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State of Madras Vs. K.H. Chambers Ltd. and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax;Constitution
CourtChennai High Court
Decided On
Case NumberTax Revn. Case Nos. 118, 132, 136, 185, 244, 275, 276 and 351 of 1953
Judge
Reported inAIR1955Mad314
ActsConstitution of India - Articles 14, 286 and 286(1); Madras General Sales Tax Act, 1939 - Sections 3, 3(3) and 8; Madras General Sales Tax (Turnover and Assessment) Rules, 1939 - Rules 4(2) and 16(2)
AppellantState of Madras
RespondentK.H. Chambers Ltd. and ors.
Appellant AdvocateAdv. General, i/b., ;Asst. Govt. Pleader in T.R.C. Nos. 118, 132, 136, 185, 244, 275 and 276 of 1953 and ;Pais, Lobo and Alwares and ;S. Venkatakrishnan, Adv. in T.R.C. No. 351/53
Respondent AdvocateAdv. General, i/b., ;Asst. Govt. Pleader in T.R.C. Nos. 351/53, ;Pais, Lobo and Alwares and ;S. Venkatakrishnan, Adv. in T.R.C. No. 185/53, ;V.K. John of John & Row, ;K.V. Venkatasubramania Aiyar,
Cases ReferredBrown v. Houston
Excerpt:
sales tax - point of tax - articles 14, 286 and 286 (1) of constitution of india, sections 3, 3 (3) and 8 of madras general sales tax act, 1939 and rules 4 (2) and 16 (2) of madras general sales tax (turnover and assessment) rules, 1939 - under section 5 (4) sale of hides and skins whether tanned or untanned liable to tax only at such single point in series of sales by successive dealers as may be prescribed - in case of untanned hides or skins sold tax levied on amount for which goods bought - in case of exports tax levied from dealer who was last dealer - in case such last dealer exempt from tax under section 3 (3) dealer before him who was not exempt was liable on amount for which they were bought by him - for purpose of fixing single point in series of sales two events like sale to.....rajamannar, c.j.1. the only question before this full bench is whether the decision in the -- 'state of madras v. rallis (india) ltd., madras', : air1954mad984 (a), requires reconsideration. the learned judges who decided that case, satyanarayana rao and rajagopalan jj., at the request of the learned advocate general who wished to canvass the correctness of that decision, directed the papers to be posted before another bench. it came on thereafter before me and umamaheswaram j., and we thought it desirable that the matter should be heard before a full bench. 2. the question relates to the levy of sales tax under the madras general sales tax act in respect of transactions in untanned hides and skins. the provisions relating to untanned hides and skins in the act and in the rules made under.....
Judgment:

Rajamannar, C.J.

1. The only question before this Full Bench is whether the decision in the -- 'State of Madras v. Rallis (India) Ltd., Madras', : AIR1954Mad984 (A), requires reconsideration. The learned Judges who decided that case, Satyanarayana Rao and Rajagopalan JJ., at the request of the learned Advocate General who wished to canvass the correctness of that decision, directed the papers to be posted before another Bench. It came on thereafter before me and Umamaheswaram J., and we thought it desirable that the matter should be heard before a Full Bench.

2. The question relates to the levy of sales tax under the Madras General Sales tax Act in respect of transactions in untanned hides and skins. The provisions relating to untanned hides and skins in the Act and in the rules made under the Act may be first set ' out. Section 3 provides that every dealer shall pay for each year a tax on his total turnover for such year, and the tax shall be calculated at the rate of three pies for. every rupee in such turnover. A dealer whose total turnover in any year is less than ten thousand rupees is not liable to pay any tax for that year. (Section 3, Sub-section (3)). For the purposes of Section 3, and other provisions of the Act, turnover is to be determined in accordance with such rules as may be prescribed. There is a proviso which enacts that in respect of the same transaction of sale, the buyer or the seller, but not both, shall be taxed, Section 5, in so far as it is material, runs thus:

'Subject to such restrictions and condition as may be prescribed, including conditions as to licences and licence fees -- --

(vi) the sale of hides and skins, whether tanned or untanned shall be liable to tax under Section 3, Sub-section (1) only at such single point in the series of sale by successive dealers as may be prescribed.'

3. The definitions of 'dealer' and 'turnover' are as follows:

'Section 2(b): 'dealer' means any person who carries on the business of buying or selling goods' . . , ' .

Section 2(1): 'turnover' means the aggregate amount for which goods are either-bought by or sold by a dealer, whether for cash or for deferred payment or other valuable consideration provided that the proceeds of the sale by a person of agricultural or horiticultural produce grown by himself or grown on any land in which he has an interest whether as owner, usufructuary mortagagee, tenant, or otherwise, shall be excluded from his turnover;'

4. Two sets of rules have been made, by the' Government in exercise of the powers conferred by the Act, namely, the Madras General Sales Tax Rules, 1939, and the Madras General Sales. Tax (Turnover and Assessment) Rules, 1939. The following are the relevant rules or parts of rules among the General Sales Tax Rules:

'Rule 5 (1) Every person who:

(e) deals in hides and/or skins whether as a tanner or otherwise,

shall, if he desires to avail himself of the exemption provided in Sections 5 and 8 or of the concessions of taxation only at a single point or of taxation at the rate specified in Section 5, submit an application in Form I for a licence.....'

The licence fee should be paid in advance on an estimated turnover, subject to final assessment on the actual turnover. The following are the relevant rules and parts of rules of the Turnover and Assessment Rules:

'(4) (1). Save as provided in Sub-rule (2) the gross turnover of a dealer for the purposes of these rules shall be the amount for which goods are sold by the dealer.

(2) In the case of the undermentioned goods the gross turnover of a dealer for the purposes of these rules, shall be the amount for which the goods are bought by the dealer

(c) untanned hides and skins bought by a licensed tanner in the State, and,

(d) untanned hides and skins exported outside the State by a licensed dealer in hides or skins.'

'15 (1). Rules 6 to 13 shall not apply to licensed tanners and other licensed dealers in hides or skins in respect 'of-their' dealings in hides' or skins; but the provisions of this and the following rule shall apply to them in respect of such dealings.

(2) Every tanner or other dealer in hides or skins whose net turnover for a year has been or is expected to be not less than Rs. 10,000 shall submit to the assessing authority, on or before the last day of November 1939 (or the 25th day of the month following that in which he commences business) and thereafter on or before the 25th day of every month, a return in Form A-4, or, as the case may be, in Form A-5 showing his transactions for the preceding month. Along with' the return, he shall also submit a receipt from a Government treasury or a cheque in favour of the assessing authority for the full amount of the tax payable for the month to which the return relates.'

'16(1). In the case of hides and skins the tax payable under Section 3 (1) shall be levied in accordance with the provisions of this rule.

(2) No tax shall be levied on the sale of untanned hides or skins by a licensed dealer in hides or skins except at the stage at which such hides or skins are sold to a tanner in the State or are sold for export outside the State,

(i) In the case of all untanned hides or skins sold to a tanner in the State, the tax shall be levied from the tanner on the amount for which the hides or skins are bought by him.

(ii) In the case of all untanned hides or skins which are not sold to a tanner in the State but are exported outside the State, the tax shall be levied form the dealer who was the last dealer not exempt from taxation under Section 3(3) who buys them in the State on the amount for which they are bought by him.

(3) Sales by licensed dealers of hides or skins which have been tanned within the State shall be exempt from taxation provided that the hides or skins have been tanned in a tannery which has paid the tax leviable under the Act. If such hides or skins have been tanned in a tannery which is exempt from taxation under Section 3(3), the sale of such hides or skins shall be liable to taxation as under the next sub-rule below dealing with hides or skins tanned outside the State.

(4) Sales by licensed dealers in hides or skins which have been tanned outside the State shall be exempt from taxation except at the stage of sale by the dealer who is the first dealer not exempt from taxation under Section 3(3) who sells them within the State. The tax shall be levied from such dealer on the amount for which he sells such hides or skins.

(5) Sale of hides or skins by dealers other than licensed dealers in hides or skins shall, subject to the provisions of Section 3(3), be liable to taxation on each occasion of sale.'

5. Form A-5 for the return of turnover in the case of dealers in hides or skins 3s as follows;

'To

The Assessing Authority,Sir,

I/We furnish below a statement showing my/our transactions for the month of .....

'Name (s) and postal address (es) of dealer (s).....

Place or places of business .....

Statement(a) For dealers in untanned hides or skins -

Amount for which goods have been sold to tan-neries in the State.

Amount for which gooda have been sold to other dealers in the State

Amount for which gooda have been sold on export outside the State

Amount for which goods falling under column (3) were purchased by the dealer (S)

(1)(2)(3)(4)

(b) is for dealers in tanned hides or skins, with which we are not concerned.

6. We are concerned in this case with untanned hides or skins which are ultimately exported outside the State. So, the provision which directly governs such a case is Rule 16(2)(ii) of the Turnover and Assessment Rules. By the said provision, the tax shall be levied from the dealer who was the last dealer not exempt from taxation under Section 3(3) who buys them, in the State on the amount for which they were bought by him. It is common ground that the assessees in the case before us are not dealers exempt from taxation under Section 3(3). The tax, therefore, has been levied on them as dealers who were the last dealers who bought untanned hides or skins in the State on the amount for which they were bought by them. The said amounts were included in their total turnovers. The assessees claim that the tax so levied is in contravention of Article 286(1)(b) of the Constitution, which says:

'No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place--(b) in the course of the import of the goods into, or export of the goods out of, the territory of India.'

The learned Judges in : AIR1954Mad984 (A) held that the amount of purchase price which, according to P. 16(2){ii) should be included in the total turnover is exempt from tax, because of Article 286(1)(b) of the Constitution. The reasoning of the learned Judges was this: In the case of. untanned hides and skins sold by a licensed dealer for export outside the State, the stage of the event which attracts the tax is--when the goods are sold for export outside the State--though the turnover is to be calculated on the amount for which the goods were purchased by him. The taxable event being the sale for export outside the State, the assessee could be taxed only when the goods were sold for export outside the State. It cannot be disputed that if the transaction which is to be subjected to tax were the export sale by the licensed dealer, such sale would be exempt from taxation under Article 286 of the Constitution, as the sale was for export outside the State. The further reasoning may be stated in the words of Satyanarayana Rao J., who delivered the judgment of the Bench:

'It is not disputed that, if the transaction, which is to be subjected to tax, is the sale by the licensed dealer, as the sale was for export outside the State, it is exempt from taxation under the Constitution. But what is contended on behalf of the Government is that the taxable event is not the sale for export outside the State, but the purchase by the licensed dealer with a view to sell them for export outside the State: as the decision in -- 'State of Travancore-Cochin v. Shanmugha Vilas Cashewnut Factory, : [1954]1SCR53 (B), held that such a purchase was not exempt under Article 286 the assessee could not claim the exemption. If the correct interpretation of the rules is, as contended by the Government Pleader, that the stage at which, or the transaction which, attracts the tax is not the sale by the licensed dealer for export outside the State, but the purchase by him with a view to sell it for export outside the State, the stand taken by the Government Pleader will be tenable. But, in our opinion the language of the rule does not admit of any serious doubt, as it is clear and establishes that it is the sale by the licensed dealer for export outside the State that attracts the tax and not the purchase by the licensed dealer with a view to export the goods outside the State..... In view, therefore, of the clear language of the rules, the only inference possible is that it is the sale for export outside the State that attracts the tax and not the purchase by the licensed dealer with a view to export outside the State.'

The fact that the turnover was computed on theamount for which such goods were bought by thedealer was no ground for shifting the stage at whichthe tax is to be levied from one transaction to theother. ,

7. The learned Advocate General contended that the learned Judges in : AIR1954Mad984 (A), were in error in holding that it is the sale by the licensed dealer for export outside the State that attracts the tax and not the purchase by the licensed dealer with a view to export the goods outside the State, because they overlooked the scheme of the Turnover and Assessment Rules, according to which in the case of untanned hides and skins exported outside the State by a licensed dealer, the dealer is taxed as the purchaser and not as the seller (vide Rule 4(2)(d)). The same provision is also found in. Rule 16(2)(ii), which expressly states that the tax is levied on the last dealer (not exempt from taxation) as buyer. He reh'ed upon the ruling of a Bench of this Court, to which I was a party, in -- 'Govindarajulu Naidu and Co. v. State of Madras', AIR 1953 Mad 118 (C), which was a case of untanned hides and skins exported outside the State. That decision has been upheld by the Supreme Court in -- 'Govindarajulu, Naidu and Co. v. State of Madras', Civil App. No. 186 of 1953 (SC) (D). Reference was also made by him to the decision in -- 'Syed Mohamed and Co. v. State of Madras', : AIR1953Mad105 (E), which was heard and disposed of by the same Bench, and which has since been affirmed by the Supreme Court in --'Syed Mohamed and Co. v. State of Andhra', : [1954]1SCR1117 (F).

8. Dr. John, for some of the assessees, maintained the correctness of the decision in : AIR1954Mad984 (A), His, argument was that s distinction should be kept in mind between the person to pay the tax, the amount on which the tax is leviable, and the stage or point or occasion when the tax is imposed, and what is important for the purpose of the present discussion, was the stage Or point or occasion, and not the amount. He also stressed on the circumstances that the person who exported the goods was also the purchaser of the goods. He cited to us observations from the judgments in the First and Second Travancore Cases, -- 'State of Travancore-Cochin v. Bombay Co. Ltd., Alleppey', AIR 1952 SC 366 (G) and : [1954]1SCR53 (B).

9. The argument of Mr. K. V. Venkatasubramania Aiyar for other assessees, was far more elaborate and comprehensive. His contentions were as follows: The main question for decision is, is the transaction which is included for the purpose of arriving at the turnover, a transaction 'in the course of export? . This question should be decided not only with reference to the situation when the transaction takes place, but also with reference to the situation in which it is viewed in the taxing enactment. Where a transaction is an export sale 'in the strictest sense', that is to say, a sale 'consummated by the process of exportation', the bar under Article 286 clearly arises. Sales or purchases completed before the commencement of the export journey, but factually integrated with the export process, will also fall under Article 286(1)(b) as being transactions in the course' of export. Even where the sale or purchase is unrelated to export, when it takes place but is made taxable by the goods being subsequently exported, the constitutional prohibition is attracted by what may be called statutory retrospective integration, i.e., integration effected by the provisions of the Sales-tax Act and the rules thereunder.

Even if the expression 'in the course of' is understood to involve a time factor and exclude transactions dissociated from export when they took place, the purchases by the exporter himself would be covered by that expression, because the taxability of the purchase is dependent on the subsequent export, and any distinction between the exporter as purchaser and the exporter as seller must make the constitutional exemption illusory. Of course, if the prior purchase were independently taxable even without reference to the export, exemption cannot be claimed on the strength of an export which took place later. In addition to these main contentions, Mr. Venkatasubramania Iyer also raised another contention that the imposition of Sales-tax on licensed dealers under Rule 16 (2) (ii) would be in contravention of Article 14 of the Constitution, inasmuch as in respect of untanned hides and skins exported, a licensed dealer will be liable to tax, whereas an unlicensed dealer would escape from it by reason of Article 286.

10. Mr. Venkatasubramania Aiyar relied on certain decisions of the Supreme Court of the United States in support of bis contention. They may be dealt with before the decisions of this Court and the Supreme Court bearing on the question. The earliest case is -- 'Coe v. Errol', (1885) 29 Law Ed 715 (H). That case was not concerned with anything like a sales tax. The question was whether certain timber logs and lumber were subject to taxation in the State of New Hampshire on the ground that they were property within the State'on the first day of April. They belonged to residents of the States of Maine and Massachusetts and had been cut in forests in New Hampshire and were prepared for exportation to the State of Maine. The question as stated by Bradley J., who delivered the judgment of the Court was whether the products of a State, namely, timber cut in the forests, were, liable to be taxed, like other property within the State, although intended for exportation to another State and partially prepared for that purpose, by being deposited at a place of shipment. The tax was impugned on the ground that it was in violation of Article 1, Section 10, para. 2 of the Constitution which runs thus;

'No State shall, without the consent of Congress, lay any imposts or duties on imports or exports, except what may be absolutely necessary for executing its inspection laws.'

The answer was that they could be taxed like any. other property within the State. The learned Judge arrived at the true rule to be adopted with regard to the point of time at which the taxing power of the State ceases as to goods exported to a foreign country or to another State. He stated the rule in the following terms:

'Such goods do not cease to be part of the general mass of property in the State, subject as such, to its jurisdiction and to taxation in the usual way, until they have been shipped or entered with a common carrier for transportation to another State or have been started upon such transportation in a continuous route or journey.'

The learned Judge proceeded to give the reason in support of this rule thus:

'Until shipped or started on its final journey out of the State its exportation is a matter altogether 'in fieri' and not at all a fixed and certain thing.'

On the facts, he found that the logs had not been shipped and had not started on their final voyage to the State of Maine. They were therefore taxable in New Hampshire. The decision itself, therefore, has no bearing whatever on the question which falls for decision in the cases before us. But Mr. Venkatasubramania Aiyar relied upon the following observations made by Bradley J., in the judgment:

'Of course they cannot be taxed 'as' exports; that is to say, they cannot be taxed by reason or because of their exportation or intended exportation; for what would amount to levying a duty on exports, and would be a plain infraction of the Constitution, which prohibits any State, without the consent of the Congress, from levying any imposts or duties on imports or exports.'

11. The decision in -- 'Richfield Oil Corporation v. State Board of Equalization', (1946) 91 Law Ed 80 (I), was strongly relied on. In that case, the levy of a State sales tax in respect of a sale to a purchaser in a foreign country, although the actual delivery was made in the State, was held to be obnoxious to the constitutional prohibition contained in the Import-Export clause of the Constitution. The assessee was engaged in producing and selling oil in California. He entered into a contract with the New Zealand Government for the sale of oil. The -delivery was made to the order of Naval Secretary, Naval Office, Wellington, into New Zealand Naval tank steamer 'Nucula' at Los-Angles, California. The Corporation carried the oil by pipeline from its refinery in California to storage tanks' at the harbour, where 'Nucula' appeared to receive the oil. When the ship was ready to receive the oil, the assessee pumped it from the storage tank into the vessel. The shipping documents designated the assessee as the shipper and the consignee as the Naval Officer in Auckland. It was assessed to a retail sales tax measured by the gross receipts from the transaction.

The question was whether the levy of the tax violated the provisions of Article 1, Section 10, Clause 2 of the Constitution, i.e., the Import-Export Clause. That depended upon whether at the time the tax accrued, the oil was an export. It was held that the tax was unconstitutional as it was imposed upon an export. The 'ratio decidendi' is to be found in the following passage in the judgment:

'The foreign purchaser furnished the ship to carry the oil abroad. Delivery was made into the hold of the vessel from the vendor's tanks located at the dock: That delivery marked the commencement of the movement of the oil abroad. It is true, as the Supreme Court of California observed, that at the time of the delivery the vessel was in California waters and was not bound for its destination until it started to move from the port. But when the oil was pumped into the hold of the vessel, it passed into the control of a foreign purchaser and there was nothing equivocal in the transaction which created even a probability that the oil would be diverted to domestic use.'

Several decisions of the Supreme Court on the said clause were reviewed, including the decision in (1885) 29 Law Ed 715 (H).

12. In my opinion, these and similar decisions in America do not afford us real assistance in construing the provisions of the Madras General Sales-tax Act and Article 286(1)(b) of the Constitution. The tax impugned in each one of the American decisions, is, or is tantamount to, a tax on commodities, whereas the sales-tax in Madras' is a tax on the turnover, which is determined by the amount involved in the individual transactions of sale. The question in America always is, whether a particular tax is a tax on imports or exports, directly or indirectly. The Constitutional prohibition is of imposts on imports or exports. But in Article 286, the prohibition is in respect of transactions of sale or purchase in the course of import or export. Whereas in America it becomes very material to determine whether at a particular point of time an article has or has not entered the stream of export, in Madras it becomes unnecessary to embark on such an enquiry.

The following observations of the learned Chief. Justice of India in AIR 1952 SC 366 (G) indicate how little the American decisions help us in this matter:

'Our attention was called, in the course of the debate, to various American decisions which hold that the power, 'to regulate' inter-state commerce vested exclusively in the Congress by Article I, Section 8(3) of the American Constitution (The Commerce clause) excludes by implication the States' power of taxation only when the goods enter 'the export stream, and until then such goods form part of the general mass of property in the State subject, as such to its jurisdiction to tax, and that this principle was also applicable to cases arising under Article I, Section 9(5), and Section 10(2) (the import-export clause) (See e. g. -- 'Empresa Siderurgica v. County of Merced', (1948) 337 US 154 (J)). These clauses are widely different in language, scope and purpose, and a varying body of doctrines and tests have grown around them interpreting, extending or restricting, from time to time, their operation and application in the context of the expanding American commerce and industry, and we are of opinion that not much help can be derived from them in the solution of the problems arising under Article 286 of the Indian Constitution.'

I am, therefore, unable to agree with Mr. Venkatasubramania Aiyar that any of the propositions advanced by him are directly supported by any of the American decisions.

13. The decisions of our Supreme Court, however, have a more material bearing on the question now in issue. Though the two decisions of our Court referred to at the Bar, in : AIR1953Mad116 (C) and : AIR1953Mad105 (E), are earlier than the Supreme Court decisions, it will be useful to refer to the latter first. The earliest of the Supreme Court cases is that of AIR 1952 SC 366 (G). What was actually decided in that case was that sales and purchases which themselves, occasioned the export or import of the goods out of or into the territory of India fall within Article 286(1)(b) of the Constitution. Even though property in the goods may pass to a foreign buyer and the sale in that sense may be said to have been completed within the State before the goods commenced their outward journey, such a sale must nevertheless be regarded as having taken place in the course of the export and would be exempted under Article 286(1)(b).

There were several appeals before the Court relating to the imposition of tax on transactions in various commodities. The appeals relating to the tax imposed on transactions in cashewnuts could not be satisfactorily disposed of without further material facts on record, and they were therefore remitted to the High Court for findings on certain points. Three appeals, however, were heard and finally disposed of, relating to coir products, lemon grass oil, and tea. The learned Judges of the Travancore-Cochin High' Court had construed the words 'in the course of in Article 286(1)(b) very widely. According to them, the series of transactions which necessarily precede export or import of goods would come within the purview of the clause. On this interpretation, local purchases made for the purpose of export were held by the learned Judges to be integral parts of the process of exporting.

The learned Chief justice of India setout four different views which might be taken as to the scope and meaning of Article 286(1)(b), which included the view taken by the Judges of the High Court. But it was not necessary to pronounce finally as to which view was correct, because even taking the narrowest of the views, it was clear that the sales in question which occasioned the export fell within the scope of the exemption under Article 286(1)(b).

14. The appeals relating to transactions in cashewnuts which had been remanded came up for final disposal before the Supreme Court with the findings of the High Court, and their final decision is reported in : [1954]1SCR53 (B). The only question debated before them was whether in addition to the export sale and import purchase which had been held in their previous decision to be covered by the exemption under Article 286(1)(b), two other categories of sale or purchase would also fall within the scope of that exemption, of which we are now concerned with one, namely,

'The last purchase of goods made by the exporter for the purpose of exporting them to implement orders already received from a foreign buyer or expected to be received subsequently in the course of business, and the first sale by the importer to fulfil orders pursuant to which the goods were imported or orders expected to be received after the import.'

The Court held, by a majority, that this category of sale was not covered by the exemption. As in Madras, in Travancore-Cochin also, the gross turnover of a dealer for the purpose of assessment of sales tax is the amount for which the goods are bought by him in the case of cashewnut and its kernel. The learned Chief Justice of India summed up the conclusions arrived at by the majority of the Court as follows:

'1. Sales by export and purchases by import fall within the exemption under Article 286(1)(b). This was held in the previous decision.

2. Purchases in the State by the exporter for the purpose of export as well as sales in the State by the importer after the goods have crossed the customs frontier are not within the exemption.

3. Sales in the State by the exporter or importer by transfer of shipping documents while the goods are beyond the customs frontier are within the exemption, assuming that the State-power of taxation extends to such transactions.'

It is true that there is no rule in Travancore-Cochin corresponding to Rule 16(2)(ii) in Madras. But the decision is of great value because of the interpretation of the expression 'in the course of occurring in Article 286(1)(b). Patanjali Sastri C. J. observed:

'What is exempted under the clause is the sale of purchase of goods taking place in the course of the import of the goods into or export of the goods out of the territory of India. It is obvious that the words 'import into' and 'export out of' in this context do not mean the article or commodity imported or exported.....

The word 'course' etymologically denotesmovement from one point to another, and theexpression 'in the course of' not only implies a.period of time during which the movement is inprogress but postulates also a connected relation.....

A sale in the course of export out of . the country should similarly be understood in the context of Clause (1) (b) as meaning a Sale taking place riot only 'during' the activities directed to the end of exportation of the goods out of the country but also 'as part' of or connected with such activities. The time factor alone is not determinative. The previous decision proceeded on this view and emphasised the integral relation between the two where the contract of sale itself occasioned the export as the ground for holding that such a' sale was one taking place, in the course of export. It is, however, contended that on this principle of connected or integrated activities a purchase for the purpose of export must be regarded as covered by the exemption under Clause (1) (b). We arc unable to agree.'

The learned Chief Justice also explained the phrase 'integrated activities', which was also used -- in the argument before us. It is only when a sale which occasions the export cannot be dissociated from the export without which it cannot be effectuated and the sale and the resultant export form parts of a single transaction that the two activities could be said to be integrated. In his opinion, a purchase for the purpose of export could not be regarded as an act done in the course of the export of the goods. In view of the distinct character and quality of the two transactions, it was not correcE to speak of a purchase for export as an activity so integrated with the exportation that the former could be regarded as done 'in the course of' the latter. Das J., took a contrary view. In his view, a purchase made by an exporter to implement his agreement for sale with the foreign buyer should be regarded as having taken place in the course of export.

15. I may now refer to the decision of this court, to which I was a party, in : AIR1953Mad116 (C). At the outset, it may be mentioned that in essence the facts of that case are identical with the facts in the present cases. Mr. Venkatasubramania Aiyar mentioned that the facts as stated by Venkatarama Aiyar J. were not quite accurate in some particulars, but the value of the decision is not affected by the mistake, if any. The facts, as stated by Venkatarama Aiyar J., are certainly similar to the facts in the cases before us. The assessees there were taxed as the last purchasers of untanned hides and skins, who also exported the goods, and the tax was imposed on the price which they paid to their sellers. Exemption was claimed by them in respect of such purchases, as being made in the course of export. It was held that the exemption could not be claimed under Article 286(1)(b). After an exhaustive discussion of American case law, Venkatarama Aiyar J. held, and I agreed with him, that the prohibition in Article 286(1)(b) is limited to the period covered by the actual exportation or importation of the goods and that the power of the State to impose tax at any stage before or after is not affected.

The decision of this Court was confirmed by the Supreme Court in Civil App. No. 186 of 1953 (SC) (D). One of the points raised in the appeal, namely, that 'the purchase of untanned hides and skins made by the appellants were with a view to their ultimate export and were therefore exempt from taxation on the ground of their being purchased in the course of export' was considered to be fully covered by the decision of the Supreme Court in the Second Travancore Case, : [1954]1SCR53 (B). So we have a direct decision negativing the claim to exemption based on Article 286(1)(b) in respect of transactions taxed in accordance with Rule 16(2)(ii) of the Madras General Sales Tax (Turnover and Assessment) Rules. The tax there, as in the casesbefore us, was levied from the dealer who was the last dealer who bought the untanned hides and skins in the State on the amount for which they were bought by him.

16. I must confess that but for the authoritative pronouncement of the Supreme Court in the Second Travancore Case, : [1954]1SCR53 (B), I would have felt considerable difficulty in the construction of Article 286(1)(b) in its application to sales or purchases immediately preceding the actual export, which are related to the export factually. For instance, when a dealer in the State, to perform a contract of sale, entered into with a foreign buyer, purchases the goods which he subsequently exports, it may well be held that the purchase was in the course of the export. Indeed, one of the learned Judges of the Supreme Court, Das J. took that view, though the majority took a contrary view. But the learned Chief Justice of India, who delivered the judgment on behalf of the majority, took up this very question and held that such a purchase would not be covered by the exemption. This is conclusive on this question.

17. It will be seen that the decision in the Second Travancore Case, : [1954]1SCR53 (B) and the Madras case referred to above furnish a complete answer to one part of the argument of Mr. Venkatasubramania Aiyar based on a factual integration between the last purchase and the succeeding export sale. But learned counsel contended, that the other part of his argument remains and invites our decision, as it was not dealt with either by this Court before or by the Supreme Court in any of its judgments. The contention was developed thus: The taxability of the last purchase transaction is dependent on the subsequent export. The export is a condition precedent to the liability to the tax. The export is the taxable event, because the levy is only at the stage of the export and by reason of the goods being exported. The fact that the amount included in the turnover is the price paid by the purchaser in the transaction prior to the export does not affect the legal position. The decision of the Supreme Court in the Second Travancore Case, : [1954]1SCR53 (B) can be distinguished on the ground that there the taxability was not dependent on the subsequent export. The purchase was taxable by itself and not because the goods which formed the subject-matter of the purchase were subsequently exported. But Rule 16 (2) (ii) of the Madras rules expressly makes taxation dependent on export.

18. This argument appears plausible. But after careful consideration of the relevant sections of the Madras Act and the rules made thereunder, I am of opinion that the contention must be rejected. The correct position appears to me to be this: Under Section 5(iv) of the Act, the. sales of hides and skins whether tanned or untanned, are liable to tax only at such single point in the series of sales by successive dealers as may be prescribed. Rule 16 of the Turnover and Assessment Rules prescribes the point. Evidently, for reasons of practical convenience, the rule-making authority desired to fix the single point when the series of sales had come to a termination. There were two ways in which such series of sales of untanned hides and skins could come to an end. One was by the untanned hides and skins going into a tannery that is to say, when they will cease to be untanned hides and skins any longer. The other way was when the untanned hides and skins were exported outside the State. Thereafter, there could be no further transaction of sale in the series. In Rule 16(2)(i) a provision is made for the sale of untanned hides and skins to a tanner, and in Rule 16(2)(ii), for such hides and skins which are exported.

Then, the rule proceeds to fix the liability to tax, In the case of untanned hides or skins sold to a tannery, the tax is to be levied from the tanner on the amount for which the hides and skins were bought by him. In the case of hides and skins exported, the tax is levied from the dealer who was the last dealer who. bought them in the State on the amount for which they were bought by him. If such last dealer was exempt from taxation under Section 3(3) of the Act, the dealer before him, who was not so exempt, was liable on the amount for which they were bought by him. The tax is not levied from the last purchaser because the goods were subsequently exported, any more than the tax is levied from the tanner because he bought the hides and skins for tanning. For the purpose of fixing the single point in the serises of sales, the two events, namely, the sale to a tanner and export outside the State, were taken as the termini of the series of sales. If this be the correct position, I fail to see how the transaction of sale preceding the export sale can be said to be a sale in the course of export.

Under Rule 4(2) of the Turnover and Assessment Rules, in the case of untanned hides and skins exported outside the State by a licensed dealer in hides and skins, the gross turnover of the dealer is the amount for which the goods are bought by the dealer. It will be seen that in the case of such hides and skins, the last purchaser is made liable just as in the case of untanned hides and skins bought by a licensed tanner in the State the last purchaser, i.e., the tanner is likewise made liable. Petitioners' counsel relied on the expression 'at the stage' in Rule 16(2) of the Turnover and Assessment Rules. That rule runs thus:

'No tax shall be levied on the sale of untanned hides or skins by a licensed dealer in hides or skins except at the stage at which such hides and skins are sold to a tanner in the State or are sold for export outside the State.'

But I do not see how that expression helps the petitioners' contention. It is only when that stage is reached in the series of sales by Successive dealers that the tax is levied. But the substantial fact which cannot be overlooked is that it is not the transaction of export sale on which the tax is levied. The only question, therefore, is whether the prior transaction of sale or purchase is a transaction of sale or purchase in the course of export. It certainly cannot be, according to the interpretation of the phrase 'in the course of by the learned Chief Justice in the Second Travancore case, : [1954]1SCR53 (B), to which I have referred above.

19. As pointed out by the learned Chief Justice of India in another case. -- 'State of Bombay v. United Motors (India) Ltd.', : [1953]4SCR1069 (K), the sales tax is imposed, in ultimate analysis, on receipts from individual sales or purchases of goods effected during the accounting period, and not on the goods which are the subject-matter of such sales or purchases at a given point of time. Otherwise, it may be necessary to determine whether at the material point of time the goods could be said to fall within the category of exports or imports. Even assuming that the Madras Sales-tax can be deemed to be practically a sale on the commodities, I still fail to see how the petitioners are entitled to succeed. Can it be said that the commodities have been taxed as exports? I think not. The amount which has to be included in the turnover does, in my opinion, have a material bearing on the question. That will certainly indicate the transaction which attracts the liability to tax. It is reasonable to accept an argument which leads to the position that while one transaction is the subject matter of the tax, the amount of tax is the amount in respect of another transaction.

20. During the course of argument, I asked Mr, Venkatasubramania Aiyar whether logically his contention would not lead to the conclusion that even if the rule had been that in the case of exported untanned hides and skins the first of the series of sales which ended with the export is the taxable transaction, even such first transaction would get the benefit of the exemption under Article 286(1)(b), and learned counsel was compelled to agree, though he was not quite happy about the result.

21. Mr. Venkatasubramania Aiyar next contended that in any event Rule 16(2}(ii) makes the exporter liable though in the capacity of a buyer. Therefore, the tax must be deemed to be a tax on the transaction in the course of the export. This is not so always, as pointed out by the learned Advocate General, because if the exporter is a * dealer exempt under Section 3(3), then he would not be liable but his predecessor would be, who certainly would not be the exporter. With respect to the learned Judges who decided : AIR1954Mad984 (A), I cannot agree with their construction of Rule 18 (2) (ii). Even if it be correct that it is the sale for, export outside the State that attracts the tax and not the purchase by the licensed dealer, it does not follow that the last purchase which after all is the actual transaction which is taken into account for the purpose of determining the turnover is a purchase in the course of export. The learned Judges do not say how it follows. Indeed, they do not discuss anywhere the meaning to be attached to the expression 'in the course of. Nor do they refer to the decision of this Court in : AIR1953Mad116 (C), which also arose on similar facts. In my opinion, : AIR1954Mad984 (A), was wrongly decided.

22. There only remains 'the contention of Mr. Venkatasubramania Aiyar that there is a contravention of Article 14 of the Constitution because the unlicensed dealer who exports untanned hides and skins cannot be taxed on his export sale because of Article 286(1)(b) but the licensed dealer who exports is taxed on his prior purchase. I fail to see how there is any discrimination here. As was observed in : AIR1953Mad105 (E), a classification of merchants into those who take out licences and those who do not is one resting on a rational basis and must he upheld, The scheme of assessment under the Madras General Sales Tax Act certainly makes a difference between a licensed dealer and an unlicensed dealer. For instance, a sale of untanned hides and skins by an unlicensed dealer is included in We seller's turnover under Rule 4(1), whereas a sale by a licensed dealer of such goods is included in the buyers turnover. So far as the final export is concerned, neither the licensed dealer nor the unlicensed dealer can be taxed. Nor are they taxable under the rules, read with Article 286. It is not correct to say that while the unlicensed dealer escapes taxation in view of Article 286, the licensed dealer has to pay the tax. He is not liable to pay any tax in respect of the export sale. It is the prior purchase that is taxable. Different result would follow in different circumstances, namely, where an unlicensed dealer sells to a licensed (dealer, when an unlicensed, dealer sells to an unlicensed dealer, and when a licensed dealer sells to a licensed dealer. It may be that in one or Other of these contingencies there might be difficulty in assessment. This is inevitable, but that fact alone would not justify us in holding that there [has been an unwarranted discrimination. Ultimately, the burden of the sales tax falls on the consumer, as the dealer paying the tax, whether he be licensed or unlicensed, generally passes on the tax. We do not see any substance in this contention.

23. The case will be posted in the usual course before the Bench dealing with Tax Revision Cases.

Balakrishna Aiyar, J.

24. I agree.

Rajagopala Ayyangar, J.

25. I entirely agree with the judgment which has just now been delivered by my Lord the Chief Justice & the reasons given by him for holding that the decisi&n; reported in : AIR1954Mad984 (A), is incorrect and has to be overruled. I would have been content to have left the matter there but I feel that out of regard to the learned Judges who decided the case above mentioned I must add my reasons for the conclusions of the Full Bench.

26. As my Lord the Chief Justice has in his judgment set out the relevant provisions of the Madras General Sales Tax Act as well as the rules made thereunder, it is unnecessary for me to repeat them here. The sole question for our consideration is whether the tax on the purchase of untanned hides and skins by a licensed dealer in hides and skins levied by reason of Rules 4(2)(d) and 16(2) of the Turnover and Assessment rules is invalid by reason of contravention of Article 286(1) of the Constitution.

27. Before dealing with the decisions of the Supreme Court interpreting Article 286, it might be useful to refer to the language of the relevant portion of Article 286 and to a question which has been (sic) in relation to it. Article 286 runs;

'286 (1): No law of a State shall impose, or authorise the imposition of a tax on the sale or purchase of goods where such salexpr purchase takes place

(a) outside the State; or

(b) in the course of the import of the goods into,or export of the goods out of, the territory ofIndia;'

The point that has been formulated is this: Are the expressions sale or purchase to be read distributively so as to apply both to imports as well as to exports or is the Article to be read as prohibiting the imposition by a State of a tax on the sale ofgoods in the course of export of goods out of theterritory ol India and a tax on the purchase of suchgoods when it takes place in the course of importol goods into the country, Mr. VenkatasubramaniaAiyar learned counsel, for the petitioners in some ofthese cases contended that taxes on both sales aswell as purchases were exempt if made either inthe course oi export or import and I am inclined toagree that this is the proper interpretation of theArticle.

28. I shall now endeavour to set out what had been finally decided by the Supreme Court in the two Travancore cases which have dealt with the proper construction of Article 286(1)(b) and the transactions which are protected from taxation under this Article. The first Travancore case, i.e., AIR 1952 SC 366 (G), was concerned with a tax on sales anterior to export and the sale which was there in controversy was one which occasioned the export. Such a sale was held to be a sale in the course of export of goods out of the territory oi India. The learned Chief Justice thus stated the 'ratio' of the decision:

'We are clearly of opinion that the sales here in question, which occasioned, the export in each case, fall within the scope of the exemption under Article 286(1)(b). Such sales must of necessity be put through by transporting the goods by rail or ship or both out of the territory of India, that is to say, by employing the machinery of export. Such a sale cannot be dissociated from the export without which it cannot be effectuated, and the sale and resultant export form parts of a single transaction. Of these two integrated activities, which together constitute an export sale, whichever first occurs can well be regarded as taking place in the course of the other.'

The second Travancore Case, i.e., : [1954]1SCR53 (B), considered the entire Article afresh and the conclusions of the majority of the Judges were summed up in these terms:

'(1) Sales by export and purchases by import fall within the exemption under Article 286(1)(b). This was held in the previous decision.

(2) Purchases in the State by the exporter for purposes of export as well as sales in the State by the importer after the goods have crossed the customs frontier are not within the exemption.

(3) Sales in the State by the exporter or importer by transfer of shipping documents while the goods are beyond the customs frontier are within the exemption, assuming that the State-power of taxation extends to such transactions.'

We are here concerned with the second of the conclusions set out above. In the earlier portion of the judgment, the matter was dealt with thus:

'The only question debated before us was whether in addition to the export-sale and import-purchase, which were held in the previous decision to be covered by the exemption under Clause (1) (b), the following two categories of sale or purchase would also fall within the scope of that exemption:

(1) The last purchase of goods made by the exporter for the purpose of exporting them to implement orders already received from a foreign buyer or expected to be received subsequently in the course of business, and the first sale by the importer to fulfil orders pursuant to which the goods were imported or orders expected to be received after the import.

(2) Sales or purchases of goods effected within the State by transfer of shipping documents while the goods are in the course of transit.'

What is relevant to the present context is category and as regards this the learned Judges said:

'As regards the first mentioned, category, we are of opinion that the transactions are not within the protection of clause (1) (b).'

The resultant position is that a purchase for the purpose of export even though such purchase is effected to implement orders for the export of these goods is not 'a sale or purchase in the course of export' within the meaning of the exemption in Article 286. Under the Travancore Sales-tax Act, the sales tax was levied in the case of cashew upon the purchaser and the effect of this decision therefore is that a tax on the purchase made by the purchaser who exports the goods is not within the constitutional exemption.

29. In view of this Mr. Venkatasubramania Aiyar frankly conceded that if the tax on hides and skins in the present case were levied upon the petitioners merely as purchasers they would clearly be not exempt. But his contention was that the petitioners were taxed 'under the rules not because of their purchase of these goods simpliciter but on account of the fact that the goods which they purchased were in fact exported by them.

30. It will be seen that this is not the ground upon which the learned Judges in : AIR1954Mad884 (A), have held the purchase tax to be invalid. The basis of that judgment is that in truth and in effect it is the sale by the licensed dealer for export that is taxed and not his purchase, though the turnover for computing the quantum of the tax is fixed on the basis of his purchase price. Dealing with the effect of the rules, Satyanarayana Rao J. Says:

'.....the only inference possible is that it is the sale for export outside the State that attracts the tax and not the purchase by the licensed dealer with a view to export outside the State; Though the transaction which attracts the tax is the sale, the turnover, however, has to be computed on the amount for which the goods are bought by the dealer and this is made clear by Rule 4 and also Rule 16(2)(ii).'

With the greatest respect to the learned Judges, I cannot agree with this interpretation of the rules. The taxable event is really the purchase and the quantum of turnover reflects this. It is no doubt true that unless the goods were exported, the tax liability would not fasten but that has no effect upon the critical event which is the basis of the tax. According to the Madras General Sales Tax Act and the rules, raw hides and skins are a commodity in respect of which the rule as to single point taxation applies and the tax is levied upon the last taxable purchaser who deals with the commodity in its raw state. It is by reason of this principle that export figures as a fact to determine the last buyer. In other words, the tax is really one on the transaction of purchase anterior to, the export, the factum of the export figuring merely as marking the final stage of a series of purchases by one licensed dealer from another, on the occurrence of which the taxable event-- namely the last purchase is determined.

In fact, Mr. Venkatasubramania Aiyar learned counsel for the petitioners appreciating this aspect of the matter did not seek to support the judgment in ' : AIR1954Mad984 (A)', on its reasoning but put forward his case on quite a different ground. He conceded that on the decision of the second Travancore ease, the purchase of raw hides and skins for the purpose of export could not claim constitutional tax-immunity and that if there was a multiple point taxation in respect of each 'purchase of the commodity, as in the cashew case before the Supreme Court, he could not succeed, as even the last purchase which proceeded the actual export would not be a sale or purchase in the course of export.

31. The proposition of law, however, on which learned counsel based his argument was that even where a sale or purchase is unrelated to export when '' it takes place, but is' made taxable by reason only of the goods being subsequently exported, the constitutional prohibition is attracted by the statutory non-factual & retrospective integration effected by the taxing enactment & it is on this theory that he contended that the tax levied upon the purchase of raw hides and skins under Rule 16(2) conceding it to be really one on the purchase of goods was really a tax on the purchase or sale of goods in the course of export within Article 286(1)(b).

32. This argument was rested on passages incertain American decisions dealing with the scopeof the Import Export clause of the AmericanConstitution.

33. Most of the American decisions are concerned with the validity of State as distinguished from Congressional taxation. The inhibition in the case of the States is of a twofold character, the first flowing from the commerce clause. Article 1 Section 8(3): The Congress shall have power to regulate commerce with foreign nations and among the several States, and this provision which vests in Congress an exclusive power of regulation over inter-State and foreign commerce has been held to be a limitation on State power even in the absence of implementing legislation by Congress and to create of its own force an area of trade free from State interference.

34. The second is the Import Export clause Article 1, Section 10(2):

'No State shall without the consent of Congress lay any imposts or duties on imports or exports except what may be absolutely necessary to execute its inspection laws; and net produce of all duties and imposts laid by any State on imports and exports shall he for the use of the treasury of the United States'.

There is further a constitutional embargo laidupon Congress levying any duty on exports for Article1, Section 9(5) provides: 'No tax or duty shall belaid on articles exported from any State'.

35. In regard to the commerce clause, I understand the result of the decision, to be that in imposing taxes for State purposes, State is not exercising any power which the Constitution has conferred upon the Congress. It is only when the tax operates to regulate commerce between the States or with foreign nations to an extent which infringes the authority conferred upon Congress that the tax can be said to exceed constitutional limits. (Vide 'Mcgoldrick v. Berwind-White', (1939) 84 Law Ed. 565 (L)). At the same time it has been held that forms of States taxation whose tendency is to prohibit inter-State foreign commerce or place it at a disadvantage as compared to or in competition with intra-State commerce, any State tax which discriminates against such commerce are familiar examples of the exercise of State taxing power in an unconstitutional manner because of its obvious regulatory effect upon commerce between the States. The position is thus summed up by Stone J. in (1939) 84 Law. Ed. 565 (L):

'Certain types of tax may, if permitted at all, so readily be made the instrument of impeding or destroying inter-State commerce as plainly to call for their condemnation as forbidden regulations. Such are the taxes already noted which are aimed at or discriminate against the commerce or impose a levy for the privilege of doing it, or tax inter-State transportation or communication or their gross earnings, or levy an exaction on merchandise in the course of its inter-State journey.' Each imposes a burden which intra-State commerce does not bear, and 'merely because inter-State commerce is being done places it at a disadvantage in comparison with intra-State business or property in circumstances such that if the asserted power to tax were sustained, the States would be left free to exert it to the detriment of the national commerce.'

The 'ratio' of the decisions appears to be that a State tax which discriminates between goods circulating in the State and those exported outside is tantamount to an infringement of the exclusive power of Congress to regulate commerce under Article 1(8).

36. Decisions of this type therefore furnish no useful guide for the determination of the proper rule of construction of the Indian Constitution.

37. In my judgment, the American decisions dealing with the Import Export clause do not afford us any assistance either. The distinction between the scope of the prohibition enacted by the commerce clause and this has been clearly expressed by Douglas J. in (1946) 91 Law Ed 88 (I):

'The two constitutional provisions while related, are not coterminous. To be sure, a State tax has at times been held unconstitutional both under the Import-Export clause and under the Commerce clause ..... But there are important differences between the two. The invalidity of the one derives from the prohibition of taxation on the import or export; the validity of the other turns no wise oh whether the article was Or had ever been, an import or export ..... Moreover, the Commerce clause is cast, riot in terms of a prohibition against taxes, but in terms of a glower on the part of Congress to regulate commerce. It is well established that the Commerce Clause is a limitation upon the power of the States, even in the absence of action by Congress..... As we shall see, the question as to what is exportation is somewhat entwined with the. question as to what is inter-State commerce. But the two clauses, though complementary, serve different ends. And the limitations of one cannot be read into the other.'

A contention that the tax there in question --which was one on the gross receipts of a retailer -- was a tax on tangible property in the State and for the privilege of conducting a business of sale of goods was rejected on the-basis that it is not the characterisation of the tax by the State that determined its nature but its operation and effect It was while dealing with this argument to sustain the validity of the tax that the passage on which Mr. Venkatasubramania Aiyar relies 'Appellee 'concedes that the prohibition of the Import-Export clause would be violated if the goods were taxed as exports or because of their exportation' or 'if the process of exportation were itself-taxed', occurs. Similar passages in earlier decisions were also referred to by learned counsel and relied on.

38. For instance Bradley J. speaking of taxes on exports said in (1885) 29 Law Ed 715 (H),

'Of course they cannot be taxed as exports that is to say they cannot be taxed by reason or because of their exportation or intended exportation for that would amount to laying a duty on exports and would be a plain infraction of the Constitution which prohibits any State without the consent of the Congress from laying any im-posts or duties on imports or exports.'

Similarly in -- 'Brown v. Houston', (1885) 29 Law Ed 257 (M), the same learned Judge said:

'A duty on exports must either be a duty levied on goods as a condition or by reason of their exportation or at least a direct tax or duty on goods which are intended for exportation.'

Learned counsel for the petitioners sought to derive from these passages authority for the position that if the factum of export enters in any manner into the process attracting the tax, the same was within the prohibition enacted by Article 286(1)(b) of the Constitution.

39. In my opinion, these passages do not furnish any useful analogy for the interpretation of Article 286.

40. The American courts have held that a tax which discriminates against exported goods is virtually a tax on exports. The passages abovementioned stem from this concept of such a discriminatory tax being a prohibited impdst. Under the scheme of the Indian Constitution and the distribution of legislative and taxation powers under it, there is no prohibition on Parliament to tax exports and the entire control over exports and imports as well as duties on such exports and imports are excluded from the purview of the States. It is, not the contention of Mr. Venkatasubramania Aiyar that a tax upon the purchase in the present case even if the act of exportation of the goods is an incident calling the levy into operation, is an export duty. If this were so, the relevant article in the Constitution that such a tax could contravene is not Article 288 but Entries 41 and 83 of Schedule VII list 1 read with Article 248.

Learned counsel did not raise any argument upon this basis.

41. I am clearly of the opinion that the sales-tax levied on the last taxable purchaser of hidesand skins under the Madras General Sales Tax Actdoes not contravene Article 286(1)(b) of the Constitution and that the levy is valid. I agree withthe order of my Lord in these tax revision cases.


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