TMI Blog1975 (12) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... clared goods" as meaning "goods declared under section 14 to be of special importance in inter-State trade or commerce". Section 14(iii) is "hides and skins, whether in a raw or dressed state". Section 6 of the Andhra Pradesh General Sales Tax Act provides that sales or purchases of declared goods shall be liable to tax at the rate and at the point of sale or purchase specified in the Third Schedule. Entry 9 of the Third Schedule is as follows: 9. Hides and skins. (a) Untanned hides and skins. When purchased by a tanner 3 paise in the in the State at the point of rupee. purchase by the tanner and in all other cases at the point of purchase by the last dealer who buys them in the State. (b) Tanned hides and skins When purchased by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 55 (S.C.); [1963] Supp. 2 S.C.R. 435. There the Supreme Court considered rule 16 of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939. Rule 16(1) provided for the levy of tax on the sale of raw hides and skins from the last purchaser in the State. Rule 16(2)(i) provided for the levy of tax on the sale of hides and skins tanned outside the State. Rule 16(2)(ii) provided for the levy of tax on hides and skins tanned within the State. There was a proviso to rule 16(2)(ii), which provided that if tax was levied under sub-rule (1) on untanned hides and skins, the tanned hides and skins would not be liable to tax. Though rule 16(2)(i) and 16(2)(ii) without the proviso were in identical terms and did not effect any discrimination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the purchaser at the time of their sale in the raw condition. If the quantum of tax had been the same, there might have been no case for grievance by the dealer of the tanned hides and skins which had been tanned outside the State. The grievance arises on account of the amount of tax levied being different on account of the existence of a substantial disparity in the price of the raw hides or skins and of those hides or skins after they had been tanned, though the rate is the same under section 3(1)(b) of the Act. If the dealer has purchased the raw hide or skin in the State, he does not pay on the sale price of the tanned hides or skins; he pays on the purchase price only. If the dealer purchases raw hides or skins from outside the Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpression that the Supreme Court had declared rule 16(2) ultra vires because hides and skins tanned outside the State and hides and skins tanned within the State were taxed at different rates, whereas the Supreme Court expressly pointed out that the rate of tax was the same though the quantum was different on account of the disparity in the price of raw hides and skins and tanned hides and skins. The question became complicated by the decision of the Supreme Court in State of Madras v. Nataraja Mudaliar[1968] 22 S.T.C. 376 (S.C.); A.I.R. 1969 S.C. 147. In this case, the Supreme Court distinguished its earlier decision in Firm A.T.B. Mehtab Majid Co. v. State of Madras[1963] 14 S.T.C. 355 (S.C.); [1963] Supp. 2 S.C.R. 435., on the ground t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 3(3) on the amount for which they are bought by him. By rule 16(2) it was provided that-(i) in the case of hides or skins which had been tanned outside the State the tax under section 3(1) shall be levied from the dealer who in the State is the first dealer in such hides or skins not exempt from tax under section 3(3) on the amount for which they are sold by him; and (ii) in the case of tanned hides or skins which had been tanned within the State, the tax under section 3(1) shall be levied from a person who is the first dealer in such hides or skins not exempt from tax under section 3(3) on the amount for which they are sold by him. The taxpayer contended in Firm A.T.B. Mehtab Majid's case(2) that the tanned hides and skins import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid that the burden of tax will be heavier and therefore this will offend against the equality clause and article 304 of the Constitution. In our opinion, this argument is without any substance. The rate of tax is the same in every case. In State of Madras v. N.K. Nataraja Mudaliar[1968] 22 S.T.C. 376 (S.C.). , this court stated that the essence of articles 301 and 303 is to enable the State by a law to 'impose on goods imported from other States or the Union territories any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced'. It was pointed out by this court that 'imposition of differential rates of tax by the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
