M R K ABDUL SALAM AND COMPANY Vs. GOVERNMENT OF MADRAS

JUDGEMENT

(1.) JAGADISAN, J The Order of the Court was made by JAGADISAN, J. The petitioner is a business firm of partnership at Ranipet, North Arcot district, dealing in hides and skins. It also does business as tanners converting raw hides and skins into dressed goods and selling them. The firm is a licensed dealer and tanner under the Madras General Sales Tax Act, 1939 exigible to tax under that Act. For the year 1955-56 the firm submitted a return of nil turnover to the Deputy Commercial Tax Officer, Arcot. The officer scrutinised the firm's accounts and assessed the firm on a net turnover of Rs. 4, 92, 191-3-9. This turnover included the purchase value of raw skins and hides in the State, sales value of tanned skins sold inside the State and the sales value of waste materials like javvu, mudi etc. On appeal by the firm, the Commercial Tax Officer, Vellore, reduced the net turnover to Rs. 4, 57, 295-6-3. There was a further appeal to the Sales Tax Appellate Tribunal by the assessee which ended in a confirmation of the assessment of the taxing authorities, subject to a slight modification in regard to the licence fee with which we are not now concerned.

(2.) THE assessee's opening stock of raw hides and skins at the commencement of the assessment year 1955-56, was of the value of Rs. 32, 051. This stock of goods was purchased by the assessee during the year 1954-55 and having remained unsold or untanned was brought forward as the opening stock for the year 1955-56. THE assessee contended before the Appellate Tribunal that the value of the opening stock should not be included in the sales turnover of the tanned stock which admittedly came out of the untanned opening stock. We shall advert to the details of this contention a little later. THE Tribunal rejected this contention. It was further contended before the Tribunal on behalf of the petitioner that two items of transactions of sale put through Gordon Woodroffe and Co., Ltd., and Dharamsee Parpia of the turnover value of Rs. 74, 282-0-9 and Rs. 4, 268-10-6 respectively were exempt from taxation as they constituted export sales or sales in the course of export, hit by the provisions of Article 286 of the Constitution. This contention was also rejected by the Tribunal.In this revision petition, the petitioner urged the following three grounds : THE sale of tanned hides and skins resulting from the opening stock of the raw hides and skins at the commencement of the year 1955-56 should not be included in the sales turnover of the tanned hides and skins during the year 1955-56 (2) the sale of tanned hides and skins through the Gordon Woodroffe and Co. for the amount of Rs. 74, 266-0-9 was a sale in the course of export and was therefore exempt from taxation and (3) that the sale of tanned hides and skins of the value of Rs. 4, 268-10-6 affected through Dharamsee Parpia, Madras, was an export sale in favour of Sriven Bros. (Eastern) Ltd., London, not exigible to tax.

(3.) MADRAS Act I of 1957 amended the said provision and introduced section 5-A, clause (4), in these terms :