Registered tanner liability under rule 16(2): tanning done elsewhere did not alter assessability on purchase turnover.

A registered tanner who bought untanned hides and skins, had them tanned in other tanneries, and then sold the finished goods for export was treated as a registered tanner for rule 16(2) of the Turnover and Assessment Rules, 1939. The location of the tanning work did not change that status, so the purchase turnover remained assessable under the rule. The argument that a continuous course of dealings had to be proved was not entertained because it was raised late and would have required fresh factual inquiry. The alternative reliance on rule 16(3) also failed, as it had not been urged before the Tribunal and there was no double taxation on the tanned goods.

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Issues: Whether the assessee, a registered tanner who purchased untanned hides and skins and got them tanned in other tanneries, was liable to sales tax under rule 16(2) of the Turnover and Assessment Rules, 1939.

Analysis: The assessee held a licence both as dealer and tanner. The turnover represented the purchase price of untanned hides and skins, which were thereafter tanned by the assessee in tanneries not belonging to him and sold for export. The fact that the tanning was done outside the assessee's own tannery did not alter his status as a registered tanner for the purpose of rule 16(2). The contention that a course of dealings had to be shown was rejected because it had not been raised earlier and involved a new factual inquiry. The argument based on rule 16(3) also failed, as it had not been urged before the Tribunal and, on the facts, the assessee was not subjected to tax again on the sales of the tanned goods.

Conclusion: The assessee was liable to assessment under rule 16(2), and the challenge to the tax liability failed.

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