Judgment

DUA, J. :- This appeal by the Commissioner of Sales Tax, Uttar Pradesh is by special leave and is directed against the judgment of the Allahabad High Court answering the following question in the negative in favour of the respondent (hereinafter called the dealer) and against the Commissioner of Sales Tax, appellant :

"Whether the food colour and essence are under the circumstances items to be taxed under Section 3A within the notification no. ST-905/X dated March 31, 1956?"

2. The dealer carries on the business, inter alia, of selling food colours and syrup essences. The dealer also carries on the business of petroleum jelly but we are not concerned withs that item in this appeal : nor are we concerned with the sales of imported scents and perfumes which, according to the order of the Sales Tax Officer, were separately shown in the statement filed by the dealer, during the assessment proceedings for the year 1960-61. For the said year the Sales Tax Officer taxed food colours and syrup essences imported by the dealer from outside Uttar Pradesh under S. 3A of U. P. Sales Tax Act, 15 of 1948 (hereinafter called the Act) treating them as imported colours and perfumes. The figures of the dealer s trading account were accepted by the Sales Tax Officer. The dealer, according to whom, food colours and syrup essence being unclassified goods were taxable under S. 3 and not under Section 3A of the Act, unsuccessfully appealed against the order of the Sales Tax Officer to the Assistant Commissioner (Judicial); II Sales Tax, Kanpur. Further revision to the Court of the Judge (Revisions) Sales Tax, Lucknow, also failed. It may, however, be pointed out that for the assessment year 1957-58 the Appellate Authority had, in disagreement with the assessing officer, held food colours and essences of syrup to be unclassified items and had granted the relief claimed by the dealer. Against that decision of the Appellate Authority the Department preferred a revision to the Court of the Judge (Revisions), Sales Tax. Both these revisions, by the Department with respect to the assessment year 1957-58 and by the dealer with respect to the assessment year 1960-61 were heard together and disposed of by the common order dated November 19, 1965. The dealer s application for reference was, however, allowed and the learned Judge (Revisions), Sales Tax referred for determination of the Allahabad High Court the question reproduced in the beginning of this judgment. The High Court agreed with the dealer s contention and held food colours and syrup essences not to fall within the entries at items nos. 10 and 37 of the Notification under S. 3A of the Act. The reference was accordingly answered in the negative and against the Department. The only question which now falls for determination is the one referred to the High Court and which has already been reproduced. There is no dispute about the turnover. The dealer claims that on imported food colours and syrup essences the rate of tax should be 2 nP per rupee as unclassified goods under S. 3, whereas according to the Commissioner the tax should be 6 nP per rupee under S. 3A of the Act. Section 3 provides for liability to tax under the Act whereas Section 3A, which was inserted by U.P. Act 25 of 1948 and has thereafter been amended from time to time, deals with single point taxation. Section 3A reads:

"3-A. Single point taxation : (1) Notwithstanding anything contained in Section 3, the State Government may, by notification in the official Gazette, declare that the turnover in respect of any goods or class of goods shall not be liable to tax except at such single point in the series of sales by successive dealers as the State Government may specify.

(2) If the State Government makes a declaration under sub-section (1), it may further declare that the turnover in respect of such goods shall be liable to tax at such rate not exceeding ten naya paise per rupee as may be specified.

(3) Every notification made under t