Hides and skins remain the same commodity for CST exemption purposes when purchased, tanned and exported, subject to statutory conditions.

Hides and skins purchased, tanned and exported were treated as the same commodity for section 5(3) of the Central Sales Tax Act, 1956, and exemption could not be denied merely because tanning had taken place if the statutory conditions were otherwise satisfied. On that basis, the assessment on the last purchase of raw hides and skins was not sustainable without reconsidering whether the exemption requirements were met. The related issue concerning first sales of dressed hides and skins also required fresh factual examination in light of the declared legal position.

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Issues: Whether hides and skins purchased, tanned and exported could claim exemption under section 5(3) of the Central Sales Tax Act, 1956, and whether the assessment on the last purchase of raw hides and skins was sustainable.

Analysis: The later Division Bench view accepted that hides and skins purchased and exported after tanning do not become a different commodity for the purpose of section 5(3), and that exemption is available if the statutory conditions are satisfied. Applying that legal position, the assessment on the last purchase of raw hides and skins could not stand without a fresh examination of whether the prescribed conditions for exemption were met. The remaining item relating to first sales of dressed hides and skins had already been remitted and required reconsideration on facts in the light of the declared law.

Conclusion: The assessment order was set aside to the extent it sustained tax on the last purchase of raw hides and skins, and the entire matter was remitted for fresh consideration in accordance with law.

Ratio Decidendi: Hides and skins purchased, tanned and exported do not cease to be the same commodity for section 5(3) of the Central Sales Tax Act, 1956, and exemption cannot be denied if the statutory conditions are otherwise satisfied.

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