PALCO LINING COMPANY Vs. SALES TAX OFFICER

JUDGEMENT

(1.) These two petitions under Article 226 of the Constitution raise a common question relating to the assessment of the petitioner-firms under the U.P. Sales Tax Act for the year 1973-74.

(2.) M/s. Palco Lining Company as well as M/s. K.P. Traders, petitioners in the two writ petitions, are partnership firms carrying on the business of purchasing and selling collar lining, etc., which, according to their case, was cotton fabric rendering the turnover of sale exempt from tax.

(3.) The Sales Tax Officer, while dealing with the case of the petitioners under Section 7(3) of the Act, accepted the account books and found that the purchases made by the petitioners were tally proved and the sales were duly vouched. He then went into the question whether the collar lining sold by the petitioners was a variety of cotton fabric so as to render it exempt from tax or not. A sample of collar lining was produced before him. The Sales Tax Officer accepted the claim that what was sold by the petitioners was nothing but cotton fabric. The turnover was held exempt from any tax liability. This was through an order of 30th June, 1976.