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TMI Blog1990 (12) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... exempt, being entry 33 of Schedule I to the 1941 Act. The exemption was withdrawn with effect from July 24, 1978. At present in terms of erstwhile rule 3(87) of the Bengal Sales Tax Rules, 1941, sale of "cotton waste" up to July 9, 1978, is allowed to be deducted from the gross turnover of a dealer. The present dispute relates to the assessments during the period from January 1, 1978 to December 31, 1979. There were three separate assessments for the said period. What was done in those assessments is that the turnover of sale of soft waste of cotton up to July 9, 1978, was allowed to be deducted from the gross turnover of the applicant in terms of the old rule 3(87) of the 1941 Rules and deduction of turnover of the same goods was refused by the assessing authority for the rest of the period on the ground that the goods sold by the applicant was "cotton waste" and not "cotton". Appeals were preferred before the appropriate Assistant Commissioner, who by a common order dated August 26, 1985, held the same view. Applicant went in revision against the said common appellate order to the West Bengal Commercial Taxes Tribunal, which by its order dated January 29, 1988, rejected the revis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... residue of raw cotton, having various commercial names, like comber, flat strip, droppings, card fly, roller flat, dirt, waste, collar waste, card sweepings, spinning sweepings, collar, mixed waste, willow dust, etc., and the commodity is derived from blow room, cardiac engine, comber, interslabbing and roving frames of cotton mills. Reference has been made to the Indian Standard Institution's specification for unteased white cotton waste, IS-6612-1979. Such reference has been made to show the distinction between cotton waste and soft waste cotton. Similarly, references have been made to the views of the National Textile Corporation, Directorate of Textiles and Handloom, Government of West Bengal and the Security Paper Mill under the Ministry of Finance, Government of India, in order to show the difference between the aforesaid two commodities. Soft waste cotton is claimed to be known as "tula" and is nothing but a variety of cotton, being an inferior variety, but cotton waste is a by-product of cotton. Applicant further contends that "cotton" in entry 38 of Schedule I has been used by the Legislature in the most general concept so as to comprehend all forms of cotton. There is al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tent only in accordance with law. We shall give such a direction at the conclusion of this judgment, irrespective of the question whether or not "soft waste cotton" is comprehended within "cotton" in entry 38 of Schedule I. 7.. On perusing the purchase vouchers made available to us, we find that most of the vouchers describe the goods by such names, as "comber", "droppings", "sweeping", "pulinda sweeping", "cotton sweeping", "card fly", "Wd. fly (Wd. stands for willowed)", fly, "willow dust", etc. It is not in controversy that the goods which are not described by the name "cotton waste" affixed thereto are not cotton waste. Similarly, it is common ground of both the parties that "cotton waste" is different from "cotton" and also from "soft waste cotton". There is also no dispute that the goods which are described by names other than "cotton waste" in the purchase vouchers are not cotton waste and rather are commodities known as soft waste cotton, as claimed by the applicant. The main case of the respondents is that "cotton waste" is not free from tax. There is no controversy over this, as it is also admitted on behalf of the applicant that "cotton waste" is taxable with effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d October 14, 1985, written by the Calcutta Office of the National Textile Corporation Ltd. (a Government undertaking) stating that the following qualities of soft wastes originate from their mills, viz., comber, flat strip, droppings-willow/unwillow, card fly-willow/unwillow, roller fly/dirt/ waste/clear waste, card sweepings/spinning sweepings, collar, mixed waste, willow dust and lionin droppings. The same letter goes on to say that all these items are under soft waste cotton which is exempted from tax. Although this letter is subsequent in point of time to the period of assessments in question, nevertheless it is a piece of evidence to show that in the trade circle such goods are known as soft waste of cotton and are treated as tax-free. The relevant portion of the Indian Standard Institution's: IS-6612-1979 issued in March, 1980, has been furnished by the applicant along with his affidavit-in-reply. It appears therefrom that cotton waste is obtained from yarn remnants and is collected from the ring, spinning, reeling, winding and warping departments of cotton textile mills. We have already seen that "cotton waste" is a commodity recognised in the trade circle as different fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is whether this little difference, whatever it is, makes soft waste of cotton a totally different commodity known as such in the trade circle or it still continues to be included in the expression "cotton", as understood in the trade circle. The applicant enclosed copies of Memo. No. 8426-CT dated May 3, 1988 and circular dated June 14, 1988 issued by the Commissioner of Commercial Taxes, West Bengal, the first one to the traders and the second one to the taxing officers. In those two communications it was stated that the question whether soft waste cotton is cotton, which is tax-free under section 6 of the 1941 Act, was examined at length. The Directorate of Hosiery, it was stated in the said circular, expressed the opinion that soft waste cotton is inferior quality cotton. It was further stated that soft waste cotton is not suitable for spinning but is still "cotton" and is used for bedding and other purposes. It was further mentioned in the circular that this variety consists of droppings, fly, etc., derived from the blow room, cardiac engine, etc., of the cotton mills. Finally, both in the said letter and in the said circular it was stated that "soft waste cotton" is a type ..... X X X X Extracts X X X X X X X X Extracts X X X X
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