Declared goods taxed at one stage only: Court upheld the levy, rejected discrimination and writ bypass of appeal.

Declared goods were treated as taxable only at one stage under the Central Sales Tax Act, so the differing incidence between raw hides and dressed hides was held to flow from the statutory restriction rather than hostile State discrimination under Article 304(a). The Court also noted that raw and dressed hides are commercially distinct, but for declared goods the single-point scheme controlled the levy. The severability argument was not reached because the challenge to item 7(b) failed. The Court further declined writ interference where an appellate remedy was available and accepted the assessing authority's best judgment estimate in the absence of separate accounts.

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Issues: (i) Whether item 7(b) of the Second Schedule to the Madras General Sales Tax Act, 1959 was invalid as discriminatory under Article 304(a) of the Constitution of India in the context of declared goods and the restrictions in the Central Sales Tax Act; (ii) whether, if item 7(b) failed, item 7(a) was not severable and therefore also liable to fall; (iii) whether the assessees could bypass the appellate remedy and directly challenge the assessment under Article 226 of the Constitution of India.

Issue (i): Whether item 7(b) of the Second Schedule to the Madras General Sales Tax Act, 1959 was invalid as discriminatory under Article 304(a) of the Constitution of India in the context of declared goods and the restrictions in the Central Sales Tax Act.

Analysis: The levy on raw hides and skins and the levy on dressed hides and skins operated at different stages of a single-point scheme for declared goods. The restriction in section 15(a) of the Central Sales Tax Act limited the State to taxation at not more than one stage and, read with section 14 of that Act, prevented further levy where the raw goods had already suffered tax. Any resulting difference in tax incidence was traced to the Central Act's restriction on State power and not to a hostile classification made by the State Legislature. The Court also accepted that raw hides and skins and dressed hides and skins were commercially distinct goods, but held that, for declared goods, the constitutional and statutory scheme required taxation only at one stage.

Conclusion: Item 7(b) was not held to be violative of Article 304(a); the challenge failed and the provision was upheld.

Issue (ii): Whether, if item 7(b) failed, item 7(a) was not severable and therefore also liable to fall.

Analysis: The plea of severability depended on item 7(b) being struck down. Since the constitutional attack on item 7(b) was rejected, the foundation for examining severability disappeared.

Conclusion: The question of severability did not arise.

Issue (iii): Whether the assessees could bypass the appellate remedy and directly challenge the assessment under Article 226 of the Constitution of India.

Analysis: The assessees had an appellate remedy available, and the Court declined to permit them to circumvent that statutory course for matters such as the estimating formula used by the assessing authority. In the absence of separate accounts showing which raw hides had gone into the tanned hides and skins, the assessing authority was entitled to adopt best judgment estimation.

Conclusion: The ancillary challenges were not entertained in writ jurisdiction and were left to be pursued before the appellate authority.

Final Conclusion: The petitions were rejected in their entirety, and the assessment scheme under the impugned item was allowed to stand.

Ratio Decidendi: Where a State levy on declared goods is confined to a single point because of the Central Sales Tax Act, the resulting non-taxation at another stage is not discriminatory taxation by the State, and a writ court will not ordinarily displace the statutory appellate process or the assessing authority's best judgment estimation absent separate proof of turnover.

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