SHAIK ABDUL RAZAK Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) ALL these revision petitions raise common questions relating to the interpretation of rule 16(2)(ii) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939. The petitioners are licensed dealers in untanned hides and skins and they sold them to persons who held no licence and who, in their turn, exported them out of the State of Andhra. The Taxing Authorities levied taxes on the petitioners in regard to sales effected by them to unlicensed dealers who, in their turn, sold the hides and skins to persons in Madras State, under rule 16(2)(ii) of the Rules. The imposition was contested on the ground that the tax could be collected only from persons who last purchased the hides and skins from the petitioners and exported them to Madras. This objection did not prevail with the Department and tax was levied on the petitioners. An appeal by them to the Sales Tax Appellate Tribunal was dismissed.

(2.) IN these revision cases brought by the aggrieved assessees, the same question are raised. The point presented is that since rule 16(2)(ii) contemplates not only licensed dealers but also unlicensed dealers, the Department should look to the persons who last sold the hides and skins to someone outside the State. In support of this proposition, reliance is placed on a judgment of a Full Bench of this Court in State of Andhra Pradesh v. Abdul Bari and Co. ([1958] 9 S.T.C. 231; 1958 A.L.T. 185). That the intendment of rule 16(2)(ii) is the one attributed to it is sought to be made out with reference to section 14-A of the Madras General Sales Tax Act, 1939.

(3.) THIS sub-rule contemplates the levy of taxes on licensed dealers in hides or skins on either of the two occasions; namely, either at the stage of sale to a tanner in the State, or when the sale is effected for export outside the State. Sub-rule (i) of rule 16(2) prescribes the manner in which the single point is to be fixed when the chain of transactions end in a sale to a tanner and sub-rule (ii) prescribes the single point when the dealings terminate in a sale for export outside the State. It is useful to extract sub-rules (i) and (ii) at this stage.