TMI Blog1996 (10) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by him. Before the Commissioner, the assessee described the process applied to cotton for converting it into absorbent cotton wool as follows: "The broken seed leaf and dirt in raw cotton are removed and the opened cotton is boiled with caustic soda and soda ash. As a result, fats and waxes are removed from cotton. The cotton is then bleached to white colour. The water in the cotton is removed by pressing it through the hydro/extractor machine. The cotton that comes out is in the form of lumps and hence lumps are opened in the wet cotton opener machine. The opened cotton is then dried and the dried cotton is taken in blow room where cotton laps are prepared. The cotton laps are carded and the carded laps are rolled, cut, weighed, labelled and sealed in plastic bags for marketing." The case of the assessee was that absorbent cotton wool was nothing but cotton in its unmanufactured state and hence it should fall under entry 2 of Schedule B to the Act. Entry 2 of Schedule B, at the material time, was as follows: "SCHEDULE B (See sections 7, 13 and 14) Declared goods, the sales or purchase of which is subject to sales tax or purchase tax and the rate of tax. Sl. No. Des ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... process applied to raw cotton to convert the same into absorbent cotton wool cannot be regarded as a process of manufacture because cotton remains cotton in its unmanufactured state even after the same is processed to make it fit for a particular use. According to the learned counsel, no new commercial product comes into existence as a result of the process applied by the assessee to raw cotton to convert it into absorbent cotton wool. Reliance is placed in support of this contention on the decision of the Supreme Court in Alladi Venkateswarlu v. Government of Andhra Pradesh [1978] 41 STC 394 (SC) and the decisions of this Court in Commissioner of Sales Tax v. Rajshree Electronics [1995] 98 STC 403, Commissioner of Sales Tax v. Abhaykumar and Co. [1995] 98 STC 212, Commissioner of Sales Tax v. Mahalaxmi Stores [1995] 97 STC 601 and Technova Graphic Systems Private Limited v. Commissioner of Sales Tax [1995] 99 STC 77. The case of the assessee is that every process undertaken by the assessee on the goods to make them fit for the market or for improving their marketability does not amount to a process of manufacture and the product emerging as a result of such process cannot be regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture contained in section 2(17) of this Act which is couched in the widest possible language to mean, "Producing, making, extracting, altering, ornamenting, finishing or otherwise processing, treating, or adapting any goods except such manufactures or manufacturing process as may be prescribed." The contention of the Revenue before the Supreme Court in the above case (State of Maharashtra v. Shiv Datt Sons [1992] 84 STC 497) was that the definition of "manufacture" in section 2(17) of this Act being very wide and unrestricted any process with reference to the goods purchased will, according to the definition, amount to a process of manufacture and consequently render the goods of a different class altogether. The Supreme Court repelled this contention of the Revenue and held that that was not the intention of the Legislature. The Supreme Court emphasised the necessity of interpreting the expression "manufacture" in a practical and workable manner and observed that the mere fact that the words used in the definition of "manufacture" are very wide cannot lead one to so widely interpret them as to render the provision practically meaningless and so as to treat the goods so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the table. It was, therefore, held that the processing and freezing of prawns was not a process of manufacture. 9.. It may be expedient in this connection to refer to the decision of the Supreme Court in Alladi Venkateswarlu v. Government of Andhra Pradesh [1978] 41 STC 394 where "rice" was held to include "parched rice" and "puffed rice". In the above case, it was observed (at page 397): "The term rice is wide enough to include rice in its various forms whether edible or inedible. Rice in the form of grain is not edible. Parched rice and puffed rice are edible. But, the entry rice seems to us to cover both forms of rice. At any rate, it is wide enough to cover them." While saying so the Supreme Court observed: "Even if parched rice and puffed rice could be looked upon as separate in commercial character from rice as grain offered for sale in a market, yet.......it could not be presumed that it was intended to exclude from entry...... rice , which, at any rate, had not so changed its identity as not to be describable as rice at all." 10.. Reference may also be made in this connection to some of the recent decisions of this Court where the meaning of the expre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied in all such cases is whether a commercially different and distinct article has come into existence as a result of the processing of the original commodity. In other words, whether the article produced is regarded in the trade by those who deal in it as distinct in identity from the commodity involved in processing." (Emphasis* supplied). 12.. Applying the ratio of the above decisions, it is clear that cotton which had been specifically defined to mean all kinds of cotton, whether ginned or unginned, would include absorbent cotton wool. Absorbent cotton wool does not cease to be cotton merely because it is prepared by cleaning, ginning, drying and sterilizing. Despite all that it retains its essential character of "cotton". It has therefore to be regarded as a "kind of cotton" within the meaning of entry 2 of Schedule B to the Act. The expression "all kinds of cotton" cannot be construed to refer only to various varieties of cotton because that would be implied by the mere use of the expression "cotton". It would take within its ambit all forms which cotton may take so long as they do not altogether lose the original shape or character of cotton. In the instant case, absorbent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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