The judgment of the court was delivered by

PATHAK, J. - In this reference under section 11(1) of the U.P. Sales Tax Act the Additional Revising Authority, Sales Tax, Varanasi, has submitted the following questions of law for the opinion of this court :-

"(1) Whether in the above circumstance the stay was effective for the year 1959-60 or for all the years ?

(2) Whether the assessment for 1960-61 was passed within the period of limitation ?

(3) Whether assembled cycles can be taxed at the rate of 2 per cent. as an unclassified item or as manufactured cycles taxable at 3 per cent. ?

(4) Whether the estimate of sales was justified ignoring the figure of purchase through Form 'C' with the Sales Tax Officer ?"

The assessee deals in cycles, cycle parts, tyres and tubes. It also assembles cycles from cycle parts and sells them.

On 17th September, 1964, the Commissioner of Sales Tax issued a direction to the Sales Tax Officers that sales tax should be assessed on the turnover of assembled cycles. Proceedings under rule 41(5) of the U.P. Sales Tax Rules were taken against the assessee for the assessment year 1960-61. The assessee objected to the proceedings on the ground that they were barred by time, but the plea was rejected by the Sales Tax Officer, who made an assessment order on 10th June, 1965, determining the taxable turnover of imported and assembled cycles at Rs. 2,00,000 and of tyres and tubes imported from outside the State at Rs. 5,000. An appeal by the assessee was dismissed and a revision application filed thereafter was also dismissed. At the instance of the assessee the present reference has now been made.

The first two questions referred by the Additional Revising Authority are interlinked, and arise upon the following facts. When the Commissioner of Sales Tax issued the letter dated 17th September, 1964, directing the Sales Tax Officers to assess sales tax on the turnover of assembled cycles a petition under article 226 of the Constitution was filed in December, 1964, by the assessee in this court praying for the quashing of that direction and for an order prohibiting the Sales Tax officer from taking any proceeding pursuant to that direction against the petitioner. An application for interim relief was made in the writ petition with the following prayer :

"It is prayed that an interim order be issued, staying further proceeding before respondent No. 2 on the basis of the letter of the Commissioner dated 17th September, 1964, during the pendency of this writ petition."

On that application an ex parte order was made by this court :

"Issue notice. Further proceedings before the second respondent as against the applicant shall remain stayed meanwhile."

The writ petition was dismissed on 19th May, 1965. Thus, the stay order remained in operation for four months and eight days. The case of the assessee before the sales tax authorities was that the period of limitation for completing the assessment proceeding for the assessment year 1960-61 expired on 31st March, 1965, and, therefore, the assessment order was barred by limitation. Reliance was placed on section 21(2) of the U.P. Sales Tax Act which provides that no assessment order shall be made for any assessment year expiry of four years from the end of such year. The sales tax department, in reply, referred to the explanation to section 21(2), which provides that where the assessment proceeding remained stayed under the orders of any civil or any other competent court the period during which the proceeding remained stayed must be excluded in computing the period of limitation provided under that sub-section. And accordingly, it says, if account be taken of the four months and eight days during which the stay order remained in operation it will be found that the assessment order for the year 1960-61 is within time.

Now, the contention of the assessee is that the writ petition was concerned with the proceeding for the assessment year 1959-60 only and, therefore, t