Single-point sales tax on hides and skins applied only within the licensed-dealer scheme, not to unlicensed dealers.

Rule 16(2)(ii) of the Madras General Sales Tax Rules confined the concessional single-point levy on untanned hides and skins exported outside the State to licensed dealers. Read with rules 15 and 16(5) and section 5(vi) of the Act, the scheme showed that sales by unlicensed dealers remained taxable on each occasion of sale, while the special export-stage levy applied only within the licensed-dealer framework. The expression in rule 16(2)(ii) was therefore limited to the last licensed dealer in the chain and did not extend to an unlicensed dealer. The tax was accordingly fastened on the last licensed dealers, not on the unlicensed purchasers who exported the goods.

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Issues: Whether, under rule 16(2)(ii) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, the tax on untanned hides or skins exported outside the State was leviable from the last licensed dealer or could be fastened on the last unlicensed dealer in the chain.

Analysis: Rule 16(2) specifically applies to sales by licensed dealers in hides or skins and fixes the single point of levy in cases where the goods are sold either to a tanner in the State or for export outside the State. Reading rule 16(2)(ii) with rule 15, rule 16(5), and section 5(vi) of the Madras General Sales Tax Act, 1939, the scheme of the rules shows that the special benefit of single-point taxation is confined to licensed dealers. Rule 16(5) separately provides that sales by dealers other than licensed dealers are liable to taxation on each occasion of sale. The expression used in rule 16(2)(ii) therefore refers to the last dealer not exempt from taxation, but within the licensed-dealer scheme, and does not extend to an unlicensed dealer.

Conclusion: The tax was rightly levied on the petitioners as the last licensed dealers, and not on the unlicensed purchasers who exported the goods.

Final Conclusion: The statutory scheme confined the concessional single-point levy on hides and skins to licensed dealers, and the revision petitions failed on that interpretation.

Ratio Decidendi: Where a sales tax scheme grants single-point taxation to licensed dealers in hides and skins, the levy under the export-stage provision is attracted only within that licensed-dealer framework, while unlicensed dealers remain taxable on each sale under the separate general provision.

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