Identity of goods test defeats central sales tax exemption for inter-State sales of tanned hides and skins.

Exemption from central sales tax was unavailable on inter-State sales of tanned hides and skins because the exemption notification under section 8(5) of the Central Sales Tax Act required identity between the goods taxed under State law and the goods sold in inter-State trade. Raw hides and skins and tanned hides and skins were commercially distinct commodities, and the State law treated them separately with different rates and levy points. Since purchase tax had been paid on locally purchased raw hides and skins but the inter-State sales were of tanned hides and skins, the essential identity condition was not satisfied, and central sales tax liability remained.

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Issues: Whether exemption from central sales tax was available on inter-State sales of tanned hides and skins merely because purchase tax had been paid on the locally purchased raw hides and skins later tanned by the dealer.

Analysis: Hides and skins are declared goods under the Central Sales Tax Act, but raw hides and skins and tanned hides and skins are commercially distinct commodities. The State enactment treated them separately in different entries of the Second Schedule, with different rates and points of levy. The exemption notification issued under section 8(5) of the Central Sales Tax Act applied only where the goods subjected to State tax and the goods sold in inter-State trade were identical. Since the tax had been paid on raw hides and skins and the inter-State sales were of tanned hides and skins, the essential identity required by the notification was absent.

Conclusion: The claimed exemption was not available, and the liability to central sales tax on the inter-State sales of tanned hides and skins remained.

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