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PETITIONER: STATE OF PUNJAB AND ORS.

       Vs.

RESPONDENT: M/S.  SHAKTI COTTON COMPANY

DATE OF JUDGMENT05/11/1971

BENCH: VAIDYIALINGAM, C.A. BENCH: VAIDYIALINGAM, C.A. REDDY, P. JAGANMOHAN MATHEW, KUTTYIL KURIEN

CITATION:  1972 AIR 1458            1972 SCR  (2) 289  1972 SCC  (1)  88  CITATOR INFO :  F          1976 SC 769  (1,3,4,5)

ACT: Punjab  General  Sales Tax Act, 1948 as amended  the  Punjab General  Sales  Tax  (Amendment and  Validation)  Act  7  of 1967--Cotton  purchased by dealer and subjected  to  ginning process--Resulting  products  i.e. cotton seeds  and  ginned cotton sold--Exemption under s.5(2)(a)(vi) whether available to  dealer--Cotton one of declared goods under s. 2(c)  read with  s. 14 of Central Sales Tax Act,  1956--Assessments  in respect of declared goods made under Punjab Act as it  stood on  April  1, 1960 held invalid--Validation under Act  7  of 1967--Reassessment under s. 11AA of Act as amended.

HEADNOTE: The  respondents  were registered dealers under  the  Punjab General Sales Tax Act, 1948.  In proceedings relating to the years  1960-61, 1961-62 and 1962-63 the question  that  fell for  consideration was whether their claim under s.,  5  (2) (a)  (vi) of the Act in respect of cotton purchased by  them and  later sold by them after ginning as ginned  cotton  and cotton  seeds could be allowed.  The  assessing  authorities disallowed  the  claim for exemption in  respect  of  cotton seeds  and  allowed  only partial exemption  in  respect  of ginned cotton.  The respondents filed writ petitions in  the Punjab  High  Court.   The petitions were  allowed  by  tile Single Judge who relied on a judgment of the same High Court in  Patel  Cotton Company Private Ltd. v.  State  of  Punjab wherein  it had been held that when a dealer  buys  unginned cotton  which is mixed with cotton seeds and  separates  the two,  by  process of ginning and proceeds to sell  both  the ginned cotton and the cotton seeds, the dealer in fact sells the entire goods which he had purchased.  Appeals were filed by the State before the Division Bench but were dismissed in limine.  However a certificate of fitness to appeal to  this Court was granted.  In the appeals filed by the State before this Court reliance was placed on the judgment of this Court in  M/s.   Chandulal Kishan Lal’s case wherein it  bad  been held  that  ginning  wag a  manufacturing  process  hod  the deduction  under  s. 5(2) (a) (vi) could not be  allowed  in respect  of  cotton  seeds  obtained  after  ginning.    The

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respondents  relied on the decision of this Court in  Bhawan Cotton  Mills  Ltd. and the charges made in the Act  by  the Punjab General Sales Tax (Amendment and Validation) Act 7 of 1967. HELD  :  In  Bhawani Cotton Mills Ltd. a  case  relating  to assessment  years 1961-62 and 1962-63, this Court held  that the scheme of levy of purchase tax under s. 2 (ff) read with s. 5 and specially the terms of s. 5(2) (a) (vi) of the  Act was  illegal in that contrary to the Provisions of s. 15  of the Central Sales Tax Act, 1956. no definite stage at  which the purchase tax in respect of cotton, a declared commodity, was  to be levied, had been indicated.  As a result of  this Judgment  sales  tax under the Act as it stood on  April  1. 1960  on  declared  goods  became  illegal  and  void.   The decision  in  M/s  Chandulal Kishorilal  was  given  without taking into account the decision in Bhawani Cotton Mills  or the  provisions  of  Act 7 of 1967.  Nor did  it  take  into consideration  all the points at issue between the  parties. The appeals of the State could not therefore be  straightway allowed on the basis of M/s.  Chandulal Kishorilal’s case. [298 G; 304 H-305 C] 290 Act 7 of 1967 was passed in order to retrospectively  remove the defects in the Act pointed out by this Court in  Bhawani Cotton  Mills.  The validity of the Amending Act was  upheld by  this Court in Rattan Lal & Co. s case.  The new s.  11AA added in the Act by s. 9 of the Amendment-Act .casts a  duty on  the  assessing authority, even without  any  application being  made  by the assessee in that behalf, to  review  all assessments  and reassessments made before the  commencement of  the Amendment Act in respect of declared  goods.   There was no controversy that the assessment orders in the present cases  had been made before the date of the commencement  of the  Amendment  Act.  If so the assessing authority  had  to exercise  his  jurisdiction  under s.  11AA.   It  was  also obligatory  on  his  part to vary and  revise  the  previous orders of assessment so as to bring them in conformity  with the  provisions of the Act as amended by the  Amendment  Act after  following the procedure indicated therein,  The  fact that  there was a judgment of this Court was no bar  to  the assessing  authority to do the duty cast upon him  under  s. 11AA.   This has been made clear by sub-s. (4) to  s.  11AA, which  makes the said sub-section subject to the  provisions of sub-ss. (1) to (3) of the section. [306 D-F] In  the  result  the cases must go  back  to  the  assessing authority  for fresh assessments to be made under  s.  11AA. In the fresh assessment proceedings the assessing  authority has to consider the matter in the light of the provisions of the Amendment Act incorporated in the Act-, and the decision of  this  Court  in M/s.   Chandulal  Kishorilal  could  not operate to the prejudice of the assessees. [307 B-G] Bhawani Cotton Mills Ltd. v. State of Punjab & Anr. [1967] 3 S.C.R. 577, applied. State of Punjab v. M/s.  Chandulal Kishorilal & Ors.  [1969] 3 S.C.R. 849, held not applicable Patel Cotton Co. Private Ltd. v. State of Punjab, [1964]  15 S.F.C.  865, State of Punjab v. M/s.  Patel Cotton Co.  Pvt. Ltd.  Bhainda, C.A.Nos. 1120/66 etc. dt. 18-4-67 Ratan Lai & Co.  v.  Assessing Authority, [1969] 2 S.C.R. 544  and  M/s. Aryavarta  Industries  P.  Ltd. v.  State  of  Punjab,  1970 Revenue Law Reporter 341, referred to.

JUDGMENT:

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CIVIL  APPELLATE JURISDICTION : Civil Appeals Nos. 2319  and 2320 of 1968 and 1466 to 1470 of 1969. Appeals from the judgments and orders dated July 23, May 17, May  28,  May 27, May 26, 1965 of the Punjab High  Court  in Letters Patent Appeals Nos. 182, 96, 127, 141, 145, 149  and 172 of 1965 respectively. V.  C.  Mahajan and R. N. Sachthey, for the  appellants  (in C.As.     Nos.  2319 and 2320 of 1968 and C.A. No.  1468  of 1969). V.  C.  Mahajan for R. N. Sachthey, for the  appellants  (in C.As.     Nos. 1466, 1467, 1469 and 1470 of 1970). S.  V.  Gupte, Hardev Singh and Ram Gopal  Singla,  for  the respondent (in C.A. No. 2319 of 1968). 291 Hardev  Singh and Ram Gopal Singla, for respondent (in  C.A. No. 2320 of 1968). Hardev Singh, for respondent (in C.A. No. 1466 of 1969). Charan  Das Garg, O.P. Sharma and K. S. Suri, for  the  res- pondent (in C.A. No. 1468 of 1968). The Judgment of the Court was delivered by Vaidialingam, J. These seven appeals, on certificate, are by the State of Punjab, challenging the judgments and orders of the   Letters  Patent  Bench  of  the  Punjab  High   Court, dismissing in limine the appeals filed by the State, against the  decisions of the learned Single Judge, either  quashing the orders of assessment of sales tax made by the  concerned Sales  Tax  Officer  or  directing  the  said  officers   to reconsider  the orders and pass fresh orders of  assessment. The  assessments that were challenged before the High  Court were  made  under  the Punjab General Sales  Tax  Act,  1948 (Punjab Act No. XLVI of 1948 (hereinafter to be referred  as the Act).  Civil Appeals Nos. 2320 of 1968 and 1468 of  1969 relate  to the assessment years 1960-61; Civil Appeals  Nos. 231,9 of 1968 and 1467, 1469 and 1470 of 1969 relate to  the assessment  years 1961-62 and Civil Appeal No. 1466 of  1969 relates to the assessment year 1962-63. The controversy related to the assessment to sales tax under the  Act, in respect of cotton, which admittedly is an  item of  "declared goods" within the meaning of s. 2 cl (c)  read with  s.  14 of the Central Sales-tax Act, 1956 (Act  74  of 1956) (hereinafter to be referred as the Central Act). As  the nature of the dealings and the approach made by  the assessing  officers in respect of the respondents,  who  are different  assessees, is the same, it is enough to refer  to the facts in Civil Appeal No. 2319 of 1968.  The  respondent M/s Shakti Cotton Company is a partnership firm carrying  on business as a registered dealer under the Act.  Amongst  its other business, the firm purchases kapas or unginned  cotton and  after ginning, sells cotton and cotton seeds.  For  the assessment  year 1961-62, the firm submitted a return  under the  Act  showing  its gross turnover  of  purchase  at  Rs. 23,76,452.68  n.p.  This  amount included  the  purchase  of unginned  cotton  i.e.  Kapas and the sales  were  shown  as having  been made to registered dealers and for inter  state trade  and commerce.  The firm claimed deduction,  from  its gross  turn-over, value of the entire quantity of cotton  it had purchased.  According to the firm, it was entitled to so deduct  the  purchase price under s. 5 (2) (a) (vi)  of  the Act.   It  appears  that there was originally  an  order  of assessment passed on June 30, 1962.  On appeal by the  firm, the Appellate Authority by, its 292 order  dated  February 4, 1963 remanded the  matter  to  the assessing authority for re-examination and  re-consideration of   the  original  order  of  assessment.   The   assessing

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authority,   Patiala  District,  took  up   the   assessment proceedings  afresh and after an examination of the  account books  and other vouchers produced by the firm  accepted  as correct   the  gross  turnover  returned  by   the   dealer. Regarding  the  various  deductions  claimed  by  the  firm, particularly  in respect of the purchase price  of  unginned cotton, which had been sold to registered dealers, it is not clear from the assessment orders as to how exactly the claim for deductions were either allowed or rejected.  Ultimately, the assessing authority fixed the taxable turn-over for  the purposes of purchase tax at Rs. 3,18,993.27 n.p. and  levied purchase tax on this amount at the rate of 2 per cent.   The assessment order was passed on September 26, 1963.  The firm filed  in the Punjab High Court Civil Writ No. 452  of  1964 challenging the order of assessment passed by the  Sales-tax Officer.   The  grievance of the firm, as is seen  from  the said  writ, is, that the assessing authority disallowed  the claim, made by it, for deduction of purchase price of ginned cotton  sold to the registered dealers and for  inter  state trade  and commerce.  The firm’s claim before the  assessing authority,  appears  to have been that if three  maunds,  of kapas  is  ginned,  it gives roughly  one  maund  of  ginned cotton, which if disposed of in toto should be equivalent to the  purchase  price  of three maunds  of  kapas  originally purchased.    The  assessing  authority  appears   to   have proceeded  on  the basis that out of the total  quantity  of unginned  cotton purchased by the firm, only 1/3rd  quantity of  the unginned cotton can be considered to have been  sold as  ginned cotton.  Deductions, according to  the  assessing authority,  under  s.  5 (2) (a) (vi) of the  Act  from  the purchase  turn-over  of unginned cotton should be  fixed  at 1/3rd of the total price paid for the unginned cotton.   The assessing authority has also proceeded on the basis that the amount  realised by the firm by sale of cotton seeds,  as  a result  of  ginning,  cannot  be  taken  into  account   for calculating  the  turn-over under s. 5 (2) (a) (vi)  of  the Act,  as the said material is something different from  cot- ton.   The firm had also challenged the order of  assessment that  the levy of sales tax on cotton, which is an  item  of "declared  goods  " under the Central Act,  is  illegal  and opposed to s. 15 of the Central Act, as no stage for levy of tax had been fixed.  As the Excise and Taxation Commissioner of Punjab had given instruction to the assessing authorities to  assess  cotton  in the manner shown  in  the  assessment order,  the  firm  averred that no useful  purpose  will  be served  by carrying the assessment orders in appeals  before the  Departmental Authorities.  It was pleaded that  as  the levy  was unconstitutional, the relief can be obtained  only from  the High Court and hence its jurisdiction under  Arts. 226 and 227 of the Constitution was invoked. 293 The  appellants  contested  the, writ  petition  on  various grounds But the material averment, which has to be noted  is to  the effect that the assessee was entitled  to  deduction only on the purchase of cotton sold by it as required  under s.  5 (2) (a) (vi) of the Act and that too on  the  purchase value  of the commodity sold and not on its sale price.   It was  further  averred that cotton seeds are  different  from cotton and the price realised by the sale of the former does not  qualify for deduction under the said provision  of  the Act as the cotton seeds are not the same commodity as cotton that  had been originally purchased.  Hence, it was  pointed out that the assessing authority had acted according to  law in  allowing  the deduction only on the  purchase  value  of cotton sold by the firm.

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The State further pleaded that the stage for levying  sales- tax  in respect of "declared goods" is indicated  under  the Act  and the firm is liable for payment of purchase  tax  on the  purchase  of cotton made by it subject  to  the  proper deductions allowable under s. 5 (2) (a) (vi) of the Act. At the time when the writ petition was heard by the  learned Single Judge of the High Court, there was already a decision of a Division Bench of the same High Court reported in Patel Cotton  Company  Private  Ltd. v. The State  of  Punjab  and others(1).  We  will  refer  later  to  the  scope  of  this decision.The, learned  Single  Judge, by  his  order  dated March 5, 1965held’that there is no indication in the order of assessment thatfull:deduction  permissible to a  dealer under  s.  5 (2) (a) (vi) of the Act, as laid  down  by  the Division Bench, in the above decision,. has been granted  to the  firm.  In this view, the learned Single  Judge  allowed the writ petition, and directed the Sales-tax Officer to re- decide  the matter and modify and make an assessment  order, in accordance with the law laid down in Patel Cotton Company Private  Ltd.(1). The State filed Letters Patent Appeal  No. 182  of 1965 under cl. (x) of the Letters Patent Act,  which was dismissed, in limine, by the Division Bench on July  23, 1965. In Civil Appeal No. 2320 of 1968 the order of assessment  is dated February 24, 1964.  The assessee filed Civil Writ  No. 454 of 1964 and the High Court passed a similar order in his favour on March 5, 1965.  The Letters Patent Appeal No.  196 of  1965 filed by the State was rejected in limine  on  July 23, 1965. In  Civil Appeal No. 1466 of 1969, the assessment  order  is dated March 10, 1964.  The assessee filed Civil Writ No. 810 of  1964.   The  learned Single Judge  by  his  order  dated February  3,  1965 allowed the writ petition  following  the decision  in  Patel’  Cotton  Company  Private  Ltd.(1)  and quashed the order of assess- (1) [1964] 15 S.T.C. 865. 294 ment.   The Letters Patent Appeal No. 127 of 1965  filed  by the State was dismissed in limine on May 17, 1965. In  Civil Appeal No. 1467 of 1969, the assessment  order  is dated March 9, 1964.  The assessee filed Civil Writ No.  608 of 1964 in the High Court.  The learned Single Judge by  his order  dated January 29, 1965 allowed the writ petition  and directed  the assessing authority to reconsider  and  modify the order of assessment in accordance with the law laid down by the Division Bench of the High Court.  The Letters Patent Appeal  No. 141 of 1965 filed by the State was dismissed  in Iimine on May 28, 1965. In Civil Appeal No. 1469 of 1969, the order of assessment is is  dated June 11, 1963.  Civil Writ No. 1599 of 1963  filed by  the assessee was allowed by the learned Single Judge  on February  26, 1965 and the assessing authority was  directed to modify the order of assessment according to the  decision of  the  High Court.  The Letters Patent Appeal No.  145  of 1965  filed by the State was dismissed in Iimine on May  27, 1965. In Civil Appeal No. 1469 of 1969, the order of assessment is dated  March 22, 1963.  Civil Writ No. 635 of 1963 filed  by the  assessee  was  allowed on February  26,  1965  and  the learned  Single Judge gave the same direction regarding  the assessment  Order  to  be reconsidered  and  modified.   The Letters Patent Appeal No. 149 of 1965 filed by the State was dismissed in limine on May 28, 1965. In Civil Appeal No. 1470 of 1969 the order of assessment  is dated  December 12, 1963.  Civil Writ No. 205 of 1964  filed

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by the asseesee was allowed by the High Court on January 29, 1965  and  similar directions were given  to  the  assessing authority.  The Letters Patent Appeal No. 172 of 1965  filed by the State was dismissed in limine on May 26, 1965. It  will  be  noted that in all the  above  appeals,  except Civil .Appeal No. 1466 of 1969, the assessing authority  had been  directed  to  reconsider  and  modify  the  orders  of assessment already passed by it.  It is only in Civil Appeal No. 1466 of 1969 that the order of assessment was quashed by the  learned  Single Judge of the High Court.   In  all  the appeals,  certificates have been granted by the High  Court. The High Court, while granting the certificates has observed that though Letters Patent Appeals were dismissed in limine, certificates are being granted in view of the fact that  the decision  in  Patel Cotton Company Private Ltd.(1),  on  the basis of which the present decision had been given, was  the subject  of  appeal  before this Court.   In  view  of  this consideration, certificates of fitness have been granted  by the Letters Patent -Bench.  We may also add that though  the question, regardin- (1) [1964] 15 S.T.C. 865. 295 the  legality  of  the assessment under  the  Act  as  being opposed to the Central Act, on the ground that no stage  for collection  of  tax has been fixed, was raised  by  all  the assessees,  that point was not adjudicated upon by the  High Court in any of these matters. Mr.  V. C. Mahajan, learned counsel for the  State,  pointed out  that  the, decision in Patel  Cotton  Company,  Private Ltd.(1)  which  was relied on by the High  Court,  has  been over-ruled  by this Court in State of Punjab and  others  v. M/s.  Chandulal Kishori Lal and others (2) . In consequence, he urged that all the State appeals will have to be  allowed and the assessment orders should be allowed to stand. On  the other hand, Mr. S. V. Gupte, learned counsel  appear in-  for  the respondent in Civil Appeal No.  2319  of  1968 whose  contentions  have been adopted by the  other  counsel appearing  for the respondents in other appeals, urged  that the decision of this Court, relied on by Mr. Mahajan, had no occasion  to consider the position regarding  collection  of sales  tax in respect of "declared goods" coming  under  the Central  Act, after the Act was amended by Punjab Act  7  of 1967.   He further pointed cat that neither  the  principles laid down by this Court in Bhawani Cotton Mills Ltd v. State of  Punjab and another(3); nor the effect of the  amendments made to the Act by Punjab Act 7 of 1967, regarding levy  and collection of sales tax in respect of "declared goods"  have been  considered  in  State of Punjab  and  others  v.  M/s. Chandulal Kishori Lal and others (2) . Mr. Gupte in this connection, relied on the various  aspects discussed  in Bhawani Cotton Mills Ltd.(3) and the  relevant provisions  of the Punjab General Sales Tax  (Amendment  and Validation) Act, 1967 (Act 7 of 1967) (hereinafter  referred to as Amendment Act). He further stressed that the Amendment Act  has  changed  the whole scheme  of  taxation  regarding "declared  goods" and a duty has been cast on the  assessing authority to reopen the assessment and pass fresh orders  in accordance  with  the  Amendment Act.  The  counsel  further pointed  out  that  State  of  Punjab  and  others  v.  M/s. Chandulal  Kishori  Lal and others(2) except  deciding  that cotton  seeds  do not come under "declared  goods",  had  no occasion to consider the language of s. 5 (2 (a) (vi) of the Act regarding how the deduction is to be allowed. It  is now necessary to consider the provisions of the  Act, as it stood on April 1, 1960. Even here we may say that  the

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entire  scheme  of the Act and the Rules as well as  of  the Central Act has been elaborately considered by this Court in Bhawani  Cotton Mills Ltd. (3). Hence it is  unnecessary  to cover the same ground in these appeals. It is enough to note that  the  expressions  "dealer"   "     goods" "prescribed" "purchase" "sale" "turnover" and (1) [1964] 15 S.T.C. 865. (2) [1969] 3 S.C.R. 849. (3) [1967] 3 S.C.R. 577: 296 "year" are defined in cls. (d), (e), (f), (ff), (h), (i) and (j)  of S. 2 respectively.  Item I of Schedule C of the  Act dealing with "Cotton" is as follows :               "(1)  Cotton,  that is to say,  all  kinds  of               cotton   (indigenous  or  imported)   in   its               unmanufactured   state,  whether   ginned   or               unginned, baled, pressed or otherwise, but not               including cotton waste." Section 2(c) of the Central Act defines "declared goods"  as " goods declared under S. 14 to be of special importance  in interState  trade  or  commerce." Section  14  declares  the various  goods referred to therein as of special  importance in  inter-State  trade or commerce.  Therefore,  it  follows that  those goods are "declared goods" under S. 2(c) of  the Central  Act.  Item 11 of S. 14 of the Central  Act  dealing with  cotton is identical with Item I of Schedule C  of  the Act.   It is also necessary to note that the  definition  of "sale"  in S. 2(h) of the Act, excluded goods  specified  in Schedule C and that the expression "purchase" under s. 2(ff) took  in  the  goods specified in Schedule  C  of  the  Act. Section 5 of the Act dealt with the levy of tax on the turn- over  of a dealer at the rates mentioned therein  and  other consequential  matters.   Sub-section  (2)  dealt  with  the taxable turnover, as well as the various deductions which  a dealer  is eligible to claim in the computation of the  said taxable  turnover.  The claim for deduction was made by  the assessees  before  us under S. 5 (2) (a) (vi)  of  the  .Act which is as follows :               "5  (2)  In this Act the  expression  "taxable               turn-over means that part of a dealer’s  gross               turnover during any period which remains after               deducting therefrom--               (a)   his turnover during that period on-               (vi) the purchase of goods which are sold  not               later  than six months after the close of  the               year, to a registered dealer, or in the course               of  inter-state trade or commerce, or  in  the               course of export out of the territory of India               :               Provided that in the case of such a sale to  a               registered  dealer,  a  declaration,  in   the               prescribed form and duly filled and signed  by               the  registered dealer to whom the  goods  are               sold,  is  furnished by  the  dealer  claiming               deduction." Section  15  of  the Central Act  imposes  restrictions  and conditions in regard to tax on sale or purchase of  declared goods  within a State.  Section 15(a) placing a  restriction on the rate of 297 tax  as well as a prohibition regarding such  collection  at more than one stage is as follows :               "  15.  Every sales tax law of a State  shall,               in  so  far as it imposes  or  authorises  the               imposition of a tax on the sale or purchase of               declared  goods, be subject to  the  following

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             restrictions and conditions, namely :-               (a) the tax payable under that law in  respect               of  any sale or purchase of such goods  inside               the  State shall not exceed three per cent  of               the  sale or purchase price thereof, and  such               tax  shall  not  be levied at  more  than  one               stage.               *     *       *      *      *     * We  have broadly outlined the scheme of the Act, as well  as the  Central  Act.  There is no controversy that  cotton  is liable  to purchase tax under the Act.  It is now  necessary to advert to the decision of the Punjab High Court in  Patel Cotton Company Private Ltd.(1). The assessee therein claimed that  out of the unginned cotton, which they  had  purchased and  in  respect  of which they had  become  liable  to  pay purchase tax, certain quantities of ginned cotton as well as cotton  seeds  obtained  after ginning   had  been  sold  to registered  dealers within the prescribed period or sold  in the course of inter-State trade and commerce.  They  further claimed  that  the  purchase price of  those  quantities  of ginned cotton and cotton seeds-so sold should be deducted in calculating the taxable turn-over under s. 5 (2) (a) (vi) of the  Act.  The assessing authority allowed the deduction  of the sale price (as against the purchase price) of the ginned cotton sold to registered dealers as also the sale price  of the  ginned  cotton  exported out of India or  sold  in  the course  of  inter-State trade- or commerce.   The  Sales-tax Officer,  however,  declined  to  allow  any  deduction  for similar  sales  on  cotton seeds.   The  assessee  contended before  the High Court that the sale of cotton seeds, was  a sale  of the goods purchased by them, in respect  of  which, purchase  tax was payable and since the sales were  made  to registered  dealers or in the course of  inter-State  trade, the  taxable turnover should be determined  after  deducting the  purchase  price  of  the goods  sold  from  the  gross- turnover. On  behalf  of  the State, it was  contended  that  unginned cotton  and  ginned cotton are two different things  and  if unginned cotton is purchased and purchase tax paid on it and later on the cotton is ginned and sold, no part of the goods purchased can be considered to have been sold.  It was urged that  cotton  seed  is a different  thing  from  cotton  and therefore the sale price of cotton seeds cannot be  deducted under s. 5 (2) (a) (vi). (1) [1964] 15 S.T.C. 865. 298 The High Court held that no manufacturing process is involv- ed  in ginning cotton and in the process of ginning  no  new commodity is created.  The High Court further held that when a  dealer buys unginned cotton, which is mixed  with  cotton seeds  and  separates  the two, by process  of  ginning  and proceeds  to  sell  both the ginned cotton  and  the  cotton seeds,  the dealer in tact sells the entire goods  which  he had  purchased.  As deduction under S. 5 (2) (a) (vi) is  to be the turn-over on the purchase of goods which are sold and as  the goods (ginned cotton and cotton seeds) sold are  the same  as  purchased,  the  dealer  is  entitled  to  a  full deduction.   As  the assessing authority has  not  made  the assessment  in accordance with the principles laid  down  by the High Court, the order of assessment was quashed and  the assessing authority was directed to make a fresh assessment, in  accordance  with the decision of the High  Court.   This decision was rendered on May 14, 1964. Certain other decisions of the Punjab High Court, similar to the  one  in Patel Cotton Company Private Ltd.(1)  were  the

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subject  of appeals and they were disposed of by this  Court on  February 27, 1969 in State of Punjab and others v.  M/s. Chandulal Kishori Lal and others (2)  to which we will refer later. In the mean while, certain other dealers dealing in  cotton, had challenged before the Punjab High Court the levy of pur- chase tax under the Act on the ground that the levy  opposed to  the  Central Act.  One of the contentions  was  that  no stage  for collection of the tax, as is mandatory under  the Central  Act, has been provided for in the Act.  The  Punjab High  Court,  by its judgment and order dated  November  23, 1965  dismissed the writ petitions filed by  the  assessees. The  assessee,  Bhawani Cotton Mills Ltd.(3)  came  to  this Court  in  appeal on certificate.  This Court after  a  very elaborate  and exhaustive consideration of the Act. as  well as  the Central Act, by majority, upheld the  contention  of the assessee and held in Bhawani Cotton Mills Ltd. v.  State of Punjab and another(3) that the scheme of levy of purchase tax  under S. 2 (ff) read with s. 5 and specially the  terms of s. 5 (2) (a) (vi) of the Act is illegal in that, contrary to  the provisions of s. 15 of the Central Act, no  definite stage  at  which the purchase tax in respect  of  cotton,  a declared  commodity,  is to be levied, has  been  indicated. The  judgment and order of the High Court were reversed  and the  assessment orders quashed.  This decision was  rendered on  April  10, 1967.  The years with which  this  Court  was concerned,   in  the  said  decision,  were  the  years   of assessment 1960-61 and 1961-62. The decision in Patel Cotton Company Private Ltd.(1) was the subject of appeals in this Court in The State of Punjab  and others V. M/s.  Patel Cotton Co. Pvt.  Ltd., Bhatinda and (1) [1964] 15 S.T.C 865 (2) [1969] 3 S.C.R. 849. (3)  [1967] 3 S.C.R. 577. 299 other(1).  This Court, by its judgment dated April 18,  1967 did  not think it necessary to consider the  correctness  or otherwise  of  the  decision  of the  High  Court  that  the assessees,  when they sold ginned cotton and  cotton  seeds, had sold the same commodity that had been purchased by them. The State appeal was dismissed on the short ground that  the levy of purchase tax was opposed to the Central Act, as held by this Court in Bhawani Cottoni Mills Ltd. (2) . Though the High  Court  had directed fresh assessments to  be  made  in accordance  with its decision, this Court, however,  quashed the orders of assessment also. We have already indicated that the certificates were  issued in  the appeals before us by the High Court in view  of  the fact  that  the  decision in Patel  Cotton  Company  Private Ltd.(:’)  was  the subject of appeal in  this  Court.   That appeal was disposed of in the manner, referred to above. In  view  of the decision of this Court  in  Bhawani  Cotton Mills  L.t.d (2) two Ordinances were issued by the  Governor of Punjab, Ordinances Nos.  1 and 12 of 1967, dealing, among other matters, with the levy of sales-tax regarding declared goods.  These Ordinances were replaced by the Amendment Act. which  received the assent of the Governor on  December  29, 1967  and  published in the State Gazette  on  December  30, 1967.  Certain provisions of the Amendment Act, in so far as they relate to declared goods, have to be referred to. Section 2(1) incorporated in the Act after cl. (d) of s. 2 a new  clause defining "declared goods".  The new clause  (dd) was as follows :               "(dd)  "Declared goods" means  goods  declared               under section 14 of the Central Sales Tax Act,               1956,  to  be of special importance  in  inter

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             State trade or commerce." We have already referred to the fact that cl. (e) of s. 2 of the  Act defined the expression "goods".  Section 5  of  the Amendment  Act, incorporated various amendments in s.  5  of the Act as follows :               "Section  5. Amendment of section 5 of  Punjab               Act 46 of 1948.  In section 5 of the principal               Act-               (a)   in sub-section (1)-               (i)   in   the  Second  proviso,  the   words,               brackets,  and figures "as defined  in  clause               (c) of section 2 of the Central Sales Tax Act,               1956, and such tax shall not be levied on  the               purchase  or sale of such goods at  more  than               one stage" shall be omitted (1)  C.A.S Nos. 1120, 1123 & 1214 of 1966 decided  on  18-4- 1967. (2)  [1967] 3 S.C.R. 577. (3) [1964] 15 S.T.C. 865. 0Sup CI/72 300               (ii)  after the second proviso, the  following               proviso shall be inserted, namely :               "Provided  further that with effect  from  the               date  of  commencement of the  Punjab  General               Sales    Tax   (Amendment   and    Validation)               Ordinance,  1967,  the rate of tax  shall  not               exceed  three paise in a rupee "in respect  of               any declared goods";               (b)  in  sub-section (1-A) for the  words  "in               respect of such goods the words "in respect of               such goods other than declared goods" shall be               substituted   and  be  deemed  to  have   been               substituted  with effect from the 16th day  of               December, 1965."               (c)   after  sub-section  (2)  the   following               subsection shall be inserted with effect  from               the 1st day of October, 1958, namely :-               "  (3) Notwithstanding anything  contained  in               this Act-               (a) in respect of declared goods, tax shall be               levied at one stage and that stage shall 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 this 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  this               Act;               (b) the taxable turnover of any dealer for any               period  shall not include his turnover  during               that  period  on  any  sale  or  purchase   of               declared  goods  at any stage other  than  the               stage referred to in sub-clause (i) or as  the               case may be, sub-clause (ii) of clause (a)." Section 9 of the Amendment Act incorporated a new section 11 AA in the Act, which is as follows :               "11AA.  Review of certain assessments etc.  of                             tax on declared goods-               (1) Notwithstanding anything contained in this               Act, the Assessing Authority shall (whether or               not  an  application is made to  him  in  this               behalf),   review  all  assessments  and   re-               assessments  made before the  commencement  of               the  Punjab General Sales Tax  (Amendment  and               Validation)  Act, 1967 in respect of  declared

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             goods and make such order varying or  revising               the 301               order previously made as may be necessary  for               bringing.  the  order  previously  made   into               conformity with the provisions of this Act  as               amended  by  the  Punjab  General  Sales   Tax               (Amendment and Validation) Act, 1967 :               Provided  that no proceeding for review  shall               be   initiated  without  giving   the   dealer               concerned a notice in writing of not less than               thirty days.               (2)  Any  dealer on whom a  notice  is  served               under sub-section (1) may within- thirty  days               from  the  date  of  receipt  of  such  notice               intimate in writing the assessing authority of               his  intention to abide by the  assessment  or               re-assessment sought to be reviewed and if  he               does  so,  the assessing authority  shall  not               review such assessment or re-assessment  under               this section.               (3) No order shall be made under this  section               against any dealer without giving such  dealer               a reasonable opportunity of being heard.               (4) Notwithstanding anything contained in  any               judgment,  decree  or order of  any  court  or               other authority to the contrary but subject to               the  provisions of the foregoing  sub-sections               any   assessment,   re-assessment,   levy   or               collection  of any tax in respect of  declared               goods  made or purporting to have  been  made,               and  any  action  or thing taken  or  done  or               purporting  to  have  been taken  or  done  in               relation  to such  assessment,  re-assessment,               levy  or collection, under the  provisions  of               this Act before the commencement of the Punjab               General  Sales Tax (Amendment and  Validation)               Act,  1967 shall be as valid and effective  as               if  such  assessment,  re-assessment  levy  or               collection  or action or thing had been  made,               taken or done under this Act as amended by the               Punjab   General  Sales  Tax  (Amendment   and               Validation) Act, 1967." From  the various amendments made by the Amendment  Act,  in the  Act, the following aspects broadly emerge : There is  a definition  of  "declared goods" under  s.  2(dd).   Certain omissions were made in the second proviso of the Act in view of  the  specific definition of "declared  goods"  under  s. 2(dd) and also in view of the fact that the stage, at  which tax  is  to  be levied in respect  of  "declared  goods"  is specifically  dealt  with  under  the  new  sub-section  (3) incorporated in section 5. The third proviso incorporated in sub-section (1) of s. 5 of the Act provided that with effect from  the date of the Ordinance No. 12 of 1967, the rate  of tax in respect of declared goods was not to exceed 3 302 pies  in a rupee.  In sub-section ( 1-A) of s. 5 of the  Act "declared goods" have been excluded from the reference  made therein  to "such goods".  This amendment is also deemed  to have come into effect from December 16, 1965.  The new  sub- section (3) added to S. 5 of the Act was to have effect from October 1, 1958.  Under the new sub-section (3), in  respect of  declared goods, the stage of levy either in  respect  of purchase or sale has also been definitely fixed.  Under  cl. (b)  of  S.  3,  certain turnovers in  respect  of  sale  or

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purchase  of declared goods, as referred to therein,  cannot be included in the taxable turn-over.  The new section 11 AA makes  it obligatory on the assessing authority,  under  the circumstances  mentioned therein, to review all  assessments and re-assessment made before the commencement of the Amend- ment  Act  in respect of declared goods.  There is  also  an obligation  cast  on the officer to make orders  varying  or revising  the  previous  orders, so as to  bring  them  into conformity with the provisions of the Act, as amended by the Amendment  Act.   Even the provisions contained  under  sub- section  (4)  of  S. 11 AA have been  made  subject  to  the provisions of sub-sections (1) to (3) of the said section. It will be seen from the amendments, referred to above, that an  entirely new scheme, so as to say, has been  evolved  in the matter of assessment to sales tax of declared goods.  In the case before us, we are concerned with "cotton" which  is an  item of "’declared goods" under the Central Act.   There is  no  controversy  that purchase tax is to  be  levied  in respect  of the said commodity.  Under the  new  sub-section (3)  cl. (a) sub-clause (2) of S. 5 of the Act, in the  case of purchase tax, the levy is to be at the stage of  purchase of  such goods by the last dealer.  Therefore. the  question whether  the assessee comes under this clause, for  levy  Of purchase ’Lax, which is a question of fact, will have to  be investigated. The  Amendment Act itself was again challenged  before  this Court   in  Writ  Petition  filed  under  Art.  32  of   the Constitution.  We will now refer to the decision in the said writ  petition of this Court in Rattan Lal and  Company  and another  v. The Assessing Authority and another(1)  rendered on  October 29, 1968.  This Court, in the said decision  had to  consider the attack made by certain assessees  regarding the  validity of the Amendment Act.  The contention  of  the assessees was that the same infirmities, pointed out by this Court  in Bhawani Cotton Mills Ltd.(2) Still exist  even  in the Amendment Act and hence the levy of sales tax on  cotton was  illegal.  After a reference to the infirmities  pointed out  in  the Act as it stood on April 1.  1960,  in  Bhawani Cotton Mills Ltd.(2) and after a reference to the  Amendment Act, the contention of the assessees was rejected and it was held that the (1) [1969] 2 S.C.R. 544. (2) [1967] 3 S. C. R. 577. 303 Amendment  Act cannot be struck down on the  grounds  raised ,by  the  assessees.   This  Court  finally  held  that  the Amendment  Act was valid and the retrospective effect  given to  it was also equally valid and that the new s.  11AA  was not  discriminatory.   In  this  view,  the  attack  on  the Amendment Act was rejected and the writ petition  dismissed. From  the  decisions of this Court in Bhawani  Cotton  Mills Ltd.(1), The State of Punjab and others v. M/s Patel  Cotton Co. Pvt.  Ltd.  Bhatinda and others etc. (2), and Rattan Lal and  Company and another(3), it is clear that levy of  sales tax, under the Act as it stood on April 1, 1960 on  declared goods is illegal and void. We have already referred to the fact that certain  decisions of the Punjab High Court, which had taken a view similar  to the  one in Patel Cotton Company Private Ltd. (4 )were  also subject Of appeals in this Court.  They were disposed of  on February 27, 1969 by the judgment of this Court in State  of Punjab   and  others  v.  M/s  Chandulal  Kishori  Lal   and others(5). The  claim made by the assessees before the High  Court  was that in calculating the taxable turn-over under s. 5 (2) (a) (vi)  of the Act, as it stood on April 1,  1960,  deductions

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must be made on the purchase price of unginned cotton, which has been sold later as ginned cotton and cotton seeds.   The High  Court  had  accepted this contention.   The  State  of Punjab  had filed the appeals in this Court.  This Court  in the  above, decision, accepted the contention of  the  State that ginning process is a manufacturing process and that  it is  by such a manufacturing process that the cotton and  the cotton seeds are separated.  This Court further held that it is not correct to say that the seeds so separated, is cotton itself  or  part of the cotton.  It is the further  view  of this  Court  that  they are two  distinct  commercial  goods though before the manufacturing process the seeds might have been a part of the cotton itself.  It was further held  that the  contention  of the assessees that the  sale  of  cotton seeds must be treated as a sale of declared goods under  the Central Act, cannot be accepted.In this view the decision of the High Court was set aside and the appeal of the State was allowed.  The orders of the assessing authority declining to grant  deduction  in  respect of cotton seeds  sold  by  the assessees to registered dealers were confirmed. In this decision there is a reference to the decision of the High Court in Patel Cotton Company Private Ltd.(4). According to Mr. Mahajan, the decision of this Court in  the State  of Punjab and others v. M/s.  Chandulal  Kishori  Lal and  others(5) having over-ruled the decision of the  Punjab High  Court in Patel Cotton Company Private Ltd.  (4  though not  directly,  all the appeals before us must  be  allowed. Prima  facie  and  on a superficial  consideration,  it  may appear that the con- (1) [1967] 3 S.C.R 577 (2) C. A. S. NOS. 1120.1123 & 1214 of 1966 decided on  18-4- 1967. (3) [1969] 2 S. C. R. 544. (4) [1964] 15 S.T.C. 865. (5) [1969] 3 S.C R. 849. 304 tention of Mr. Mahajan is well-founded.  Going by the actual decision of this Court in the State of Punjab and others  v. M/s  Chandulal  Kishori Lal and others(1), it must  be  said that  the  principle laid down by the Punjab High  Court  in Patel  Cotton  Company Private Itd.(2), which  decision  has been  relied on by the High Court in the appeals before  us, must  be considered to have been over-ruled.  But there  are difficulties  in  accepting the contention of  Mr.  Mahajan, that  in  view  of this circumstance,  the.   State  appeals before us must be allowed. We have already referred to the fact that the levy of  sales tax  under the Act as it stood on April 1, 1960, on  cotton, which is an item of "declared goods" was struck down by this Court in Bhawani Cotton Mills Ltd.(3). Certain provisions of the Act were also struck down as violative of the provisions of the Central Act.  It was in- consequence of the  decision of  this  Court  in Bhawani Cotton Mills  Ltd.(3)  that  the Amendment  Act,  which was preceded by the  two  Ordinances, referred  to  above,  came  to be  enacted.   We  have  also referred to the fact that the scheme of assessment regarding declared goodshas been changed and altered by the Amendment Act. Whenthe Amendment Act was again challenged before this Court, the Constitution Bench in Rattan Lal and Company  and another(4)  has approved the decision in  Bhawani  Cotton Mills Ltd.(3) and accepted the position that under the  Act, as  it  stood  on April 1, 1960, sales  tax  in  respect  of declared goods could not be levied.  Further it was  pointed out  in  Rattan  Lal and Company and another  (4)  that  the infirmities that existed in the Act. as it stood on April 1,

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1960 had been removed and the Amendment Act was valid.  With great  respect to the learned Judges, who decided the  State of  Punjab  and  others v. M/s  Chandulal  Kishori  Lal  and others(1),  it  must  be held that there  is  absolutely  no reference  to the decisions of this Court in Bhawani  Cotton Mills Ltd.(3) and Rattan Lai and another (4) . Nor is  there any  reference  to the decision in The State of  Punjab  and others  v.  M/s  Patel Cotton Co. Pvt.  Ltd.   Bhatinda  and others  etc.  (5)  which were appeals  filed  by  the  State directly challenging the decision of the High Court in Patel Cotton  Company Pvt.  Ltd. (2) . All these three  decisions, as  mentioned  by us earlier, have uniformly  held  That  no sales tax can be levied under the Act, as it stood on  April 1,  1960  in respect of declared goods.  This Court  in  The State of Punjab and others v. M/s Chandulal Kishori Lal  and others(1) had to deal with a case of assessment of sales tax under the Act, as it originally stood, in respect of cotton, which is an item of declared goods, for the assessment  year 1961-62.   Such  an assessment for the said  year  had  been struck  down  as illegal and void in  Bhawani  Cotton  Mills Ltd.(3) and in The State of Punjab and others v. (1) [169] 3 S.C R 849.    (2) [1964] 15 S. T. C. 865. (3) [1967] 3 S.C.R. 577.  (4) [1969] 2 S.C.R. 544. (5) C.A.s. Nos.1120,1123 & 1214 of 1966 decided on 18-4-67. 305 M/s Patel Cotton Co. Pvt.  Ltd.  Bhatinda and others etc.(1) The, decision in State of Punjab and others v. M/s Chandulal Kishori  Lal  and others(2) has, however, proceeded  on  the basis  that  all the relevant assessments, with  which  they were  concerned, had to be dealt with under the Act,  as  it stood  on  April 1, 1960 and that has to be applied  to  the declared goods. On  such  a  reasoning, s. 5 (2) (a) (vi)  of  the  Act  was applied  and  the  assessment  held  to  be  valid  and  the deductions  declined by the officer were approved.   In  our opinion,  the decision in the State of Punjab and others  v. M/s  Chandulal Kishori Lal and others(2) cannot  enable  the appellant, State, to have the appeals before us straightaway allowed.  That will amount to ignoring the decisions of this Court  in  Bhawani  Cotton Mills  Ltd.(3).  Rattan  Lal  and Company and another(4) and The State of Punjab and others v. M/s  Patel  Cotton  Co.  Pvt.   Ltd.   Bhatinda  and  others etc.(1). More important than all these, is the circumstance, that  by accepting  the  contention  of  Mr.  Mahajan,  we  will   be completely  ignoring  the provisions of  the  Amendment  Act which,  we  have  already said, has  evolved  a  new  scheme regarding  the  levy  of sales tax in  respect  of  declared goods.   The decision in the State of Punjab and  others  v. M/s  Chandulal Kishori Lal and others(") can at the most  be considered  to  have  decided  that  cotton  seeds  are  not declared  goods and that it is by the manufacturing  process that cotton and cotton seeds are separated.  As the Act,  as amended  by the Amendment Act, has to be applied in  respect of  assessment of sales tax on declared goods, the  decision in  the State of Punjab and others v. M/s Chandulal  Kishori Lal  and  others(2),  is,  in our opinion,  no  bar  to  the assessees urging their objections regarding the validity  of the  orders  of  assessment.  Further,  this  Court  had  no occasion  to consider in the State of Punjab and  others  v. M/s  Chandulal  Kishori  Lal and others  (2),  whether  when unginned  cotton has been purchased and the entire  quantity of ginned cotton obtained therefrom has been sold, the price obtained from the latter is "a turn-over on the purchase  of goods which are sold" within the meaning of s.  5(2)(a)(vi),

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even on the basis that the said provision applies.  Further, in the said decision, this Court had no occasion to consider the question whether purchase price or sale price has to  be taken  into account under cl. (vi), nor had it  occasion  to consider the question whether the mere sale of cotton seeds, even though the entire ginned cotton obtained from  unginned cotton  originally purchased, had been sold, will  make  any difference  in such circumstances.  Ail these  matters  have neither been adverted to nor considered by this Court in the said decision.  In fact, if we may say so with respect, when an assessment tinder the Act, as it stood on April (1) C.A.s. NOs. 1120,1123 & 1214 of 1966 decided on 18-4-67. (2) [1969] 3 S.C.R.849.        (3)[1967] 3 S.C.R.577. (4) [1969] 2 S.C.R.544. 306 1, 1960 in respect of declard goods is illegal, the question what  deduction, if any, should or should not be allowed  in calculating  the turnover in respect of such  goods,  should not at all arise. From  the discussions contained above, it follows  that  the assessments  before us, cannot be confirmed on the basis  of the  Act,  as  it stood on April 1, 1960, as  urged  by  Mr. Mahajan.  That contention is opposed to the decision of this Court in Bhawan.  Cotton Mills Ltd.(1). It  may also be pointed out that even in the writ  petition, the assessees have challenged that the levy of sales tax  is illegal,  as no stage has been fixed as is  mandatory  under the  Central  Act.   No  doubt,  the  High  Court  has   not considered this question, as it was satisfied that the  writ petitions can be disposed of on the basis of the decision in Patel Cotton Company Private Ltd.(2). We have already referred to the elaborate provisions made in the new section 11AA added in the Act by s. 9 of the  Amend- ment  Act.   The new section casts a duty on  the  assessing authority,  even without any application being made  by  the assessee  in that behalf, to review all assessments and  re- assessments  made before the commencement of  the  Amendment Act  in respect of declared goods.  There is no  controversy that the assessment orders, in the cases before us, have all been  made before the date of commencement of the  Amendment Act.   If  so, the assessing authority has to  exercise  his jurisdiction  under s. 11AA.  It is also obligatory  on  his part to vary or revise the previous orders of assessment  so as  ’Lo bring them in conformity with the provisions of  the Act  as  amended by the Amendment Act, after  following  the procedure  indicated  therein.   The fact that  there  is  a judgment  of  a  Court  is also  no  bar  to  the  assessing authority to do his duty cast upon him under s. II AA.  This has  been  made clear by sub-section (4) to s.  11AA,  which makes the said subsection Subject to the provisions of  sub- sections (1) to (3) of the section. In view of the specific provisions contained in s.11 AA,  we do  not  think  it necessary to  consider  and  express  any opinion   regarding  the  contention  of  Mr.  Gupte.    The assessees are entitled to raise all objections available  to them  in law or on facts in respect of declared goods,  when the assessing authority takes action tinder S. II AA of  the Act,  as he is bound to do.  But we .make it clear  that  in the  fresh assessment proceedings, the  assessing  authority has  to consider the matter, in the light of the  provisions of the Amendment Act incorporated in the Act; and the (1) [1967] 3 S.C.R. 577. (2) [1964] 15 S.T.C. 865. 307 decision of this Court is the State of Punjab and others  v.

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M/s Chandlal Kishori Lal and others(1) cannot operate to the prejudice  of the assessees. We have already made  it  clear that   the  said  decision  has  decided  the  question   of assessment ofdeclared  goods under the provisions  of  the Act, as they stood onApril 1,1960, which provisions have no application for levy ofsales   tax  in   respect   of declared goods as held by this Court in Bhawani Cotton Mills Ltd.  (  2  )  and  two  other  cases,  referred  to  above. Therefore,  the  fresh revised assessments will have  to  be made,  without  reference to the decision in  the  State  of Punjab   and  others  v.  M/s  Chandulal  Kishori  Lal   and others(1),  which  decision  has no  application,  when  the question has to be now decided, on the basis of the Act,  as amended by the Amendment Act.’ We have already pointed out that in all the appeals,  except in  Civil Appeal No. 1466 of 1969, the learned Single  Judge has directed the assessing authority to reconsider and  vary the order of assessment.  That direction has been  confirmed by  the  Letters Patent Bench in the  said  appeals.   Those directions, in our opinion, do not require any  interference by  this  Court,  except to make it  clear  that  the  fresh assessments  will  have  to be made under s. 11  AA  of  the Amendment  Act, and subject to the directions  contained  in this judgment. Regarding Civil Appeal No. 1466 of 1969, the learned  Single justified  in quashing the assessments order in  toto.   The proper  confirmed  by the Letters Patent  Bench  in  Letters Patent  Appeal  No. 127 of 1965.  In our opinion,  the  High Court was not justified in quashing the assessment order  in toto.   The proper direction should have been, as  given  in other  writ  petitions,  namely,  to  direct  the  assessing authority  to reconsider the assessment  order.   Therefore, the order of the learned Single Judge in Civil Writ No.  810 of  1964, as confirmed in Letters Patent Appeal No.  127  of 1965, quashing the order of assessment dated March 10, 1964, will  have  to be set aside.  The assessing  authority  will reconsider  and revise the assessment order dated March  10, 1964  in accordance with the provisions of s.. 11AA  of  the Act  and  pass a revised order of assessment  in  conformity with the Act, as amended by the Amendment Act. Before  closing, we must mention that Mr. Gupte, brought  to our  notice a decision of the Punjab High Court reported  in M/s  Aryavarta Industries Pvt.  Ltd. v. The State of  Punjab and another (3) regarding as to how the assessment is to  be made in respect of declared goods, after the Amendment  Act. As we (1)  [1969] 3 S.C.R 849. (3)  [1970] Revenue Law Reporter 341. (2)  [1967] 3 S.C.R. 577. 308 have  directed  the  assessing  authority  to  exercise  his jurisdiction under s. II AA, we do not think it necessary to deal with this decision any further. Subject to the directions and observations contained  above, Civil  Appeals  Nos. 2319 and 2320 of 1968 and  1467,  1468, 1469 and 1470 of 1969 are dismissed.  Civil Appeal No.  1466 of  1969 is allowed to the limited extent of  modifying  the order of the High Court, as indicated earlier.  Parties will bear their own costs in all these appeals. G.C.                          C.A. No. 1466 of 1969 allowed                        in part.  Other appeals dismissed 309

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