JUDGMENT

PATHAK, C.J. :— These appeals arise out of writ petitions filed in the High Court of Punjab and Haryana challenging assessments made under the Punjab General Sales Tax Act.

2. The facts obtaining in these appeals are materially similar and, therefore, the facts set-forth in State of Punjab v. Messrs. Aryvarta Industries (Civil Appeals Nos. 409 to 467 of 1975), which was treated as the leading case in the High Court need alone be stated.

3. The respondent Messrs. Aryavarta Industries Private Ltd. carries on business in the State of Punjab at Abohar in the district of Ferozepur. The business consists of purchasing ungineed cotton, and after ginning it selling the ginned cotton. The respondent also purchases cotton as a commission agent for other principals. Under the Punjab General Sales Tax Act purchase tax is payable on the purchase of cotton, which is one of the goods specified in Schedule C to the Act. Purchase tax became leviable with effect from April, 1960, and the tax was imposed at the point of first purchase by a dealer. Deductions were allowed in accordance with S. 5(2) of the Act. The levy of purchase tax on cotton as challenged in appeal before this Court in Bhawani Cotton Mills Ltd. v. State of Punjab (1967) 20 STC 290) and this Court observed that the provisions of the Punjab Act levying purchase tax on declared goods specified in schedule C violated S. 15(a) of the Central Sales Tax Act 1956, in as much as the stage at which the purchase tax was levied was neither defined nor ascertainable, and there was a possibility of tax being levied at more than one stage. The Punjab Act was amended by the Punjab General Sales Tax (Amendment and Validation) Act, 1967, and S. 5(3) now provided that in respect a declared goods tax was to be levied at one stage and that stage would be (i) in the case of goods liable to sales tax, the stage of sale of such goods by the last dealer liable to pay tax under the Punjab Act; (ii) in the case of goods liable to purchase tax, the stage of purchase of such goods by the last dealer liable to pay tax under the Punjab Act. It provides further that the taxable turnover of any dealer for any period would not include his turnover during that period on any sale or purchase of declared goods at any stage other than either of the two stages referred to earlier.

4. For the assessment year 1966-67 the respondent filed his returns under the Punjab Act as it stood before its amendment in 1967. In the returns, the total purchase of unginned cotton was shown and the total sales of ginned cotton and cotton seeds were claimed as deductions from the gross turnover under S. 5(2)(a)(vi) of the Act on the ground that the purchase tax under the unamended Act was to be imposed on the first purchaser of the goods mentioned in Schedule C to the Act. It was contended that such a dealer could claim deductions under S. 5(2)(a) of the Punjab Act, and he was entitled to a deduction in respect of the purchase value of ginned cotton and cotton seeds sold to a registered dealer within six months. After the amendment, the stage of levy of purchase tax now rested at the last purchase by a dealer liable to pay tax under the Act, and if a dealer purchased cotton and sold it to a registered dealer, he was not liable to pay any purchase tax on the cotton purchased by him.

5. The assessing authority made an assessment under the Punjab Act and allowed a deduction with regard to the purchase price of the ginned cotton sold by the respondents to registered dealers out of the gross purchase turnover. It imposed purchase tax on the remainder, which was represented by cotton seeds and ginned or unginned cotton still in the possession of the respondents and undisposed of. The assessing authority relied on the decision of this Court in State of Punjab v. Chandulal Kishorilal (1970) 25 STC 52 : 1969 SC 1073) where it was said that cotton, whether ginned or unginned, was treated as a single commodity or a single specie of declare