Judgement

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 S. 5 (2) (a) (vi) of the Punjab Sales Tax Act, 1948 (Act No. 46 of 1948). But the assessing authority did not allow the deduction holding that the goods sold viz., cotton-seeds were not the goods in respect of which purchase tax had been levied. In other words, the assessing authority took the stand that the unginned cotton underwent a manufacturing process and the goods produced were different from those purchased. So the respondent firm was assessed to pay a tax of Rs. 16,452 by the order of the assessing authority dated 11th September, 1963. The respondent firm thereafter filed a writ petition N