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TMI Blog2008 (10) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... rchase of raw skin was effected for fulfilment of export orders of finished leathers. The Revenue challenged this before the Sales Tax Tribunal and the Tribunal following K.A.K. Anwar & Co. v. State of Tamil Nadu [1998] 108 STC 258 wherein the Supreme Court had categorically held that, "dressed hides and skins are goods different from raw hides and skins", held that the claim of exemption under section 5(3) of the Central Sales Tax Act is not in order and allowed the appeal. Against this the appellant herein filed the revision before the Tamil Nadu Taxation Special Tribunal and the matter had been admitted and notice had been issued on December 6, 2001. Consequent to the abolition of the Tribunal, these matters are entertained as a revision by us. Even at the outset, the learned Special Government Pleader submitted that Shafeeq Shameel and Company v. Asst. Commissioner, Commercial Taxes [2003] 129 STC 1 (SC) covers this issue. But elaborate arguments were advanced by the learned counsel of the appellant that Shafeeq Shameel's case [2003] 129 STC 1 (SC) can be distinguished. So we are dealing with the same. Mr. V. Sundareswaran, learned counsel for the appellant, submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eemed to take place in the course of the import of the goods into the Territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the Customs Frontiers of India. (3) Notwithstanding anything contained in sub-section (1), the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the Territory of India shall also be deemed to be in the course of such export, if such last sale or purchase took place after, and was for the purpose of complying with, the agreement or order for or in relation to such export. 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: (i) . . . (ii) . . . (iii) hides and skins, whether in a raw or dressed state; (iv) . . ." The Tamil Nadu General Sales Tax Act, 1959: "9. Stage of levy of taxes in respect of imported and exported goods. - Where in the case of any goods tax is leviable at one point in a series of sales or purchases, such series shall - (a) i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of raw hides and skin against specific orders for export - Legal opinion - Regarding Ref: AGP (Taxes) Madras, opinion No. 92/94 dated June 29, 1994 The Additional Government Pleader (Taxes), Madras, in her opinion cited above opined that the judgment in the case of Brown Leather Company v. State of Tamil Nadu reported in [1993] 91 STC 1 (Mad) in paras 24, 26 and 30 which clearly give the answer that raw and dressed hides and skins are different for the purpose of levy under the State law. While for taxation under the Central Sales Tax Act, if the local purchases of raw hides and skins are converted into finished leather and then exported against the specific order for export, such raw hides and skins and dressed hides and skins are to be treated as one and the same commodity as per Mahi Traders judgment rendered in the Supreme Court of India reported in [1989] 73 STC 228. Sd./P. Ponnuswamy, Joint Commissioner (RP) (FAC) Now we will deal with the judgments. (i) T. Azeezur Rahman and Company v. State of Tamil Nadu [1991] 82 STC 355 (Mad) is the judgment on which the assessee rested his case from the beginning. Here the Division Bench held that the purchase of raw hides and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the State Legislature is entitled to treat them as different objects of levy of sales tax and whether such levy is violative of article 286(3) of the Constitution and sections 14 and 15 of the Central Act. . . . The fact that certain articles are mentioned under the same heading in a statute or in the Constitution, does not mean that they all constitute one commodity and the inclusion of several articles under the same heading may be for reasons other than that the articles constitute one and the same thing. Therefore, inasmuch as dressed hides and skins are commercially different from raw hides and skins, the mere fact that they are grouped together in one and the same item under section 14(iii) cannot make or render them to be the same commodity for all purposes and under all circumstances." (iii) In A. Hajee Abdul Shukoor and Co. v. State of Madras [1964] 15 STC 719 (SC), the validity of the Madras General Sales Tax (Special Provisions) Act (II of 1963) came up for consideration and the question was whether section 2(i) discriminates against hides and skins imported from other States. There, while explaining section 5 of the Tamil Nadu General Sales Tax Act, which reads thus: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 87; the period between March 23, 1991 and September 4, 1991; and the period after September 4, 1991, when the original entry got restored. For a period that is from March 23, 1987 to September 4, 1991 the entry read merely as: 7(a) Raw hides and skins 7(b) Dressed hides and skins and the words within the brackets "(which were not subjected to tax under this Act as raw hides and skins)" were deleted for this period. The Supreme Court held that even though Mahi Trader's case [1989] 73 STC 228 seems to support the contentions urged on behalf of the appellants, the question that whether dressed hides and skins and raw hides and skins are different commodities and whether section 14(iii) refers to a single commodity "appear to have been decided by a Constitution Bench of this court in A. Hajee Abdul Shukoor and Co. v. State of Madras [1964] 15 STC 719". Therefore, it is clear that the decision in Mahi Traders [1989] 73 STC 228 is impliedly overruled and the Supreme Court held that it clearly follows that the Constitution Bench had in no uncertain terms come to the conclusion that raw hides and skins and dressed hides and skins were not one and the same commodity and the submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after it becomes dressed leather. Therefore, really there can be no controversy after this categoric pronouncement. All the objections raised by the appellant are dealt with namely, that they are the same goods, that hides and skins in a raw and dressed are included in one entry, that article 286(3) is violated. In fact, it is this decision that the Tribunal had relied on to reject the appellant's case. (vi) Park Leather Industry (P.) Ltd. v. State of U.P. [2001] 122 STC 82 (SC), is another case on which the appellant relies on. The question there was whether the term "hides and skins" would include tanned leather and the Supreme Court after a detailed discussion of the etymological meaning and also the glossary published by the Indian Standards Institution that "tanned leather" still remains "hides and skins". But there they were dealing with section 2(a) of the U.P. Krishi Utpadan Mandi Adhiniyam, 1964. There the Supreme Court also referred to A. Hajee Abdul Shukoor and Co. v. State of Madras [1964] 15 STC 719 (SC); [1964] 8 SCR 217 and K.A.K. Anwar & Co. v. State of Tamil Nadu [1998] 108 STC 258 and held that those decisions would not apply to the case arising out of the U. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate of Tamil Nadu [1998] 108 STC 258; [1998] 1 SCC 437 has categorically held that dressed hides and skins are different goods from raw hides and skins. Section 5(3) would be applicable where the goods which are sold or purchased have not undergone any transformation. In the instant case what is purchased by the appellant are raw hides and skins and it is not the same goods which are exported. Those raw hides and skins are then processed and it is the dressed hides and skins which are exported. Therefore, section 5(3) will have no application. The appeals are dismissed." In fact, even in T. Azeezur Rahman and Company's case [1991] 82 STC 355 (Mad) which the appellant relied on, the assessee invoked section 5(3). The case of the appellant is that he purchased raw hides and skins and the same goods are exported as dressed hides and skins and it is thus he claims exemption. The Supreme Court has held that they are not the same goods, but different goods. In Shafeeq Shameel's case [2003] 129 STC 1 (SC) the appellant was a dealer identical to the appellant herein. He too purchased raw hides and exported them as dressed hides and the Supreme Court reiterating the legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these decisions, the Supreme Court held that the circulars are binding on the Revenue but they do not bind the court or the assessee. Consistently, from 1998, the position is hides and skins, raw and dressed are two different commodities and in fact, both the circulars are prior to K.A.K. Anwar's case [1998] 108 STC 258 (SC) and the circular dated 1994 was given in the context of Mahi Traders [1989] 73 STC 228 which is now impliedly overruled by K.A.K. Anwar's case [1998] 108 STC 258 (SC). In these circumstances, no reliance can be placed on the circulars. However, the 1999 letter which has been extracted above, shows that the Deputy Commissioners have been requested to instruct the assessing officer not to take coercive action on the demands already raised in cases of purchase of raw hides and skins against specific orders of export until final orders are received from Government for waiver to the period up to November 30, 1997. The present case is one which arose before November 30, 1997 and if the assessing officers have been instructed to comply with these instructions and they have been doing so, they may consider extending the same indulgence to the appellant herein ..... X X X X Extracts X X X X X X X X Extracts X X X X
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