Cotton waste is a distinct commodity from cotton, so single-point levy treatment for cotton could not apply after milling.

Cotton waste was treated as a distinct commodity from cotton in trade parlance and for sales tax purposes, so the single-point levy applicable to cotton could not be extended to waste arising after milling. The fact that cotton waste may still contain fibres or be capable of further use did not preserve its character as cotton once the material had undergone manufacture and emerged as waste. The statutory scheme's later recognition of the distinction between cotton and cotton waste reinforced that interpretation. The disputed turnover was therefore not liable to assessment on the footing that it remained cotton at the purchase point.

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Issues: Whether cotton waste could be assessed as cotton at the purchase point under the single-point levy provisions, and whether the disputed turnover was liable to tax on the footing that the commodity retained its character as cotton after being used in the milling process.

Analysis: Cotton and cotton waste were treated as distinct commodities in trade parlance, with different market identities and incidents of sale. The mere fact that cotton waste may still contain cotton fibres or may be capable of being spun into coarser products did not make it cotton for sales tax purposes. Once cotton had entered a mill, undergone manufacture, and emerged as waste, it lost its character as cotton in the market and became a different commodity. The scheme of single-point levy for cotton therefore could not be extended to cotton waste in the assessee's hands merely because the goods were intended for export outside the State. The subsequent recognition of the distinction between cotton and cotton waste in the statutory scheme also supported this interpretation.

Conclusion: Cotton waste could not be taxed as cotton at the purchase point, and the assessment on the disputed turnover was not sustainable.

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