Single-point sales tax levy on hides and skins was upheld where the burden turned on taxable event, not origin.

Re-enacted rule 16 of the Madras General Sales Tax Turnover and Assessment Rules fixed alternative single-point levy points for hides and skins within a single-point taxation scheme. The court's analysis under Part XIII of the Constitution treated raw and dressed skins as one commodity and held that any difference in burden arising from goods dressed inside or outside the State was not origin-based discrimination, but a consequence of locating the earliest valid taxable event within the State. The rule was therefore found not to impose a discriminatory burden prohibited by Article 304(1)(a), and the assessment based on it was sustained.

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Issues: Whether re-enacted rule 16 of the Madras General Sales Tax Turnover and Assessment Rules was unconstitutional as causing discriminatory taxation of hides and skins imported from other States, in breach of Article 304(1)(a) of the Constitution of India.

Analysis: The challenge was tested against the scheme of Part XIII of the Constitution. The rule fixed only the point of levy in a single-point taxation system for hides and skins, treating raw and dressed skins as one commodity and providing alternative levy points depending on where the taxable sale occurred. The difference in burden arising in some cases from goods dressed within the State and goods dressed outside the State was held not to be discrimination based on origin, but a consequence of the point at which the first taxable event could validly be reached. The rule was found to operate on the basis of availability of the earliest taxable point within the State, not on a hostile distinction between local goods and imported goods. It was also held that Article 304(1)(a) prohibited discriminatory taxation at any stage that would impede inter-State trade, but the impugned rule did not impose such a discriminatory burden.

Conclusion: Rule 16 did not contravene Article 304(1)(a) and was valid.

Final Conclusion: The writ petition failed and the impugned assessment based on rule 16 was sustained.

Ratio Decidendi: A sales-tax rule fixing alternative single-point levy points for a commodity is not discriminatory under Article 304(1)(a) if it operates on the taxable event within the State and not on the origin of the goods, even though the resulting burden may differ in particular factual situations.

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