Judgment :- R. JAYASIMHA BABU, J. The State is aggrieved by the finding of the Tribunal that cotton waste, which is a by-product in the spinning mills of the first respondent is a product for the purpose of G.O.P. No. 92 dated February 22, 1991, under which incentives have been extended to the new industries established in 75 backward taluks annexed to that notification, on the sale of the products manufactured by those units, by way of deferral of sales tax payable on such products for a period of nine years, from the date of commencement of production. Cotton waste is an inevitable by-product in the spinning mill. The various processes, which cotton undergoes before the spun yarn is obtained, have been described in the counter-affidavit filed on behalf of the dealer. The process as set out therein are : (a) The first process is called as "mixing/blending" wherein different constituent of raw cotton are mixed for spinning a particular count. The waste cotton arising in this process is very negligible, namely, approximately 0.01 per cent of the total wastage which is called as "yellow cotton". (b) The next stage is "blow room" wherein the compressed lumps of cotton are opened by machine into small tufts. The fibres are cleaned by removing foreign materials. The product that arises out of such manufacturing process in blow room is called as "lap" which is suitable for next stage. The waste cotton in this process is called "droppings" and accounts for 4.5 per cent of the total wastage. (c) The next stage, i.e., carding involves, subjecting the fibres to the action of a large number of metal wire points to individualise the fibres, further clean the fibres by extracting foreign material, remove the naps and transform the carded material into continuous silver deposited into a vertical container, namely, silver can. The waste which arises out of such process is "flat and lickerin" which account for about 6.5 per cent of total wastage. (d) The next function is to convert the card silvers into a narrow-lap. In this process, the card silvers are passed through pairs of drafting rollers which help in parallelisation of fibres and the resultant sheet of fibres is wound on spool, which is called silver lap. (d) The next function is to convert the card silvers into a narrow-lap. In this process, the card silvers are passed through pairs of drafting rollers which help in parallelisation of fibres and the resultant sheet of fibres is wound on spool, which is called silver lap. (e) The next process involves passing of six silver laps through a series of pairs of driving rollers, moving at progressively increasing surface speeds which help parallelisation of fibres and regularisation of weight per unit length and the six drafted sheets are combined into one forming a uniform sheet and then would again on the spool. This is called as ribbon lap which is made ready for feeding into the next machine, i.e., comber. (f) Before comber, two processes are there, wherein the multiple silver is passed through a series of pairs of rollers moving at progressively increasing surface speed. This helps parallelisation of fibres, removal of hooks, and regularisation of weight per unit length. The next process involves retransmission of adjoining slivers into a narrow lap for feeding it in comber. (g) The next process is called as "combing" wherein the fibres are combed by means of a rotating cylinder, having a number of pins. The fibre in the form of sheet from ribbon lap/lap former are fed at back of comber machines and when the sheet of fibre is gripped firmly between the pair of nippers, the combing cylinder passes through, removing the short fibres below a preset length and improve fibre entanglement and remove the naps and the foreign matter from cotton. The waste cotton which arises in this process is called noil which accounts for 15 to 18 percentage of total wastage. (h) The next step is "speed frame" wherein the draw frame silver is reduced to a size suitable for final spinning. This is achieved by passing sliver between pairs of rollers. The resultant material, called roving, is wound on plastic bobbins. In this ring frame the roving fibre is reduced into narrow fleece of fibres to required size (count) and is twisted by fast rotating of spindle and tiny fast orbiting ring traveler. (i) Finally the product is wound round the slim bobbin. The waste arising out of this process is called "fan and sweeping waste" which accounts for 1.30 percentage of total wastage. (i) Finally the product is wound round the slim bobbin. The waste arising out of this process is called "fan and sweeping waste" which accounts for 1.30 percentage of total wastage. The waste which is enumerated above is the one which is obtainable for 40's count. It is evident, and it is not disputed also, that some amount of cotton waste is generated at every stage of the process, to which raw cotton is subjected, before the spun yarn is obtained. That cotton waste itself has been categorized by the first respondent as falling into two groups, spinnable and non-spinnable. According to the counter-affidavit, spinnable waste includes flat strips, comber noils and roving. Non-spinnable waste includes dropping and sweepings. However, non-spinnable cotton waste is capable of being put to other uses such as making quilts, blankets, domestic sheets and such waste itself is treated as finished product and is commercially marketable. The cotton waste which is obtained in the process of manufacture of the yarn has also been treated in the State Sales Tax Act as a distinct commercial commodity and distinct product, which is subjected to tax at the point of first sale in the State. The word "product" has not been defined in G.O.P. No. 92. It only refers to the products manufactured by the new units established in the backward taluks to which the G.O. applies. The G.O. clearly recognises that the unit may manufacture more than one product. In the absence of any definition limiting the scope for the product only to the principal product, for the manufacturing of which the unit is established, the term "product" is capable of comprehending within its by-product as well, especially when such by-products are themselves distinct commercial goods, which are capable of being marketed separately and which are also subjected to tax as an item of taxation. Moreover, the scheme of incentives formulated by the State is one which is intended to encourage establishment of new industries. The deferral on sales tax liability, while it would not include the liability, if any, on the purchase or raw material extends to all the products manufactured, is intended to enable the industries to become financially viable and to encourage entrepreneurs to set up new units in backward taluks. The deferral on sales tax liability, while it would not include the liability, if any, on the purchase or raw material extends to all the products manufactured, is intended to enable the industries to become financially viable and to encourage entrepreneurs to set up new units in backward taluks. In the context, in which the word "product" is used wider meaning to the term is to be assigned with a view to subserve the purpose of the scheme of incentives. There is nothing in the G.O. which would come in the way of the products mentioned in the G.O. being regarded as comprehending by-products, which are distinct commodities as well, especially when such by product is also the result of the process which renders that by product distinct and different from the raw material from which that by-product is obtained. The Tribunal, therefore, was right in holding that the assessee is entitled to the sales tax deferral in respect of the sales tax payable on the sale of the waste cotton. The writ petition is dismissed.