Cotton seeds are a distinct commodity after ginning, so purchase turnover deduction for cotton was rightly denied.

Ginning was treated as a manufacturing process that separated unginned cotton into cotton and cotton seeds. Although cotton, whether ginned or unginned, was regarded as a single declared commodity under the Central Sales Tax Act, cotton seeds were not included in that description and became a distinct commercial commodity once separated. On that basis, cotton seeds could not be treated as cotton for claiming deduction from purchase turnover under the Punjab Sales Tax Act, and the disallowance of the deduction was upheld in favour of the Revenue.

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Issues: Whether cotton seeds obtained after ginning unginned cotton could be treated as the same goods as cotton so as to qualify for deduction from purchase turnover under section 5(2)(a)(vi) of the Punjab Sales Tax Act, 1948.

Analysis: Ginning was accepted as a manufacturing process, and unginned cotton was thereby separated into cotton and cotton seeds. While cotton ginned or unginned was treated as a single commodity for the purpose of declared goods under sections 14 and 15 of the Central Sales Tax Act, 1956, cotton seeds were not part of that declared-goods description. The seeds, once separated, constituted a distinct commercial commodity and could not be treated as cotton itself for the purpose of the claimed deduction.

Conclusion: The deduction was not allowable in respect of cotton seeds, and the assessment disallowing the claim was upheld in favour of the Revenue.

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