STATE OF ANDHRA PRADESH Vs. MOHAMMAD AZAM ABDUL BARI AND CO

JUDGEMENT

(1.) THESE five revisions raise the question of the right of the State to levy tax on the turnover of a licensed tanner or a licensed dealer who purchases untanned hides and skins from an unlicensed dealer either for tanning or for export as the case may be. The answer depends upon the interpretation of the relevant provisions of the Madras General Sales Tax Act and the Madras General Sales Tax Rules made thereunder, particularly rules 4, 15 and 16.

(2.) A Division Bench of the Madras High Court consisting of Rajamannar, C.J., and Venkatarama Ayyar, J., in Syed Mohammad and Co. v. State of Madras ([1952] 3 S.T.C. 367, at page 393; (1952) 2 M.L.J. 598) considered the relevant provisions and expressed their opinion thus at page 612 :-

(3.) DEALING with rule 16(2)(ii) which deals with the case of a last dealer who purchased untanned hides and skins for export outside the State, the learned Judges observed that the pattern of rule 16(2)(ii) is exactly identical and does not need separate consideration. When the observations of the aforesaid Bench decision were cited, the learned Judges refused to accept those observations on the ground that "the case was one which relates to a licensed tanner who had also purchased from licensed dealer and the point raised for consideration of the court was the constitutional validity of the provision of rule 4 under which the tax was leviable on a purchaser in certain cases." To put it differently, they treated those observations as obiter. We feel that the said observations are the considered views of a Division Bench on the arguments advanced in the case. We cannot, therefore, ignore them. The point was again argued before us at some length and prima facie we must say that there is much that can be said in support of either view. As this question affects innumerable assessees in the State and as there is a conflict of view on the question, we refer the following two points of law to a Full Bench :-