STATE OF MADRAS Vs. K H CHAMBERS LTD

JUDGEMENT

(1.) The only question before this Full Bench is whether the decision in the -- 'State of Madras v. Rallis (India) Ltd., Madras', 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:

(3.) The definitions of "dealer" and "turnover" are as follows: