COMMISSIONER TRADE TAX Vs. MEERUT HOSIERY FACTORY

JUDGEMENT

(1.) The present revision under Section 11 of U.P. Trade Tax Act (hereinafter referred to as Act) is directed against the order of Tribunal dated 05.05.1997 relating to assessment year 1991-92 under the U.P. Trade Tax Act.

(2.) The question involved in the present revision relates to the classification of Elastic Yarn manufactured by the dealer. Elastic Yarn is admittedly manufactured by putting the Acrylic or Nylon thread over the rubber thread and is commonly used to provide tightness and elastic on the upper portion of Socks. The claim of revenue is that it was liable to tax under the entry 25 "Knitting Yarn, whether Woolen, Acrylic or of any other kind" of Notification No. ST-II-5785/X-10(1)- 80-U.P. Act-XV/48-Order-81, dated 7.9.1981 @ 6% up to 31.10.1991 and thereafter, @ 4%. Claim of dealer is that it was liable to tax under the entry 55 "Yarns of all kinds except those covered by any other Notification" of Notification No. ST-II-5785/X-10(1)-80-U.P. Act-XV/48-Order-81, dated 7.9.1981 @ 2%.

(3.) In the original assessment proceeding, Elastic Yarn manufactured by the dealer was assessed to tax @. 2% under the entry 55 "Yarn of all kinds". Assessing Authority passed an order under Section 21 of the Act and levied tax on the turnover of Elastic Yarn under the entry "Knitting Yarns, whether Woolen, Acrylic or of any other kind" of Notification No. ST-II-5785/X-10(1)-80-U.P. Act-XV/48-Order-81, dated 7.9.1981 the rate applicable to it. First Appeal filed by the dealer was allowed and the Elastic Yarn has been held taxable under the entry Yarn of all kinds" of Notification No. ST-II-5785/X-10(1)-80-U.P. Act-XV/48-Order-81, dated 7.9.1981. The Commissioner of Trade Tax filed appeal before the Tribunal which has been dismissed by the impugned order.