TMI Blog1974 (10) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... get figures for the purchase price of the raw hides and skins or the sale price of the tanned hides and skins than the cost of conversion. As the scheme of taxation is not on the basis of the sale price of tanned hides and skins the suggestion of the High Court cannot be adopted. We, therefore, hold that the High Court was in error in striking down the impugned provision of law. - - - - - Dated:- 15-10-1974 - RAY A.N. C.J. AND MATHEW K.K. AND ALAGIRISWAMI A. JJ. E.C. Agarwala Advocate, for the intervener. Govind Swaminathan (Advocate-General for the State of Tamil Nadu) (A.V. Rangam, K. Venkataswami, N.S. Sivam and Miss A. Subhashini, Advocates, with him), for the appellant in all the appeals and the petitioner in the Special ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... March 1959, at the rate of two per cent of the amount for which such hides and skins were last purchased in the untanned condition." In order to understand the implications of this section it is necessary to refer to certain other provisions of law and two previous decisions of this court. Rule 16 of the Madras General Sales Tax Rules made under Madras Act IX of 1939 read as follows: "(1) In the case of untanned hides and/or skins the tax under section 3(1) shall be levied from the dealer who is the last purchaser in the State not exempt from taxation under section 3(3) on the amount for which they are bought by him. (2)(i) In the case of hides or skins which have been tanned outside the State the tax under section 3(1) shall be levie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eral Sales Tax Act, 1939 (Madras Act IX of 1939) (hereinafter referred to as the said Act), or in the Rules made thereunder (hereinafter referred to as the said Rules), during the period commencing on the 1st April 1955 and ending on the 31st March 1959, in respect of sale of dressed hides and skins (which were not subjected to tax under the said Act as raw hides and skins), the tax under the said Act shall be levied from the dealer who in the State is the first seller in such hides and skins not exempt from taxation under sub-section (3) of section 3 of the said Act at the rate of two per cent of the amount for which such hides and skins were last purchased in the untanned condition." It would be noticed that this section deals with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on the first sale of the tanned hides and skins but it is calculated on the basis of the purchase price of the raw hides and skins whether they were purchased inside the State or outside the State. The out of State purchase of raw hides and skins is not taxed. That would be subject to tax under the Central Sales Tax Act. But what is taxed under the impugned statute is not the purchase of raw hides and skins whether inside or outside the State. In both cases it is on the first sale of tanned hides and skins. Even if a person purchases raw hides and skins inside the State and sells it after tanning he pays the tax on the sale of the tanned hides and skins and not on the purchase of the raw hides and skins though the amount of tax payable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een no argument that it was tax on the imported raw hides and skins. But the State chose to levy the tax on the basis of the purchase price of raw hides and skins which would mean lesser tax. It does not suffer from the vice of taxation of the imported raw hides and skins. We are unable to understand the view of the High Court that if the sale price were taxed and rebate were given then there would be no objection to the tax. We do not understand how that can be done. We asked the learned Advocates appearing for the respondents to tell us how that can be done and they were not able to do so. The cost of conversion of the raw hides and skins to tanned hides and skins might differ from tanner to tanner. It is much easier to get figures for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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