LexM/S MAMTA SURGICAL COTTON INDUSTRIES, RAJASTHAN versus ASSISTANT COMMISSIONER (ANTI-EVASION), BHILWARA, RAJASTHAN
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[2014] 2 S.C.R. 589 M/S MAMTA SURGICAL COTTON INDUSTRIES, A RAJASTHAN V. ASSISTANT COMMISSIONER (ANTI-EVASION), BHILWARA, RAJASTHAN (Civil Appeal No. 7084 of 2005 etc.) B JAN~ARY 23, 2014 [H.L. DATTU AND S.A. BOBDE, JJ.] RAJASTHAN SALES TAX ACT, 1994: C s. 2 (27) - 'Manufacture' - 'Surgical cotton' processed from cotton - Assessment Year 1992-93 -- Entry no. 16 - "Cotton, that is to say, all kinds of cotton (indigenous or imported),· whether ginned or unginned, baled, pressed or 0 otherwise including Cotton waste" -- Assessee purchasing raw cotton by paying tax at the rate of 4 per cent - Processing it into 'surgical cotton' - Held: "Surgical cotton" is a separately identifiable and distinct commercial commodity manufactured out of raw cotton and, therefore, ceases to be cotton under Entry 16 - In the instant case, after going through the various E steps that are carried out by assessee for getting surgical cotton from raw cotton, it can be certainly said that cotton has undergone a change into a new commercially identifiable commodity which has a different name, different character and different use - The process of transformation is not merely F processing to improve quality or superficial attributes of the raw cotton - Cotton looses its original form and is marketed as a commercially different and distinct product - As regards the claim of set off against tax paid on raw cotton, assessee is at liberty to raise the question before appropriate authorities G in accordance with law -- Judgment and order passed by High court in so far as Assessment Year 1992-93 is concerned. confirmed. 589 H 590 SUPREME COURT REPO~TS [2014] 2 S.C.R. A s.2(27) - 'Manufacture' - Held: "Manufacture" can be said to have taken place only when there is transformation of raw materials into a new and different article having a different identity, characteristic and use - While mere improvement in quality does not amount to manufacture, when the change or B a series of changes transform the commodity such that commercially it can no longer be regarded as the original commodity but recognised as a new and distinct article. Entry No. 16 - Surgical cotton' -- Assessment Years 1993-94 to 1998-99 - Held: In' the year 1993, by an C amendment notification F.4 (56) FD!Gr.IV/82-2 (S.O. No. 8) dated 12. 04. 1993, legislature has consciously included ''absorbent cptton wool J.P." iA Ent(}' 16 and it was retained for all subsequent years till Assessment Year 1998-99 -- The I commodity "absorbent cotton wool J.P." as included in 1he D relevant entries is the same as "surgical cotton" which the . assessee manufactures - The absorbent cotton wool l.P. is a technical name of the cotton which is sold in the market and commonly known as surgical cotton - By introducing the word . "including" immediately after detail(ng the definition of cotton,/ E legislature has expanded the meaning of expression "cotton" for the purposes of the Act - While fhe natural import suggests and prescribes only unmanufactured cotton in all forms, commodities "absorbent cotton wool l.P." and "cotton waste" manufactured out of "cotton 'I are intentionally and F purposefully included in the relevant entries a/ongwith cotton in its ordinary meaning - "Surgical cotton/absorbent cotton ' wool l.P." is also "cotton" for the purposes of relevant entries in the notifications for assessment years 1993-94 to 1998-99 and, therefore, is liable to exemption from levy of tax under G the Act - Judgment and order passed by High Court for assessment years 1993-1994 to 1998-1999 is set aside. Words and Phrases: H Word "include" - Held: Is generally used to enlarge MAMTA SURGICAL COTION INDUS., RAJASTHAN v. ASSTT. 591 COMMNR. (ANTI-EVASION), BHILWARA, RAJASTHAN meaning of the words or phrases occurring in the body of A statute, and when it is so used those words or phrases must be constnied as comprehending, not only such things, as they signify according to their natural import, but also those things which the interpretation clause declares that they shall include - When word "includes" is used in definition, B legislature does not intend to restrict the definition: it makes the definition enumerative but not exhaustive - The term defined will retain its ordinary meaning but its scope would be extended to bring within it m€Jtters, which in its ordinary meaning may or may not comprise. c Empire Industries /..
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