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TMI Blog1975 (11) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... 279.84 for the year 1969-70. In the original assessment the turnovers represented by these amounts were taxed at the rate of 1 per cent, apparently because the commodity fell under item 4(ii) to the Second Schedule to the Kerala General Sales Tax Act, 1963. Later it was felt that it was the rate of 3 per cent that was applicable because the commodity in question was not cotton yarn, and fresh notice was issued to the assessee and the above-mentioned turnovers were taxed at 3 per cent. The same procedure was followed for the year 1970-71 relating to a turnover of Rs. 16,166.98, which related to the sale of the same commodity. Appeals taken before the Appellate Assistant Commissioner against those assessment orders failed and there were furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 827 (S.C.). The matter was again considered by the Supreme Court when it had to determine whether "iron rods" could be brought within the item "iron and steel" and the court came to the conclusion that "iron rods" tell within that item (State of Madhya Bharat v. Hiralal[1966] 17 S.T.C. 313 (S.C.). The question that arose in the State of Gujarat v. Sakarwala Brothers[1967] 19 S.T.C. 24 (S.C.).' was whether patasa, harda and alchidana fell within the definition of sugar in entry 47 of Schedule A to the Bombay Sales Tax Act, 1959, and their Lordships of the Supreme Court held that "the word 'sugar' in entry 47 is intended to include within its ambit all forms of sugar, that is to say, sugar of any shape or texture, colour or density and by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adras[1970] 25 S.T.C. 407., and extracted the following passage from that judgment: "Cord means twisted thread thicker than string and thinner than rope. String, cord and rope are different species of the same genus, namely, yarn, which as such means spun thread. Yarn may form one of the threads of a string, cord or rope, but cotton yarn is distinct by itself. Though 'cotton tyre cord warp sheet' manufactured by the assessee is a bunch of spun thread spread to a particular shape for a definite commercial purpose, it does not cease to be cotton yarn and is therefore one of the 'declared goods'." With great respect we are unable to agree with the view taken by the Madras High Court. The question that should have been considered was whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the substance sold by the dealer in these cases as "cotton yarn" and if in the commercial world it is not known or could not be known as "cotton yarn" the article would not fall under item No. 4(ii) of the Second Schedule to the Kerala General Sales Tax Act, 1963. The question has to be determined with reference to the decisions of the Supreme Court to which we have adverted to. We shall only extract a few sentences from the decision in Ganesh Trading Co., Karnal v. State Of Haryana [1973] 32 S.T.C. 623 (S.C.)., as indicative of the test to be applied. The Supreme Court observed thus: "Now, the question for our decision is whether it could be said that when paddy was dehusked and rice produced, its identity remained. It was true that r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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