ORDER

1. These appeals are directed against the common judgment and order passed by the High Court of Rajasthan in S.B. Civil Sales Tax Revision No. 932 of 2002 and connected matters, dated 23.01.2003. By the impugned judgment and order, the High Court has opined that 'surgical cotton' is a commercially different commodity from 'cotton' and accordingly confirmed the order passed by the Rajasthan Tax Board, Ajmer in Appeal Nos. 509 to 512 of 2001, dated 28.06.2002.

Facts:

2. The appellant is a partnership firm registered as a dealer both under the Rajasthan Sales Tax Act, 1994 (for short, 'the Act') and the Central Sales Tax Act, 1956 (for short, 'the CST Act'). The appellant carries on the business of processing the cotton and transforming it into surgical cotton.

3. The assessment years in question are 1992-93 to 1998-99. The assessee purchases cotton after paying tax at the rate of 4% and thereafter process it into surgical cotton for sale.

4. For the relevant assessment years, the assessing authority had conducted a survey on the business premises of the assessee and opined that surgical cotton produced and sold by the assessee is a separate commercial commodity from cotton and thus liable to be taxed at 4% under the Act. Accordingly, a show cause notice was issued to the assessee. The assessee took the stand that cotton and surgical cotton are not distinct commodities for the purposes of levy of tax under the Act. The said stand of the assessee was rejected by the Assessing Authority which passed an order of assessment whereby the assessee was taxed at the rate of 4% and the penalty and interest thereon, dated 28.03.2000.

5. Being aggrieved by the aforesaid order of assessment, the assessee had carried the matter by way of an appeal before the Deputy Commissioner (Appeals) Commercial Tax, Ajmer. The said authority, accepted the stand of the assessee that the process adopted for making surgical cotton out of cotton purchased does not bring into existence a new commercial commodity and that surgical cotton is nothing but another form of cotton and accordingly, allowed the appeal and granted the relief to the assessee by order dated 10.10.2000.

6. Aggrieved by the aforesaid order passed by the First Appellate Authority, the Revenue had carried the matter before the Rajasthan Tax Board, Ajmer (for short, 'the Board'). The Board after considering the meaning of the expression 'manufacture' as defined under the Act and also placing reliance on the observations made by this Court in various decisions has come to the conclusion that the surgical cotton manufactured by the assessee is a new commercial commodity exigible to tax separately at the rate of 4% under the Act and therefore, set aside the orders passed by the First Appellate Authority and restored the orders passed by the assessing authority for the assessment years in question by order dated 28.06.2002.

7. The assessee being aggrieved by the said order passed by the Board had approached the High Court in S.B. Civil Sales Tax Revision No. 932 of 2002. The High Court has noticed Entry 16 of the notification F.4 (7) FD/Gr.IV/92-70 (S.O. No. 993), dated 04.03.1992 for the assessment year 1992-93 and analysed the submissions of parties to the lis and thereafter reached the conclusion that surgical cotton is amenable to be taxed as an independent entity and accordingly, rejected the tax revision cases and confirmed the orders passed by the Tax Board by the impugned judgment and order dated 23.01.2003.

8. It is the correctness or otherwise of the said judgment and order is the subject matter of these appeals.

9. We have heard the learned counsel appearing for the parties to the lis. We have also perused the documents on record including the judgments and orders passed by the Courts below.

Submissions:

10. Shri V. Giri, learned senior counsel for the appellant submits that by the process of transformation of cotton into surgical cotton no new commercial commodity comes into existence as a re