The main legal point established in the judgment is that the character of the goods, particularly whether they retain their identity as cereals, determines their taxability at the special rate under the relevant notification.

S. P. Sinha, Nagendra Prasad Singh, JJ.

1. On being directed by this Court to state a case on the undermentioned question of law, which is common for all the periods in question, the Commercial Taxes Tribunal has made the statement: whether sewai is taxable at the general rate of sales tax prevalent during the period under assessment, i. e. , 1st April, 1959, to 30th June, 1959, and not at a special rate of tax applicable to cereals under the relevant notification then in vogue?

2. Same is the question with regard to the other period also, namely, for the period 1st July, 1959, to 31st March, 1961. In substance, the question is, whether or not sewai is a cereal and included in the relevant notification. The relevant notification is STGL-J-2042/68-12568 F. T. dated 27th December, 1968, amended from time to time prescribing the rate of tax, whether general or special, at which the particular goods were taxable. The relevant notification reads: cereals and pulses including all forms of rice, gram, peas, moong, arhar, masur, khesari, millet, bajra and jowar, wheat, oats, barley, maize, broken pulses, sago, besan, sattu, and flour including atta, maida, suji and bran.

3. The rate of tax prescribed is special sales tax at 2 per cent.

4. It may be stated that so far as the period 1st April, 1959, to 30th June, 1959, is concerned, it would be governed by the Bihar Sales Tax Act, 1947, and so far as the latter period is concerned by the Bihar Sales Tax Act, 1959. But, this fact does not make any difference, in so far as the question referred for opinion is concerned.

5. The facts relevant are as under: The opposite party (whom I shall hereinafter refer to as the dealer) carried on business of manufacturing and selling sewai, which is a type of thin thread-like article. Since the dealer had not got itself registered under the Act, proceedings under Sec.13 (5) of the Bihar Sales Tax Act, 1947, equivalent to Sec.16 (5) of the Bihar Sales Tax Act, 1959, were initiated for the respective periods. The dealer was held liable to pay sales tax with effect from 1st April, 1959, and for all the succeeding periods stated above. The rate at which the taxable turnover on sales of sewai was taxed was the general rate at 4 per cent for the first period ending on 30th June, 1959, and at 3 per cent for the succeeding period ending on 31st March, 1961.

6. On appeal, the Appellate Assistant Commissioner of Commercial Taxes accepted the dealers plea that sewai was either a form of maida or a wheat product or a cooked food and, as such, it was not assessable at the general rate of sales tax but at the special rate of sales tax, namely, at 2 per cent of the turnover.

7. The department then appealed to the Deputy Commissioner of Commercial Taxes, Patna Division, Patna, who reversed the order of the Assistant Commissioner of Commercial Taxes, on the ground that sewai was not cereal, being entirely distinct from flour and maida. It was also not cooked food. The Deputy Commissioner of Commercial Taxes, therefore, directed that the sales of sewai should be taxed at the general rate of 4 per cent for the period ending 30th June, 1959, and 3 per cent for the period ending 31st March, 1961.

8. The dealer then filed revision applications in respect of the different periods before the Commercial Taxes Tribunal, Bihar, Patna. The Tribunal held that sewai was nothing but slender threads of wheat paste or more correctly of maida paste and retained the character of being maida. It was essentially in the nature of cereals. The Tribunal relied upon the decision of the Assam High Court in the case of Kapildeoram Baijnath Prosad V/s. J. K. Das [1954] 5 S. T. C.365. The Tribunal, therefore, in effect upheld the decision of the Assistant Commissioner of Commercial Taxes.

9. The Commissioner of Commercial Taxes then sought for reference to be made to this Court on the aforesaid question, which the Tribunal refused. It was then that this Court, having been moved by the de