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The High Court answered the question as follows:

" The applicant company is liable to pay tax for the assessment year 1948-49 on the turnover of the previous year in respect of sales of non-edible oils at the flat rate of 3 pies per rupee."

Against the order of the High Court recording its answer, this appeal with special leave is preferred. The facts which give rise to the appeal are briefly these :

The Modi Food Products Co., Ltd.-hereinafter referred to as " the assessee ", manufactures oils edible and non-edible in its factory at Modinagar, District Meerut, State of Uttar Pradesh. The assessee is registered as a "dealer" under the United Provinces Sales Tax Act XV of 1948. The assessee's year of account commences on June 1, and ends on May 31, next year. For the year of account 1946-47, the assessee's sales of edible and non-edible oils amounted to Rs. 63,02,849-7-7. The U. P. Legislature enacted with effect from April 1, 1948, the United Provinces Sales Tax Act XV of 1948 providing for the levy of a tax on sales of certain commodities. This act was amended by Act XXV of 1948 with retrospective operation from April 1, 1948. By the Act, "
(3) Every dealer by or on whose behalf goods mentioned in the schedule aforesaid are held at the close of the 8th day of June, 1948, shall submit a statement showing the quantity and price of such stock and of the stock of such goods held on the 24th day of May, 1948, to the appropriate assessing authority by the 30th day of June, 1948."

To this notification was appended a schedule which set out the descriptions of diverse commodities, the "circumstances under Which the turnover was to be calculated " the point of tax and the rate of tax. Item 14 of the schedule was " oils of all kinds excluding edible oils but including Vanaspati "

and sales thereof by manufacturers in the U. P. were liable to tax at the rate of 6 pies per rupee. By virtue of this notification, non-edible oils became liable to a single point tax as from June 9, 1948, at the time of sale by an importer or manufacturer in the United Provinces. The assessee submitted its return for the assessment year 1948-49 on its taxable turnover of the previous year ending on May 31, 1947, to the Sales Tax Officer, Meerut Range. On the assessee's return, the Sales Tax Officer assessed the tax at Rs. 1,16,238-12-0, holding that sales of non-edible oils for the first 69 days out of the year of the turnover were to be taxed at the rate of 3 pies, and sales for the remaining 296 days were to be taxed at the rate of 6 pies per rupee. Against the order passed by the Sales Tax Officer, Meerut Range, an appeal was preferred to the Judge (Appeals), Sales Tax, under s. 9 of the Act. The appellate authority modified the order and directed the assessee to pay tax on non-edible oils on the turnover of the previous year at the flat rate of 3 pies per rupee and reduced the tax liability-to Rs. 1,08,477-0-3. This order of the Judge (Appeals) was set aside by the revising authority and the order of the Sales Tax Officer was restored. On, a direction made by the High Court, the revising authority drew up a statement of the case and submitted for opinion a question which in his opinion arose out of the assessment. The High Court re-framed the question as set out hereinbefore, and answered it in favour of the assessee.

Rules were framed by Government inter alia under the power conferred by the 1st proviso just now set out and by rule 39 of the said rules an option was given to dealers to submit returns of their turnover of the assessment year in lieu of the turnover of the previous year.

The assessee exercised the option of being assessed on the basis of the turnover of the previous year under s. 7(1) of the Act and in respect of first assessment year after the Act came to force-assessment year 1948-49, it filed a return in respect of the turnover of its previous year June 1, 1946 to May 31, 1947. The total turnover of the assessee during this period was Rs. 63,02,849-7-7. The Sales Tax Officer by his order dated March 12, 1949, assessed the turnover in respect of edible oil at 3 pies per rupee. As regards the sale of non-edible oil, the sales-tax officer hold that since the notification set out above under s. 3(A) had come into force as and from June 9 of the assessment year, the assessee was liable to be assessed @ 3 pies per rupee on the turnover during the first 69 days of the year and @ 6 pies per rupee in respect of the remaining days of the year and he computed the' tax accordingly. The assessee preferred an appeal to the Judge (Appeals), Meerut Range, Meerut, against the order of the Sales-Tax Officer. This officer allowed the appeal of the assessee and held that the entire turnover was liable to be taxed only at a flat rate of 3 pies per rupee under s. 3(1) of the Act on all oil sold by the assessee---edible or non-edible. The reason assigned for the order was that on the terms of the notification the new rate of tax could not be applied to sales effected in the previous year which had been opted for the purposes of assessment by the assessee and that so to apply it would be tantamount to giving retrospective effect to the notification which was contraindicated by the terms of the notification itself. The department thereupon moved the Judge (Revision) who accepted its contention and restored the order of the Sales-tax Officer applying the provisions of the notification to the turnover of the assessee. There. after the assessee made an application to the Judge (Revision) to state a case for the opinion of the High Court under s. 11 of the Act as to whether the rate of tax fixed by the notification could be applied to the sales of the commodity which factually took place on or before June 8, 1948. This petition having been dismissed, an application was filed before the High Court for directing the reference and on this being ordered the following question (as reframed by the High Court) was referred to it for determination :