TMI Blog1969 (2) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... lf or part of the cotton. They are two distinct commercial goods though before the manufacturing process the seeds might have been a part of the cotton itself. There is hence no warrant for the contention that cotton seed is not different from cotton. It follows that the respondent is not entitled to deduct the sale price of the cotton seeds from the purchase turnover under section 5(2)(a)(vi) of the Act. In our opinion, the assessing authority was right in holding that the respondent was not entitled to deduction in respect of cotton seeds sold by it to registered dealers. It is conceded that the assessing authority had already granted deduction under section 5(2)(a)(vi) so far as ginned cotton is concerned. - Civil Appeal No. 2516, 2517, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 52 by the order of the assessing authority dated 11th September, 1963. The respondent- firm thereafter filed a writ petition, No. 1917 of 1963, in the Punjab High Court for quashing the assessment. The writ petition was allowed by the High Court which quashed the assessment and directed the assessing authority to redetermine the tax in the light of its judgment. In allowing the writ petition of the respondent the High Court followed its previous decision in Patel Cotton Co. P. Ltd. v. State of Punjab [1964] 15 S.T.C. 865. The appellants preferred a Letters Patent Appeal which was dismissed. The present appeal is brought by certificate from the judgment of the Punjab High Court dated 31st March, 1965, It is necessary at this stage to set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 14 of this Act certain goods were declared to be of special importance in inter-State trade or commerce and they included cotton, that is to say, all kinds of cotton (indigenous or imported) in its unmanufactured state, whether ginned or unginned, baled, pressed or otherwise, but not including cotton waste. Section 15 of the Central Sales Tax Act, 1956 has been amended from time to time. Originally section 15 read as follows: "15. Restrictions and conditions in regard to tax on sales or purchases of declared goods.-Notwithstanding anything contained in the sales tax law of any State, the tax payable by any dealer under that law in respect of any sales or purchases of declared goods made by him inside the State shall not exceed tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tinct commercial commodities and there was no substantial identity between unginned cotton and ginned cotton or cotton seeds. It was argued that the ginning process required complicated machinery of manufacture. Reference was made in this connection to the mechanical aspect of the ginning process described in Encyclopaedia Britannica, Volume 6: "Hand separation of lint and seed was replaced rapidly by use of saw-type gins in the United States after the inventions of Eli Whitney in 1794 and of Hogden Holmes in 1796. Whitney's gin was improved upon by Holmes who substituted toothed saws for the hooked cylinder and flat metal ribs for the slotted bar used by Whitney. The saws, metal ribs and doffing brush in these early models persist in mod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ginned or unginned" is treated as a single commodity under one item of declared goods. It is evident that cotton ginned or unginned being treated as a single commodity and as a single species of declared goods cannot be subject under section 15(a) of the Central Sales Tax Act to a tax exceeding two per cent. of the sale or purchase price thereof or at more than one stage. But so far as cotton seeds are concerned, it is difficult to accept the contention that the sale of cotton seeds must be treated as a sale of declared goods for the purpose of section 15(a) or (b) of the Central Sales Tax Act, 1956. It is true that cotton in its unginned state contains cotton seeds. But it is by a manufacturing process that the cotton and the seeds are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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