Cotton yarn and sewing thread treated as one commodity, retaining declared goods status under sales tax law.

Cotton yarn and sewing thread were treated as the same commodity for sales tax purposes under the Tamil Nadu General Sales Tax Act, 1959. The Court followed binding precedent that sewing thread does not lose its identity as cotton yarn merely because it is dyed, wound on spools, or sold in thread form. On that basis, sewing thread manufactured from cotton yarn continued to qualify as declared goods under the relevant schedule entry, and the Revenue's contrary view was rejected.

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Issues: Whether cotton yarn and sewing thread are the same commodity for the purpose of sales tax under the Tamil Nadu General Sales Tax Act, 1959, and whether sewing thread manufactured from cotton yarn retains the character of declared goods.

Analysis: The earlier decisions of the Court had already held that sewing thread does not lose its character as cotton yarn merely because it is dyed, put into spools, and sold as sewing thread. The Court followed the settled position that sewing thread and cotton yarn are one and the same commodity, and therefore the goods continued to enjoy the status of declared goods under the relevant schedule entry. The contrary view taken by the Revenue was not accepted in light of the binding precedent on the point.

Conclusion: The issue was decided in favour of the assessee. Cotton thread manufactured from cotton yarn was held to remain declared goods and to be the same commodity as cotton yarn.

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