C.S.P. Singh, J.
1. This reference under Section 11 of the U. P. Sales Tax Act raises the following question of law:
Whether, on the facts and circumstances of the case, borax sold by the opposite party was taxable as a chemical or as an unclassified item?
2. The assessee dealt in kotu, herbs and borax during the relevant assessment years. The Sales Tax Officer taxed the turnover of herb and certain other articles at 2 per cent treating them to be unclassified articles. In respect of the sales of borax, he taxed it at the rate of 7 per cent treating it to be a chemical. On appeal, the assessee contended that the borax which was sold by him was nothing but chaukia sohaga, which is a raw form of borax obtained from rocks and cannot be treated as a chemical. The contention of the assessee was dealt with by the Assistant Commissioner (Judicial) II, Sales Tax, Bareilly. The Commissioner thereafter filed a revision before the Additional Judge (Revisions), Sales Tax. The revision application was dismissed, inasmuch as the revising authority took the view that borax was not a chemical and had to be taxed at the rate of 2 per cent as an unclassified article. The Commissioner thereafter applied for and obtained a reference to this court.
3. The controversy as to whether borax obtained in raw form is a chemical or not appears to have arisen on account of notifications issued under Section 3-A of the U. P. Sales Tax Act, 1948. The two relevant notifications are Notification No. ST-1365/X--990-1956 dated 1st April, 1960, and Notification No. ST-3391/X--1012-1962 dated 1st July, 1962. There are two other notifications dealing with chemicals, the same being Notification No. ST-905/X dated 31st March, 1956, and Notification No. ST-8301-I/X--1008(64)-1964 dated 1st April, 1966, but inasmuch as these notifications do not pertain to the relevant years, it is not necessary to refer to them. The notification of 1962 amends the notification of 1st April, 1960, and, as such, it is necessary to refer to both of them. The relevant part of the notification of 1st April, 1960, for the sake of convenience is reproduced below:
Notification No. ST-1365/X--990-1956 dated 1st April, I960.--In exercise of the powers conferred by Section 3-A of the Uttar Pradesh Sales Tax Act, 1948 (U. P. Act No. XV of 1948), as amended from time to time, the Governor of Uttar Pradesh is pleased to
supersede, with effect from April 1, 1960, all the previous notifications so far as they relate to the goods mentioned in column 2 of the schedule hereto and the rates of sales tax given in such notifications, and
declare that, with effect from April 1, 1960, the turnover in respect of the goods mentioned in column 2 of the schedule hereto shall be liable to tax only at the point of sale specified in column 4 thereof and under the circumstances specified in column 3 thereof.
2. The Governor is further pleased to declare that as from April 1,1960, the rate of tax in respect of the turnover of individual goods mentioned in the aforesaid column 2 shall be as mentioned against each goods in column 5 of the schedule hereto: ScheduleSl. Name of goods Circumstances under Point of tax Rate of taxNo. which to be taxed1 2 3 4 54. Chemicals of all (a) If imported from (a) Sale by im- 6 paise perkinds. outside Uttar porter. rupee.Pradesh. (b) Sale by manu-(b) If manufactured facturer.in Uttar Pra- desh.
4. This notification was amended by the notification of 1st July, 1982, which runs as under:
Notification No. ST-3391/X--1012-1962 dated 1st July, 1962.--In exercise of the powers under Section 3-A of the Uttar Pradesh Sales Tax Act, 1948 (U. P. Act No. XV of 1948), read with Section 21 of the U. P. General Clauses Act, 1904 (U, P. Act. No. I of 1904), the Governor of Uttar Pradesh is pleased to--
partially supersede, with effect from July 1, 1962, Notification No. ST-1355/X--990-1956 dated April 1, 1960, to the extent it relates to the rates of the tax mentioned in column 5 against serial numbers 4 (as amended by Notification No. ST-4907/X--900(4)-61 dated March 1, 1962), 5, 7, 13, 24 and 33 of the schedule to that notification, and
declare that the turnover in respect of individual goods, mentioned at the aforementioned serial numbers, of the schedule to the said notification of April 1, 1960, shall continue to be not liable to tax except at the point of the sale, specified in column 4 of the said schedule, and under the circumstances specified in column 3 thereof (as reproduced in the schedule to this notification), and
further declare that, with effect from July 1, 1962, the turnover at the said point of sale in respect of the individual goods mentioned at the aforesaid serial numbers (reproduced in column number 2 of the schedule to this notification) shall be liable to tax at the rate specified against each serial number in column number 5 of the schedule to this notification.ScheduleSl. Name of goods Circumstances under Point of tax Rate of taxNo. which to be taxed1 2 3 4 54. Chemicals of all (a) If imported from (a) Sale by im- 6 paise perkinds other than outside Uttar porter. rupee.soda ash. Pradesh. (b) Sale by manu-(b) If manufactured facturer.in Uttar Pra- desh.
5. It will be noticed that the notification of 1st July, 1962, superseded the notification of 1st April, 1960, in respect of the rate of tax mentioned in respect of chemicals and further declared that the chemicals continued to be not liable to tax except at the point of sale specified in column 4 of the schedule, and under the circumstances prescribed in column 3 thereof. The result of this notification was that chemicals of all kinds other than soda ash, were not liable to tax except at the point of sale by the importer in case of imported chemicals and at the point of sale by the manufacturers in respect of chemicals manufactured in Uttar Pradesh. Thus this notification applied only to chemicals which were imported and chemicals which were manufactured in Uttar Pradesh. There is no dispute that the raw borax sold by the assessee was neither imported from outside Uttar Pradesh nor manufactured in Uttar Pradesh, inasmuch as the assessee only collected the borax found in raw form. This being so, the notification of 1st July, 1962, did not apply to the sale of raw borax, as the circumstances under which the article could be taxed under the notification were not present in the case of the sale effected by the assessee. No other notification relevant to the assessment year in question has been brought to our notice by which chemicals were subjected to a single point tax at the rate of 7 paise per rupee instead of multiple point tax in respect of unclassified article. The result is that raw borax sold by the assessee could not be taxed at the rate of 7 per cent even on the assumption that it is a chemical. In view of this conclusion, it is not necessary to consider the question as to whether borax is a chemical.
6. We, therefore, answer the question referred to us by holding that the borax sold by the assessee was taxable as an unclassified article and not as a chemical. The assessee is entitled to its costs which we assess at Rs. 100.