TaxTMI 
TaxTMI 
1969 (2) TMI 157
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.... was delivered by RAMASWAMI, J.-In this case the respondent is a partnership firm carrying on the business of buying and selling cotton and also of ginning and pressing cotton at Barnala. The respondent purchased unginned cotton and, after ginning the cotton by a mechanical process and removing the seeds, sold the ginned cotton to customers outside the State. For the period from 1st April, 1961, to 31st March, 1962, the respondent paid purchase tax on the purchase turnover. In respect of cotton seeds sold by it to registered dealers, the respondent claimed deduction from the purchase turnover under section 5(2)(a)(vi) of the Punjab Sales Tax Act, 1948 (46 of 1948). But the assessing authority did not allow the deduction holding th....
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....ton (indigenous or import- ed) in its unmanufactured state, whether ginned or unginned, baled, pressed or otherwise, but not including cotton waste." "(3) Oil-seeds, that is to say, seeds yielding non-volatile oils used for human consumption, or in industry, or in the manufacture of varnishes, soaps and the like, or in lubrication, and volatile oils used chiefly in medicines, perfumes, cosmetics and the like." Section 5(2)(a)(vi) of the Act is to the following effect: "5. (2) In this Act the expression 'taxable turnover' means that part of a dealer's gross turnover during any period which remains after deducting therefrom- (a) his turnover during that period on... (vi) the purchase of goods which are sold not later than six m....
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....ales tax law of a State shall, in so far as it imposes or authorises the imposition of a tax on the sale or purchase of declared goods, be subject to the following restrictions and conditions, namely: (a) the tax payable under that law in respect of any sale or purchase of such goods inside the State shall not exceed two per cent. of the sale or purchase price thereof, and such tax shall not be levied at more than one stage: (b) where a tax has been levied under that law in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the course of inter-State trade or commerce, the tax so levied shall be refunded to such person in such manner and subject to such conditions as may be provided in any....
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....eed-cotton cleaners, burr extractors, green-boll traps and magnetic devices for removing metal. Line cleaners, designed to remove trash from lint after it had been removed from the seed, were added to modern gins in the late 1940s and 1950s. Improvement in grade, which resulted in a higher price for the lint, was, in some cases, offset by the loss in weight. Gin installations include presses for baling the lint and equipment for moving the seed away from the gin stands. While some of the seed is saved for planting purposes, most of it moves directly to an oil mill for processing"'. In our opinion, the appellants are right in their contention that the ginning process is a manufacturing process. But the question presented for determinat....