The notch should be facing down, as a stop for the kickstart shaft so it wont keep turning forward. An easy way to wind up the spring is to remove the kickstart shaft and put the kick lever loosely on the end. This will give you leverage to wind the spring, then you can use needle nose pliers and wind the spring. Then you will face the notch down and with the spring wound up, put the shaft in its place. The gear should be turned all the way out and the clip that can turn freely should go into the lower slot on the crank case.
Then with the shaft installed, you should have strong tension on the return spring, and the notch on the shaft should be resting on the stop tab just below where the shaft fits in place, inside the engine.
I just did this about 30 mins ago when I went to reassemble my clutch.