Judgment

R. S. SARKARIA, J.:--- These appeals by special leave are directed against the judgment of the High Court of Allahabad answering in favour of the assessee the following question referred to it under Section 11 of the U. P. Sales Tax Act, 1948 (for short called the Act):

"Whether the articles "carpet woollen yarn" is covered by the term yarn mentioned in Item No. 4 of Notification. No. ST-1365/X dated 1-4-1960 taxable at 6 pies and 3 pies (sic) per cent respectively or a kind of woollen goods as mentioned at Item No.46 taxable at one anna per rupee according to Notification No. ST-905/X dated 31-3-1956 or whether it is an unclassified item taxable at 2%".

2. M/s. Sarin Textile Mills, Agra is a manufacture of and dealer in "woollen carpet yarn", popularly known as "kati" . The relevant assessment years are 1959-1960 and 1961-62. The only dispute is whether such kati should be taxed as "yarn" at 3% or as woollen goods" at one anna per rupee, under the relevant notification issued under Section 3-A or as an unclassified item at 2% under Section 3 of the Act.

3. The Sales Tax Officer by his order dated 6-10-1965, regarded it as a kind if yarn covered by Entry No. 4, Notification No.ST-907/X, dated 31-3 1956, and so taxed it at six pies per cent for the year 1961-1962 in view of subsequent notification St- 1365/X dated 1-4-1960.

4. On appeal by the assessee, the Assistant Commissioner (Judicial) reversed that interpretation and held that woollen carpet kati was an unclassified item taxable at the rate of 2 per cent.

5. The Commissioner of Sales Tax moved the Revisional Authority under Section 10 of the Act against the order of the Assistant Commissioner (Judicial). The Judge (Revisions) agreed with the interpretation adopted by the Assistant Commissioner (Judicial) and dismissed the revision application.

6. On applications filed by the Commissioner under Section 11 (3) of the Act, the Judge (Revisions), referred the aforesaid question to the High Court.

7. The High court also held that the woollen carpet kati is not yarn since it is unspun fibre not used in weaving, and, as such, it is not taxable as a kind of yarn under the aforesaid notifications. It further rejected the alternative contention of the Revenue that "woollen carpet kati" is taxable under the Notification No. ST-905/X as "woollen goods". In the result ,the High Court answered the questions against the Revenue. Hence these appeals.

8. Mr. Rane, learned Counsel for the appellant contends that the term "yarn" used in the aforesaid notifications should be interpreted in the sense in which it is understood by persons engaged in the trade. Stress has been placed on the fact that in English, even the assessee has been describing the article in question as "woollen carpet yarn". Such kati, it is pointed out is used in the manufacture of carpets by a process of knotting , which in ordinary parlance is described as weaving . According to Mr. Rane, the distinction drawn by the High Court, between weaving and knotting , being too fine and artificial, is not justified. It is maintained that the Sales Tax Officer had rightly held that all twisted wool fibres are yarn . Since this woollen kati is such a fibre, it is "yarn" and taxable as such under the aforesaid notifications. In the alternative. Counsel submits that this article falls within the purview of "woollen goods" and is taxable as such under Notification No. ST-905/X of 1956.

9. As against this, Mr. Manchanda, learned Counsel for the assessee contends that in the past for about 8 years, the Revenue had been understanding and treating for the purpose of taxation, "woollen carpet kati" as an article different from "yarn" and "woollen goods" within the contemplation of the aforesaid notifications. It is stressed that for the first time it was on 23-9-1963 that the Sales Tax Officer departed from this time-honored interpretation and held "woollen carpet kati" to be "yarn" within the said notifications. It is su