1989 (1) TMI 342 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the purchase of raw hides and skins within the State attracts tax under the Andhra Pradesh General Sales Tax Act, 1957?
2. Whether the exemption under subsection (3) of section 5 of the Central Sales Tax Act, 1956 applies to the purchase of raw hides and skins by the petitioner?

Analysis:
1. The case involved a question regarding the tax liability on the purchase of raw hides and skins within the State under the Andhra Pradesh General Sales Tax Act, 1957. The petitioner, a dealer, purchased raw hides and skins and sold them to a corporation in Madras for export. The issue was whether the petitioner, being the last purchaser in the State, is liable to pay tax as per the provisions of the Act. The Third Schedule of the Act specifies that raw hides and skins are taxable at the point of purchase by the last dealer in the State. The petitioner contended that they are exempt from tax under subsection (3) of section 5 of the Central Sales Tax Act, 1956, read with section 38 of the Andhra Pradesh General Sales Tax Act, 1957.

2. The Court analyzed the relevant provisions of the Central Sales Tax Act, particularly subsections (1) and (3) of section 5. Subsection (1) exempts the sale or purchase of goods that occasion export, while subsection (3) extends this exemption to the last sale or purchase preceding the export-sale. However, the Court held that the exemption under subsection (3) cannot be applied to the petitioner's purchase of raw hides and skins since it is not directly preceding the export-sale but removed by an additional step. The Court also noted a previous judgment establishing that tanned hides and skins and raw hides and skins are considered the same goods for the purpose of the Central Sales Tax Act.

3. The Tribunal also deliberated on whether raw hides and skins and tanned hides and skins are the same goods, but the Court found it unnecessary to provide an opinion on this matter. Ultimately, the Court dismissed the Transfer Review Cases (T.R.Cs), holding that the purchase of raw hides and skins by the petitioner does not fall within the scope of the exemption provided in subsection (3) of section 5 of the Central Sales Tax Act. The Court concluded by stating that the T.R.Cs fail and are dismissed, with no costs awarded to any party.