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, Notificatio