KIRPAL - (1.) LEAVE granted in SLP (c) Nos. 5384-85 of 1984.
(2.) THE common question which arises in these appeals is whether the turn-over in respect of hides and skins which has once been subjected to tax under the Tamil Nadu General Sales Tax Act, on its purchase at the raw stage, could be taxed again on inter-State sales as tanned or dressed hides and skins. According to the appellants they purchase raw hides and skins and after dressing they are sold in the course of inter-State trade. The contention of the dealers before the assessing authority was that hides and skins, whether in raw or dressed form, are declared goods under S. 14(iii) of the Central Sales Tax Act and they are regarded by the said Act as a single commodity. This being so S. 15 of the Central Sales Tax Act provides that the goods which have suffered tax once cannot be taxed again at the time of inter-State sale. As the tax had been levied at the time of purchase of raw hides and skins, therefore, there should be no levy of tax on their inter-State sale after the said raw hides and skin had been dressed. The assessing authority, in all these cases, did not accept the said contention as the authorities were of the opinion that raw hides and skins were a commodity which were different from dressed hides and skins and, therefore, the restrictions contemplated by S. 15 of the Central Sales Tax Act was not applicable.
(3.) THE decision of the assessing authority was challenged by some of the appellants by taking recourse to the provisions under the Act and after an adverse decision from the Tribunal, revision petitions were filed before the High Court at Madras. Some of the other appellants chose to challenge the decision of the sales tax authority as well as the constitutional validity of S. 3 of the Tamil Nadu General Sales Tax (3rd Amendment) Act, 1987 substituting item No. 7 and the relevant entries thereto in the IInd Schedule to the Tamil Nadu General Sales Tax Act, 1959, by filing writ petitions before the High Court of Madras. THE High Court, by different decisions, came to the conclusion that raw hides and skins was a commodity which was commercially different from dressed hides and skins both under the State Act as well as the Central Act and that the State had the legislative competence to tax the inter-State sale of dressed hides and skins even though tax had been paid on the purchase of raw hides and skins. THE further finding of the High Court was that there was no merit in the challenge to the legality of the entries which had been substituted in the IInd Schedule by the Amending Act of 1987. The controversy in these appeals relates to three periods, namely, for the period prior to 23/03/1987; for the period 23/03/1987 to 4/09/1991, when amendment was made to item No. 7 to the IInd Schedule pursuant to the aforesaid Amending Act and for the period subsequent to 4/09/1991 when the said schedule was again amended, as a result of which the original entry got restored.;