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TMI Blog1997 (11) TMI 458X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tamil Nadu General Sales Tax (Third Amendment) Act, 1987 are not ultra vires. - Civil Appeal No. 8377, 8378 of 1977, 4747-4752 of 1993, 6660 of 1995, 1453, 855 of 1994, 1453 of 1994, W.P. Nos. 12058, 12059 of 1987, 23 of 1988, 453 of 1991, 5457, 7374 of 1990, 3665 of 1988, 3666 of 1988, & 8381 of 1993 - - - Dated:- 27-11-1997 - SEN S.C. AND KIRPAL B.N. AND THOMAS K.T. JJ. Nikhil Sakhardand, A Raghunath and A. Mariarputham. Other Advocates V. Krishnamurthy, Advocate, for the respondent in all the appels. -------------------------------------------------- The judgment of the Court was delivered by B.N. Kirpal, J. -Leave granted in S.L.P. (Civil) Nos. 5384 and 5385 of 1984. 2.. The common question which arises in these appeals is whether the turnover 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 asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the period subsequent to 4th September, 1991, when the said Schedule was again amended, as a result of which the original entry got restored. 6.. In order to appreciate the rival contentions it is necessary to refer to the statutory provisions. Sections 14 and 15 of the Central Sales Tax Act, in so far as they are relevant for the purpose of these cases, are as under: 14. Certain goods to be of special importance in inter-State trade or commerce.- It is hereby declared that the following goods are of special importance in inter-State trade or commerce: ..................... (iii) hides and skins, whether in a raw or dressed state. 15.. Restrictions and conditions in regard to tax on sale or purchase of declared goods within a State.-Every sales tax law of a State shall, in so far as it imposes or authorises the imposition of a tax on the sale or purchase of declared goods, be subject to the following restrictions and conditions, namely: (a) the tax payable under that law in respect of any sale or purchase of such goods inside the State shall not exceed four per cent of the sale or purchase price thereof, and such tax shall not be levied at more than one stage; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale in the State 2" With effect from 6th September, 1991, item No. 7 of the Second Schedule was once again substituted and after such amendment the item read as under: "7 (a) Raw hides and skins At the point of last purchase in the State 4 (b) Dressed hides and skins (which were not subjected to tax under this Act as raw hides and skins). At the point of first sale in the State 4" 7. The main thrust of the arguments of the learned counsel for the appellants was two-fold. It was explained that with a view to preserve the raw hides and skins they are first "cured" by either wet salting, dry salting or drying. In the "cured state" the raw materials can be preserved for a temporary period. In the next stage the hides and skins are "picked" and thereafter they are tanned in which state they can be preserved almost indefinitely. These tanned hides and skins are processed further to yield dressed hides and skins which are then ready for use. It was submitted that raw hides and skins and dressed hides and skins, irrespective of their state, are the same commodities. After "raw hides and skins" are p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CR 168. In Chandu Lal s case [1970] 25 STC 52 (SC); [1969] 3 SCR 849, the dealer had paid purchase tax on the purchase of unginned cotton and, after ginning the cotton and removing the seeds, it had sold the ginned cotton to customers outside the State. In respect of the cotton seed sold by it to registered dealers, a deduction had been claimed from the purchase turnover but the same was not allowed on the ground that the goods sold, namely cotton seed, were not the goods in respect of which purchase tax had been levied inasmuch as unginned cotton underwent a manufacturing process and the goods produced were different from those purchased. Allowing the appeal of the State of Punjab, a three-Judge Bench of this Court observed at page 56 of STC (page 853 of SCR) that declared goods in section 14 of the Central Sales Tax Act, 1956, are individually specified under separate items. Cotton ginned or unginned is treated as a single commodity under one item of declared goods . Reliance was placed on this observation and it was contended that because the entry in section 14(iii) reads hides and skins, raw or dressed , it would mean that raw hides and skins and dressed hides and skins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inued to be hides and skins entitled for special treatment under the Central Sales Tax Act. 11.. In Telangana Steel Industries v. State of Andhra Pradesh [1994] 93 STC 187 (SC); (1994) Supp 2 SCC 259, the question was whether iron wires were separate commercial goods from wire rods from which they were produced. Without deciding whether both the goods were one commercial commodity or not and after referring to the decision of State of Tamil Nadu v. Pyare Lal Malhotra [1976] 37 STC 319; [1976] 3 SCR 168 and Rajasthan Roller Flour Mills Association v. State of Rajasthan [1993] 91 STC 408; (1994) Supp 1 SCC 413, this Court held that as both the rods and wires form part of one sub-item, viz., (iv)(xv), they could not be taken as separate taxable commodities and if wire rods which had been purchased by the dealers had already been subjected to sales tax, then wires which were drawn from the said rods could not be taxed again. In arriving at this conclusion, it was observed that when the sub-item spoke of wires rolled, drawn, galvanised, aluminized, tinned or coated...... it showed that even if they were separate commercial commodities, the Legislature nevertheless did not want wir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TC 173 (Mad.) where the following observations had been made at page 728 of STC (page 228 of SCR): Section 14(3) of the Central Sales Tax Act, 1956 (Act 74 of 1956), also treats hides and skins, whether dressed or raw, as a single commodity....... Since skins, tanned or untanned, constitute only one class of goods, and the sale of that class of goods can be taxed only at a single point, obviously there can be no tax on a sale of tanned goods, if tax has already been paid on an earlier trans- action when those skins were untanned. The aforesaid conclusion in Abdul Subhan s case [1960] 11 STC 173 (Mad.) was not accepted by this Court and it was observed at page 728 of STC (page 228 of SCR) that no reason is given why the two kinds of hides and skins are treated as a single commodity . Again at page 729 of STC (page 229 of SCR) the finding of the court was that we therefore hold that raw hides and skins and dressed hides and skins constitute different commodities of merchandise and they could therefore be treated as different goods for the purposes of the Act. 13.. From the aforesaid observations it clearly follows that the Constitution Bench had, in no uncertain terms, co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The court while interpreting the said provisions then held as under: The real question is whether these provisions treat raw hides and skins and dressed or tanned hides and skins as one class of goods for the purpose of taxation or as two different classes of goods. If they treat them as one class of goods, the contention for the petitioner loses force as taxing of hides and skins at the time of their sale in a raw condition meets the requirements of law as hides and skins could be taxed only at a single point. If the dressed or tanned hides and skins are not taxed at the time of their sale that does not offend against the statutory provisions. No question of discrimination arises as a sale of raw hides and skins of whatever origin, i.e., whether produced in the State or imported into the State would be equally liable to the levy of tax. If the statute treats both these kinds of hides and skins as different commodities the provision of sub-rule (1) of rule 16 providing for the levy of tax on raw hides and skins at a certain point even in the absence of any provision for the taxation of dressed hides and skins cannot be said to be discriminatory and invalid. The articles to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entry. Merely because different goods or commodities are listed together in the same sub-heading or sub-item in section 14 cannot mean that they are regarded as one and the same item. Whenever the Legislature wanted different goods placed in the same entry to be regarded as a single commodity it expressly provided for the same. By Act 103 of 1976, sub-sections (c) and (d) were inserted in section 15 of the Central Sales Tax Act. With the introduction of section 15(d) each of the pulses referred to in clause (vi-a) of section 14, whether whole or separated, and whether with or without husk, were to be treated as a single commodity for the purposes of levy of tax under that law . If the intention of the Legislature had been that the various commodities mentioned in the same clauses in section 14 were to be regarded as a single commodity it would have specifically provided as such. The Legislature, however, chose to single out different types of pulses only to be regarded as a single commodity. Notwithstanding the fact that the raw hides and skins had been held by this Court in Hajee Abdul Shukoor s case [1964] 15 STC 719; [1964] 8 SCR 217 as being distinct from dressed hides and sk ..... X X X X Extracts X X X X X X X X Extracts X X X X
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