Single-point sales tax on hides and skins cannot be imposed without a clearly prescribed taxable point.

Tax on tanned hides and skins could not be imposed under rule 16(3) where the raw hides had been purchased outside the State and no tax had been levied at that purchase stage. Section 5(vi) of the Madras General Sales Tax Act required a single-point levy on hides and skins, and section 3(5) left the rules to fix whether seller or buyer bore the tax; rule 16 alone fixed the relevant point. The phrase "paid the tax leviable under the Act" was construed strictly to mean tax actually leviable and paid under the Act, so rule 4(1) could not create liability where no taxable point had been prescribed. The sale turnover was therefore not taxable, while tannery refuse remained taxable.

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Issues: Whether the sale turnover of tanned hides and skins sold by a licensed tanner was liable to tax under rule 16(3) of the Turnover and Assessment Rules when the raw hides had been purchased outside the State and no tax had been levied on that purchase.

Analysis: Section 5(vi) of the Madras General Sales Tax Act contemplated tax on hides and skins only at a single prescribed point, and section 3(5) required the rules to identify whether the seller or buyer was to bear the tax. Rule 16 alone fixed the relevant point for hides and skins. The expression "paid the tax leviable under the Act" in rule 16(3) was construed strictly to mean tax actually leviable and paid under the Act. The Court held that rule 4(1) could not be used to create a tax liability in respect of hides and skins where the Act required a single-point levy and the rules had not fixed any taxable point for the sale turnover in the circumstances of the case.

Conclusion: The sale turnover of the assessee was not liable to tax under rule 16(3), and the levy was unsustainable.

Final Conclusion: The revision succeeded and the assessee obtained relief against the sales tax demand on the tanned hides, though the turnover relating to tannery refuse remained taxable.

Ratio Decidendi: A taxing provision fixing liability at a single point must be construed strictly, and tax cannot be imposed on a sale turnover unless the statute and rules clearly prescribe that point of levy.

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