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 authority, Patiala District, took up· the assessment proceedings afresh and after an examination of the account books and other vouchers produced by the finn accepted as correct the gross tum-over returned by the dealer. Regarding the various deductions claimed by the finn, 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 finn, 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 quanuty of unginned cotton purchased by the finn, only I/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 tum-over of unginned cotton should be fixed at 1/3rd of the total price paid for the unginned cotton. The assessing authority has also proceedeJ on the basis that the amount realised by the finn by sale of cotton seeds, as a result of ginning, cannot be taken into account for calculating the tum-over under s. 5(2)(a)(vi) of the Act, as the said material is something different from cotton. The firm had also challenged the order of assessment that the levy of sales tax on cotton, which is an item of "declared !!oods" 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 Conunissioner of Punjab bad 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.
