Export sale of hides and skins through commission agents treated as taxable purchase point under single-point sales tax rules.

Rule 16(2)(ii) under the single-point sales tax scheme for hides and skins treats the taxable stage as the point where the sales series ends by export outside the State or sale to a tanner, with tax effectively attached to the purchase transaction. The expression "sold for export outside the State" is construed to include a sale by export, not only a sale completed within the State. Use of commission agents does not change the character of the transaction where the goods are ultimately exported. On that construction, the turnover was said to fall within rule 16(2)(ii) and outside the section 3(3) exemption limit.

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Issues: Whether sales of untanned hides and skins routed through commission agents and effected by export outside the State fell within rule 16(2)(ii) of the Turnover and Assessment Rules so as to fix tax liability at the purchase point and deny exemption under section 3(3) of the Madras General Sales Tax Act.

Analysis: Rule 16(2)(ii) fixes the taxable stage at the point where the series of sales terminates by sale to a tanner or by export outside the State. The tax is imposed on the purchase transaction, although the taxable event is identified at the stage of export. The expression "sold for export outside the State" was construed as meaning sale by export or export sale, and not as requiring that the sale must be completed within the State itself. Where the goods are ultimately sold only through export from the State, the method adopted by the dealer, including use of commission agents, does not alter the character of the transaction for purposes of levy.

Conclusion: The transactions effected through commission agents were sales by export and therefore attracted rule 16(2)(ii); the turnover exceeded the exemption limit under section 3(3), so the assessee was liable to tax.

Ratio Decidendi: For purposes of a single-point sales tax scheme on hides and skins, "sale for export outside the State" includes any export sale by which the goods leave the State, regardless of the manner or intermediary through whom the sale is effected.

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