1972 (8) TMI 125 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of whether reptile skins fall under item 52 of Schedule I or item 7(a) of Schedule II of the Tamil Nadu General Sales Tax Act.
2. Determination of the taxable turnover based on the purchase of raw reptile skins by the assessee.
3. Application of tax rates on the purchase of reptile skins within the State and inter-State purchases.

Detailed Analysis:
The judgment dealt with the issue of whether reptile skins should be taxed under item 52 of Schedule I or item 7(a) of Schedule II of the Tamil Nadu General Sales Tax Act. The assessee, a dealer in reptile skins, claimed exemption for the entire turnover as sales in the course of export. However, the assessing authority determined the taxable turnover based on the purchase of raw reptile skins, concluding that they fall under item 7(a) of Schedule II. The Appellate Assistant Commissioner upheld this decision, considering the inter-State purchases exempt but taxing local purchases. The Tribunal also ruled in favor of taxing the turnover under item 7(a), leading to the challenge before the High Court.

The High Court analyzed the scope of item 52 of Schedule I and item 7(a) of Schedule II. The contention was whether "raw hides and skins" in item 7(a) included reptile skins or if they should be categorized under item 52. The court rejected the argument that item 7(a) only referred to skins of animals, emphasizing that the words "hides and skins" were not limited to specific animals. It was noted that a conjoint reading of the two items implied that all skins were to be taxed at the last purchase in the State under item 7(a) to avoid contravening tax regulations.

The court highlighted a Government Order recognizing the inconsistency between item 52 and the Central Sales Tax Act, leading to the eventual deletion of item 52. The judgment stressed the need to interpret statutory provisions to ensure validity and enforceability. It was concluded that the turnover of reptile skins should be taxed under item 7(a) of Schedule II due to its broader scope, encompassing all skins without specific limitations. The court upheld the Tribunal's decision, dismissing the tax case and affirming the levy of tax on the purchase of reptile skins under item 7(a) of Schedule II.