding it. The decision does not anywhere lay down that a finding of fact recorded by the Tribunal can be challenged, or it can be urged that it can be considered by the High Court as an aspect of a question which has been referred for its decision. It is well established that a finding recorded by a Tribunal can be challenged only on the ground that it is based on a mis-reading of evidence or that it is perverse or that it is based on irrelevant or inadmissible evidence. But this is quite different from saying that such a question is inherent in the question of law which has been referred for the decision in this case. The question as referred clearly envisages that the findings as recorded by the Tribunal are correct and the only question that remains to be decided by this Court is whether on the findings the glass-sheets were taxable as unclassified item or were covered by the entry glassware. The other decision reported in Commissioner of Income Tax of Bihar and Orissa vs. S. P. Jain (supra) also does not, in our opinion, help the assessee. The facts in that case were that the assessee moved an application in High Court for calling three questions. The High Court, however, called only questions nos. 2 and 3. At the time of the final hearing the question arose whether the findings recorded by the Tribunal could be assailed or not. The High Court took the view that as this question was not called it could not in its advisory jurisdiction go beyond the question referred to it. The Supreme Court, however, took the view that question no. 1 was covered by questions nos. 2 and 3. It was in these circumstances that it permitted the Department to challenge the findings of fact recorded by the Tribunal. The question referred in this case does not in any manner postulate a challenge on the findings of fact recorded by the Judge (Revision). The decision more in point is the one relied on behalf of the Department reported in Karnani Properties Ltd. vs. The Commissioner of Income Tax, Bengal (Supra). It has been held by the Supreme Court that in absence of a question whether the findings were vitiated for any reason, being before the High Court, it has no jurisdiction to go behind or question the statements of fact made by the Tribunal. Similar is the decision in Commissioner of income-tax, West Bengal vs. Smt. Anusuiya Devi (Supra). In view of what we have stated above we are of opinion that the first submission on behalf of the assessee fails.
3. Before leaving this point we would however like to stress that none of the authorities in his case have adverted to the evidence consisting of 11 affidavits filed on behalf of the assessee, by the dealers of Bombay to establish that glass-sheets sold by the the assessee was not glass-ware. The question whether a commodity is a raw material, Semi-finished product or finished product depends on the evidence and on the circumstances of each case. The burden, in a taxing statute is on the Department to establish affirmatively that the turnover of a dealer is taxable. The assessee led evidence to establish that the glass-sheet was not covered by the entry glass-ware. The authorities should have considered the evidence and recorded a finding after appreciating the same. It appears to us that the authorities thought that the question whether glass sheet is glass-ware was a pure question of law and therefore without adverting to the material on record they preferred to rely on decision of the Bombay High Court. The Supreme Court in 87 I.T.R. 370 at page 382 (Supra) sounded a note of caution in the following words :
"Whether we adopt the extended view advanced by Lord Radcliffe or the view of Lord Simonds, what has to be safeguarded against is that any crystallisation of the views of this court and its reluctance to interfere with the finding of fact should not make the Tribunals or Income Tax authorities smug in the belief that, as the courts did not interfere with the findings which form the bed rock upon which the law will be based they can act on that assumption in finding facts or by their mere ipsi dixit that they are finding of fact wish it to be so assumed irrespective of whether they are suitable in law or on the materials on record."
4. We have no hesitation in saying that the courts below in this case have denied to the assistance of a proper finding of fact.
5. The next submission on behalf of the assessee was that glass-sheets are taxable at the rate of 2% as unclassified item. Reliance has been placed on a decision reported in 1975 Sales Tax Cases page 291. The decision, however, does not help him as it has not laid down any principle but confirmed the findings of the Tribunal that glass-sheet on the evidence adduced was not glass-ware. No reasons have been given except that it was a finding of fact. As such it could not be interfered by the High Court. The finding recorded in this case is that glass-sheet sold by the assessee is a finished goods. In view of that this finding can not be challenged, in our opinion, the case is squarely covered by a decision reported in M/s. U.P. Glass Works Ltd. Bahjoi, Moradabad vs. Commissioner of Sales Tax, U.P. (1973 U.P. Tax Cases 352). Mr. Hajela has expressed apprehension that our decision may preclude the authorities from reconsidering the question whether glass-sheet sold by the assessee was a finished product in other years. We do not think that the decision in any manner creates a bar or places any hurdle before the authorities from considering the evidence and recording finding whether glass-sheet is a finished product or raw material. We may cite in this connection a paragraph from 82 I.T.R. 547 at page 554 :
"It was next urged by Mr. Manchanda that our decision in this case may preclude the Department from reconsidering the correctness of the finding reached by the Income Tax Officer, the Appellate Assistant Commissioner and the Tribunal in the assessees case in the subsequent years. This apprehension may again be not well-founded. Generally speaking, the rule of res judicate does not supply to taxation proceedings. We have not gone into the correctness of the findings of fact reached by the Tribunal. Therefore whether those facts and circumstances were correctly found or not may still be a matter for consideration in any future assessment."
Similar is the situation in this case. We have refrained from considering the validity of the finding recorded by the Additional Judge (Revisions) in view of the fact that no question on this aspect has been referred to us but this does not mean that the authorities are debarred from considering the evidence in subsequent years.
6. In view of what we have stated we answer the reference by saying that in the facts and circumstances of the present case the glass sheets sold by the assessee would be taxable as glassware under section 3-A of the U.P. Sales Tax Act. In the circumstances, however, there shall be no order as to costs.