LUCKNOW SKIN CO Vs. STATE OF U P

JUDGEMENT

(1.) BRIJESH KUMAR, J. The petitioners, who carry on the business of sale and purchase of hides and skins of animals at Lucknow, feel aggrieved against the notice issued under section 21 of the Central Sales Tax Act, 1956 for the assessment year 1980-81. The main contention is that sale of raw skin for the purposes of export is exempt from the sales tax; therefore, the assessment proceedings cannot be reopened for levy of Central Sales Tax. We have heard the learned counsel for the petitioners and the learned State counsel.

(2.) IT appears that regular assessment for the assessment year 1980-81 was made under section 9 (2) of the Central Sales Tax Act, vide assessment order dated February 24, 1982. In the year 1984, the petitioners had been served with a notice under section 21 of the Central Sales Tax Act for reopening of the assessment. The reason indicated for reopening the assessment is that the raw skin which had been sold by the petitioners to the purchaser outside the State was dressed and then exported by the purchasers. The notice further indicates that the raw and the dressed skins are two different commercial items under section 14 of the Central Sales Tax Act. The petitioners were not entitled to the benefit given to them under section 5 of the Central Sales Tax Act.

(3.) IT will be useful to reproduce sub-section (3) of section 5 of the Central Sales Tax Act : " 5. When is a sale or purchase of goods said to take place in the course of import or export.- (1 ). . . . . . . . . . . . . . . (2 ). . . . . . . . . . . . . . . (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. " Under section 14, certain goods have been declared of goods of special importance in inter-State trade or commerce, clause (iii) of which includes "hides and skins, whether in a raw or dressed state".