Last purchase tax on hides and skins survives export and passes constitutional scrutiny under equality principles.

A sales tax scheme that fixes a single taxable point on the last purchase of untanned hides and skins is not rendered unconstitutional merely because the goods are later exported outside the State. The export operates only to identify the last taxable purchaser; it does not mean the levy is imposed on the export sale itself, so Article 286(1)(b) is not attracted. The distinction between licensed and unlicensed dealers also has a rational basis under the statutory method of fixing turnover, and any differing assessment consequences do not amount to discrimination. The levy was upheld and the Article 14 challenge failed.

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Issues: (i) Whether the levy of tax on the last purchase of untanned hides and skins, where the goods are subsequently exported outside the State, is hit by Article 286(1)(b) of the Constitution of India; (ii) Whether the different treatment of licensed and unlicensed dealers in hides and skins offends Article 14 of the Constitution of India.

Issue (i): Whether the levy of tax on the last purchase of untanned hides and skins, where the goods are subsequently exported outside the State, is hit by Article 286(1)(b) of the Constitution of India.

Analysis: The scheme of section 5(vi) of the Madras General Sales Tax Act and rules 4(2)(d) and 16(2)(ii) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, fixes a single taxable point in the chain of dealings in untanned hides and skins. In the case of goods exported outside the State, the export is used only to identify the last taxable purchaser; the levy is not imposed on the export sale itself. Applying the interpretation of "in the course of export" approved by the Supreme Court, a prior purchase made for export does not become immune merely because the goods are later exported. The earlier decision treating such a levy as unconstitutional was therefore incorrect.

Conclusion: The levy does not violate Article 286(1)(b) and is valid against the assessee.

Issue (ii): Whether the different treatment of licensed and unlicensed dealers in hides and skins offends Article 14 of the Constitution of India.

Analysis: The classification between licensed and unlicensed dealers rests on a rational basis under the statutory scheme. The export sale itself is not taxed in either case; the difference lies only in the statutory method of fixing the taxable point in the turnover. The mere possibility of different assessment consequences in different factual settings does not amount to unconstitutional discrimination.

Conclusion: The challenge under Article 14 fails and the classification is valid.

Final Conclusion: The Court upheld the levy on the last taxable purchaser of untanned hides and skins and overruled the contrary view that such levy was constitutionally barred.

Ratio Decidendi: Where a sales tax scheme fixes a single taxable point by reference to the last purchase in a series of sales, the fact that the goods are later exported does not convert that purchase tax into a tax on a sale or purchase in the course of export.

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