Gupta Pump Store vs The State of Haryana and Others

I.S. Tiwana, J.—The short question that arises for consideration in these six writ petitions, C.W.P. Nos. 2080, 2081, 2085, 2740, 4741 of 1976 and 1155 of 1977, is as to how far cotton waste falls within the scope of cotton (ginned or unginned) as mentioned at No. 17 of the Schedule to the Punjab Agricultural Produce Markets Act, 1961 (hereinafter called the Act). It arises on the following facts.

The Petitioners who are carrying on their business at Panipat and Rohtak were served with notices under Sub-section (1) of Section 8 of the Act asking them to take out licences u/s 10 of the Act and to pay the market fee on the business and trade they were carrying on within the area of the Market Committees, Panipat and Rohtak by bringing cotton waste from outside the areas of the said Committees. The Petitioners impugned these notices primarily on the ground that cotton waste does not fall within the scope of ''cotton'' (ginned or unginned) as stated in the Schedule referred to above. This stand of the Petitioners is controverted by the Respondent-Committees on the plea that cotton waste is only a variety of cotton and thus would come within the scope of the word ''cotton'' as it occurs in the Schedule. Support for this stand is also sought from the definition of ''cotton'' as provided for in the Punjab Cotton Ginning and Processing Act, 1953.

After hearing the learned Counsel for the parties. I do not find any substance in the stand of the Respondent-Committees. The plea of the Petitioners is directly supported by at least two Division Bench judgments of Madras and Gujarat High Court respectively reported as Sapt Textile Products (India) Private Ltd. Vs. The State of Madras, and Arvind Mills Ltd. Vs. State of Gujarat, In the first judgment it has been observed as under:

Since the two terms "cotton" and "cotton waste" have come to be associated in the trade with distinct meanings and with distinct incidents of marketability, it will be more appropriate to confine the provision for single point levy in the Madras General Sales Tax Act, 1949 and the Rules framed thereunder in regard to the commodity known as cotton, to that form of it which has not entered a mill and come out of it as a waste product. Once it has entered a mill and been used in the process of manufacture and has emerged as a waste product, it has lost its character as cotton for the purpose of marketability and is a different commodity, namely, cotton waste.

In the second judgment, it has been held by the learned Judges of the Gujarat High Court as under:

Cotton waste is a bye product which comes out in the process of of manufacture as a result of raw cotton being subjected to various proccesses and cannot, therefore, be regarded as "raw cotton (whether ginned or unginned)" within the meaning of entry 1 of Schedule B to the Bombay Sales Tax Act, 1953 and since there is no other specific entry covering cotton waste, it must fall within the residuary entry 80 of Schedule B.

Though these observations have been made in the context of the provisions of the Sales Tax Act as applicable in the two States, yet that does not make any difference so far as the case in hand is concerned, because here I am only concerned with the definition or the scope of the word ''cotton'' as mentioned in the Schedule to the Act. As per these judgments ''cotton'' waste'' and ''cotton (ginned or unginned)'' are two distinct and separate items. The provisions of Punjab Cotton Ginning and Processing Factories Act from which support is sought by the learned Counsel for the Respondent also goes to support the case of the Petitioners. In this Act ''cotton'' has been defined in Clause (a) of Section 2 which is as follows:

''Cotton'' means ginned or unginned cotton or cotton waste.

''Cotton waste'' is defined in Clause (f) of this very section and reads as follows:

''Cotton waste'' means droppings, strippings, fly and other waste products of a cotton mill or of a cotton ginning factory or a cotton pressing factory, but does not include yarn waste.

Had ''cotton waste'' been a variety or formed part of ''cotton'' itself as has been maintained by the learned Counsel for the Respondent, there was no necessity or purpose in mentioning the ''cotton waste'' in the definition of ''cotton''. These definitions clearly point out that the legislature was conscious of the fact that cotton as such would not include cotton waste. Therefore, I do not find any merit in the stand of the Respondent Committees.

In the light of the discussion above, the impugned notices being totally without jurisdiction are quashed and these petitions stand allowed, but with no order as to costs.