Ranjit Singh Sarkaria, J.

1. Appellant is a company registered under the Companies Act, 1956 , having its registered office at Calcutta and a factory at Faridabad (Haryana State) for the manufacture and processing of textiles. It is a registered dealer under the Punjab General Sales Tax Act, 1948 . It also obtained on 1st July, 1957, a certificate of registration (annexure A) under Section 7 of the Central Sales Tax Act, 1956 (hereinafter referred to as "the Act"). Its business, as mentioned in this certificate, is: "textile manufacturing, sale, purchase, wholesale distribution, sale and purchase of yarn and waste and textile machinery". The certificate also specifies the class of goods for the purposes of Sub-section (1) of Section 8 of the Act. Among other things, such goods include cotton textile yarn, dyeing colours and other chemicals for use in the manufacture.

2. The company purchases these goods on the basis of the aforesaid certificate and issues C forms to the selling dealers who claim the deductions and pay tax at the rate of 3 per cent, in the State from which the movement of goods has originated.

3. A notice was issued to the company on 17th September, 1966, by