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TMI Blog2022 (4) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... d in TC No.59 of 2019 dated 06.12.2019 in the case of The State of Tamil Nadu Rep., by the Joint Commissioner (CT), Chennai (South) Division, Chennai v. Tvl.Blue Diamond Leders [ 2019 (12) TMI 886 - MADRAS HIGH COURT ], wherein it was held that the process of conversion of wet blue leather into finished leather amounts to 'manufacture' within the meaning of Section 3 and therefore, there was no misuse of declaration in Form 17 by the assessee, while purchasing chemicals for processing the leather and the assessee was not liable to pay higher rate of tax on such purchase of materials . The substantial questions of law are answered in favour of the respondent / assessee and against the Revenue - Application dismissed. - T.C. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Constitution? 4. Whether the Appellate Tribunal is correct in placing a construction on the expression in any other manner occurring under sub Section (4) of Section 3 of the Tamil Nadu General Sales Tax Act, 1959 would not include export sale within its ambit? 5. Whether the Appellate Tribunal has failed to appreciate that sections 3(3) and 3(4) of the Tamil Nadu General Sales Tax Act, 1959 are not designed as charging provisions as evident from the non-obstante clause occurring at the beginning of Section 3(3) of the said Act? 6. Whether the Appellate Tribunal has today failed to consider that Tamil Nadu General Sales Tax Act, 1959 was enacted to levy tax on sales or purchases within the State of Tamil Nadu alone as ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r rate of tax. 3. The word ' Blue Leather ' as per Leather Dictionary refers to moist chrome-tanned leather. In this phase, the leather is tanned, but, neither dried, dyed nor finished. The bluish colouring is produced by the chrome tanning agent (Chromium (III) Oxide), which is blue and is contained in the leather after Tanning. With the advancement of technology, the Leather is dyed through in multiple colours but, the dyes have no opacity. In the case of bright leathers, the reverse of the Finished Leather retains the blueish colour of the Chrome Tanning Agents. During retanning, the leather is bleached so that light colours can be achieved with better dying. 4. The said controversy as to whether the conversion of the wet l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dyeing The required colour is taken and dyed for colouring. Drying The water, which is already present in the leather is removed. Staking This process involves to make leather soft and flat. Trimming The process is carried on for the neat surface area and good looking purpose. Buffing/Stuffing This process removes the dust in the backside of the leather and for uniformity on both sides. Dedusting Process is carried on for the purpose of smooth surface on both sides. Finishing The process is for fixing the colour in the grain surface. We have to consider whether this activity will amount to manufacture. So, we seek help from the various rulings of the Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of leather that are mentioned in the entry are 'raw hides and skins' and 'dressed hides and skins'. The entries indicate taxability and the rate. That cannot decide the issue as to whether any manufacturing activity takes place or not. Both 'wet leather' and 'finished leather' may be described as dressed hides and skins that is opposed to raw hides and skins . But we must still examine whether, when the wet blue takes through the various stages, a manufacturing activity takes place. The change or series of changes take the wet blue to a point where it can no longer be regarded as wet blue but must be recognized as finished leather, so there is a manufacture . This question must be decided on the facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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