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TMI Blog1969 (12) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... in silk yarn. In respect of the assessment year 1957-58 the assessee disclosed a gross turnover of Rs. 10,93,440-14-0. This figure included a sum of Rs. 4,80,726-13-0 representing the sale of hand-spun yarn. The assessee claimed exemption from the levy of sales tax in respect of his turnover of hand-spun yarn on the basis of a notification, No. ST-911/X dated 31st of March, 1956, which exempts from sales tax the turnover of hand-spun yarn. The Sales Tax Officer accepted the assessee's claim to the extent of Rs. 3,80,726-13-0 but refused exemption in respect of the remaining turnover of Rs. 1,00,000 on the ground that the same represented the sale of hand-spun yarn which after undergoing a process of twisting became manufactured yarn. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax the turnover of "hand-spun" yarn as opposed to "mill-spun" yarn. So long as yarn is hand-spun it would continue to enjoy the exemption granted by the notification even after it undergoes the process of twisting. The process of twisting has nothing to do with the process of spinning. The emphasis in the notification is obviously on the process of spinning. Any subsequent treatment of the yarn by way of colouring and twisting will not destroy its essential nature of being handspun yarn. The learned counsel for the department tried strenuously to support the view taken by the Sales Tax Officer and the appellate authority but there is a clear fallacy in the view taken by those two officers. They have laid emphasis upon the process of twis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is significant to note that the manufacture of vanaspati from groundnut oil involves a process which brings about an inter-molecular change in the chemical composition of groundnut oil inasmuch as the groundnut oil absorbs two items of hydrogen, and the oil, which before manufacture is in liquid form becomes solidified. The Supreme Court held that the vanaspati so produced as a result of the chemical process did not become a commodity different from groundnut oil. It is a matter of common knowledge that in the commercial world groundnut oil and vanaspati have two different names yet the Supreme Court expressed the opinion that the two commodities remained essentially the same. In The State of Madhya Pradesh v. Hira Lal[1966] 17 S.T.C. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the opinion that the cotton which was intended to be subjected to the single point levy was the raw cotton, commonly so known, before it underwent any process of manufacture. Waste cotton, according to the learned judges, could not be included in that term as waste cotton was a bye-product of the cotton being subjected to the process of manufacture and it was entirely different in character for the purpose of marketability. This case, in our opinion, does not help the department either. The rest of the cases cited by the learned counsel are not to the point. A reference, however, must be made to a recent decision of the Supreme Court in Commissioner of Sales Tax v. Harbilas Rai Sons[1968] 21 S.T.C. 17. This case is not directly to the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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