Taxable event for exported untanned hides and skins is the sale for export, with constitutional exemption applying.

Under the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, the taxable event for untanned hides and skins exported outside the State was the sale for export, not the dealer's prior purchase. Rule 16(2) treated sales by a licensed dealer as generally non-taxable, subject to specified exceptions, including sales to a tanner in the State and sales for export. Rule 4 fixed turnover by reference to the purchase price, but only as a measure of assessment and not as the levy-triggering transaction. Because the decisive sale for export occurred after the Constitution came into force, the turnover fell within the exemption under Article 286(1)(b).

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Issues: Whether, under the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, the taxable event in respect of untanned hides and skins exported outside the State was the sale for export or the antecedent purchase by the dealer, and whether such turnover was exempt under Article 286(1)(b) of the Constitution of India.

Analysis: The relevant statutory scheme provided that untanned hides and skins were generally not liable to tax at every sale, and that tax could be levied only at a single prescribed point. Rule 16(2) treated the sale of untanned hides or skins by a licensed dealer as not taxable, except in specified cases, including sale to a tanner in the State and sale for export outside the State. Rule 4 fixed the measure of turnover for exported untanned hides and skins by reference to the amount for which they were bought, but that did not alter the transaction which attracted the levy. The decisive taxable event remained the sale for export outside the State. Since that sale took place after the Constitution came into force, it fell within the constitutional exemption for export sales.

Conclusion: The taxable event was the sale for export outside the State, not the purchase by the dealer, and the turnover in question was exempt from tax under Article 286(1)(b) of the Constitution of India.

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