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PETITIONER: A.   HAJEE ABDUL SHAKOOR AND COMPANY

       Vs.

RESPONDENT: STATE OF MADRAS

DATE OF JUDGMENT: 07/05/1964

BENCH: DAYAL, RAGHUBAR BENCH: DAYAL, RAGHUBAR SUBBARAO, K. HIDAYATULLAH, M. SHAH, J.C. MUDHOLKAR, J.R.

CITATION:  1964 AIR 1729            1964 SCR  (8) 217  CITATOR INFO :  RF         1969 SC 147  (19)  D          1972 SC 217  (18)  APL        1974 SC1111  (10)  RF         1974 SC2344  (1)  D          1977 SC 548  (4,6,7)  R          1979 SC 321  (5)  RF         1980 SC1227  (6)  RF         1980 SC1789  (36)  R          1986 SC  63  (36)  RF         1987 SC1885  (8)  F          1987 SC1922  (7,10,12)  RF         1990 SC 820  (15)  F          1992 SC1952  (10)

ACT: Sales  Tax-Distinction  between tanned and  untanned  hides- Whether s. 2 ultra vires-Act whether  discriminatory-Whether legislature can enact retrospective legislation-Constitution of India, Arts. 14, 19(1)(f) and (g), 31, 286(2), 301,  304- Madras General Sales tax (Turnover and Assessment) Rules, r. 16(2)(ii)-Madras General Sales Tax (Special Provisions) Act, 1963, s. 2.

HEADNOTE: The petitioners are dealers in skins in the State of Madras. They purchased raw skins from places both within and outside the  State of Madras, tanned the same and sold them  through their  agents  in Madras.  They were assessed to  a  certain amount of sales-tax in accordance with the provisions of the Madras General Sales Tax Act, 1939, and r. 16(2)(ii) of  the Madras General Sales Tax (Turnover and Assessment) Rules, on the  turnover of hides and skins purchased in  the  untanned condition outside the State and tanned within the State with respect  to the assessment years 1955-56. 1956-57 and  1957- 58.   The tax was assessed at 3 pies per rupee on the  price of tanned hides and skins for the years 1955-56 and  1956-57 and  at the rate of 2 per cent on the turnover for the  year 1957-58.   The petitioners filed three writ petitions  under Art. 32 of the Constitution in which they contended that  8.

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2 of the Madras General Sales Tax (Special Provisions)  Act, 1963  was  ultra vires the Constitution  and  was  otherwise invalid and had no effect.  Allowing the petition. Held, that s. 2(1) discriminates against imported hides  and skins  which were sold upto August 1, 1957 upto  which  date the tax on sale of raw hides and skins was at the rate of  3 pies per rupee and is therefore void.  As sub-s. (1) of s. 2 is  invalid,  the other provisions of  that  section  become unenforceable. Raw  hides and skins and dressed hides and skins  constitute different  commodities  for  merchandise and  hence  can  be treated as different goods for the purposes of the Act. Sub-rule (1) of r. 16 did not become invalid on this Court’s declaring  sub-rule (2) of that rule invalid in Firm  Mehtab Majid Co. v. State of    Madras, [1963] Supp. 2 S.C.R. 435. Held, that the State Legislature was competent to enact  the provisions of  sub-s.   (1)  of  s.  2  of  the  Act.    The Legislature  can enact laws having retrospective  operation. The competence of a Legislature to make law 218 for a certain past period depends on its present legislative power and not on what power it possessed at the time when it is to operate. Firm  Mehtab  Majid Co. v. State of Madras, [1963)  Supp.  2 S.C.R.  435 Government of Andhra Pradesh v.  Nagendrappa,  7 S.T.C.  568, State of Andhra Pradesh v. M. A. Abdul  Bari  & Co., 9 S.T.C. 23 1, State of Travancore-Cochin v.  Shanmugha Vilas  Cashew Nut Factory, [1954] S.C.R. 53, Abdul Subhan  & Co. v. State of Madras, 11 S.T.C. 173 and Raghbir Chand  Sam Chand  v.  Excise  and  Taxation  Officer,  11  S.T.C.  149, referred to.

JUDGMENT: Original  Jurisdiction:  Writ Petition Nos. 201  to  203  of 1963. Petitions  under  Art. 32 of the Constitution  for  the  en- forcement of the fundamental rights. G.   S. Pathak, S. T. Desai and S. Venkatakrishnan, for  the petitioner (in all the petitions). A.   Ranganadham Chetty and A. V. Rangam, for the respondent (in all the petitions). May 7, 1964.  The Judgment of the Court was delivered by: J.   RAGHUBAR  DAYAL J.These are three petitions under  art. 32 by the petitioners, which is a partnership firm,  praying fora  declaration  that  s. 2 of the  Madras  General  Sales Tax(Special   Provisions)   Act,  1963  (Act   No.   11   of 1963)hereinafter   called  the  Act,  is  ultra  vires   the Constitution  and  of no effect and for a writ  of  mandamus directing the State of Madras to refrain from enforcing  any of  the provisions of that section.  Each of  the  petitions relates to a particular assessment year. The petitioners are dealers in skin, carrying on business at Shenbakkam,  Vellore, North Arcot District. in the State  of Madras.  They purchase raw skins from places both within and outside  the  State of Madras, tan the same  and  sell  them through  their  agents in Madras.  They were assessed  to  a certain   amount  of  sales-tax,  in  accordance  with   the provisions of the Madras General Sales Tax Act 1939  (Madras Act  IX  of  1939)  and  r.16(2)(ii)  of  the  rules  framed thereunder viz., the Madras General Sales Tax (Turnover  and Assessment) Rules, on the turnover 219 of  hides  and  skins purchased in  the  untanned  condition

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outside the State, but tanned within the State, with respect to  each of the assessment years 1955-56, 1956-57 and  1957- 58.   The tax was assessed at 3 pies per rupee on the  price of tanned hides and skins for the years 1955-56 and  1956-57 and  at the rate of 2 per cent on the turnover for the  year 1957-58. The petitioners challenged earlier the validity of r. 16  on the ground that it contravened Art. 304 of the Constitution. Their   contentions   were  negatived  by  the   Sales   Tax Authorites.   The petitioners then filed writ  petition  No. 148 of 1959 in this Court against the assessment of tax  for the  year 1957-58.  This Court allowed it as it had held  on November  22, 1962 in Firm Mehtab Majid and Co. v. State  of Madras(1)  that  r.  16(2) of the rules was  invalid  as  it discriminated against the imported hides and skins which had been  purchased or tanned outside the State.   Subsequently, the validity of r. 16(1) of the rules was challenged in this Court  in  writ petitions Nos. 43 and 44 of 1963  by  M.  J. Jamal Mohideen & Co. Those writs were filed on March 5, 1963 and it was contended that subrule (1) standing by itself was ultra-vires  the  Constitution  as  it  had  the  effect  of selecting  for  discriminatory taxation only raw  hides  and skins  and leaving un-taxed sales of tanned hides and  skins in Madras. On June 10, 1963, the Governor of Madras promulgated  Madras Ordinance No. 3 of 1963.  The explanatory statement attached to the Ordinance stated:               "The  decision of the Supreme Court  (in  W.P.               147 of 1959-Firm ATB Mehtab Majid & Co. v. The               State  of  Madras) will result in  claims  for               refund  of tax being preferred by  dealers  in               hides  and  skins already assessed  under  the               impugned  rule thereby resulting in huge  loss               of revenue and will also result in administra-               tive    complications.    It   is    therefore               considered    necessary   to    avoid    these               difficulties by removing the discrimination in               the matter of levy of               (1)   [1963] SUPP. 2 S.C.R. 435               220               tax  on  hides and skins pointed  out  by  the               Supreme  Court and to provide for the  assess-               ment or reassessment and collection of the  ax               from  the dealers in hides and  skins  without               any  discrimination by levying the tax in  all               cases  on the basis of the purchase  price  of               the   hides   and  skins   in   the   untanned               condition."               The relevant provisions of the Ordinance read:               "2.  Special provisions in respect of  tax  on               sale of hides and skins in certain cases:-               (1)   Notwithstanding  anything  contained  in               the Madras General Sales Tax Act, 1939 (Madras               Act  IX of 1939) (hereinafter referred  to  as               the said Act), or in the rules made thereunder               (hereinafter referred to as           the said               rules),      the     following      provisions               shall apply in respect of tax on sale of hides               and skins during the period commencing on  the               1st    April   1955   and   ending   on    the               31st March 1959.               (i)   In the case of raw hides and skins,  the               tax  under the said Act shall be  levied  from               the  dealer who is the last purchaser  in  the               State and not exempt from taxation under  sub-

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             section  (3)  of s. 3 of the said Act  at  the               rate  of two percent of the amount  for  which               they are bought by him.               (ii)  In  the case of dressed hides and  skins               (which  were  not subjected to tax  under  the               said  Act  as raw hides and  skins),  the  tax               under  the said Act shall be levied  from  the               dealer who in the State is the first seller in               such hides and skins not exempt from  taxation               under sub-section (3) of section 3 of the said               Act  at the rate of two percent of the  amount               for  which  such  hides and  skins  were  last               purchased in the untanned condition.                                    221 Explanation  II-For  the  removal of  doubts  it  is  hereby declared  that in respect of sales to which sub-section  (1) applies, nothing in rule 16 of the Madras General Sales  Tax (Turnover and Assessment) Rules, 1939, shall apply or  shall be deemed ever to have applied. (2)  Any  dealer  in hides and skins who  has  been  finally assessed  under the provisions of the said Act and the  said rules,  may within a period of ninety days from the date  of the commencement of this Ordinance apply to the authority or officer  concerned for reassessment under the provisions  of this Ordinance along with the correct and complete return; (3)  Subject  to  the  provisions of  sub-section  (1),  the provisions of the said Act and the said rules shall be deem- ed  to  be  in force for the purpose of  assessment  or  re- assessment  and  recovery of the tax on sale  of  hides  and skins  during the period mentioned in sub-section  (1)  and, notwithstanding  any provision regarding limitation  in  the said  Act and the said rules, it shall be competent for  the authority  or  officer concerned to assess or  reassess  and recover the tax on sale of hides and skins during the period mentioned  in sub-section (1) as if this Ordinance had  been in fore at the relevant time. (4)  The amount of tax on sale of hides and skins during the period  mentioned in sub-section (1) already collected  from any dealer shall be adjusted towards the tax due from him on such  sale  as a result of assessment  or  re-assessment  in accordance with the provisions of this Ordinance and it  the tax on such assessment or reassessment-               (i)   is  in  excess of the amount of  tax  on               such sale of hides and skins already collected               from   such  dealer,  such  excess  shall   be               recovered from him; or               (ii)  is  less than the amount of tax on  such               sale of hides and skins already collected from               such dealer, the difference shall be  refunded               to him.               222 On  July 12, 1963, the Sales Tax Appellate Tribunal,  Madras dealt  with  the  appeals of  the  petitioners  against  the assessment for the year 1955-56 and 1956-57, and in view  of s. 2(3) of the Ordinance, set aside the orders of assessment and remanded the matter for re-assessment in accordance with the provisions of the aforesaid Ordinance. On.  August  28, 1963, the Act received the  assent  of  the Governor.  Sub-s.(2) of s. I provided that the Act would  be deemed to have come into force on June 10, 1963.  Subsection (1) of s. 2 of the Act reads:                "(1)  Notwithstanding anything  contained  in               the Madras General Sales Tax Act, 1939 (Madras               Act  IX of 1939) (hereinafter referred  to  as               the said Act), or in the rules made thereunder

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             (hereinafter  referred to as the said  rules),               during the period commencing on the 1st April,               1955  and  ending on the 31st March  1959,  in               respect  of  sale of dressed hides  and  skins               (which  were  not subjected to tax  under  the               said  Act  as raw hides and  skins),  the  tax               under  the said Act shall be levied from,  the               dealer who in the State is the first seller in               such hides and skins not exempt from  taxation               under sub-section (3) of section 3 of the said               Act at the rate of two per cent of the  amount               for  which  such  hides and  skins  were  last               purchased in the untanned condition.               Explanation  I.The  burden of proving  that  a               transaction  is Dot liable to  taxation  under               this ,sub-section shall be on the dealer.               Explanation  II.-For the removal of doubts  it               is hereby declared that in respect of sales to               which  sub--section  (1) applies,  nothing  in               rule  16(2)  of the Madras General  Sales  Tax               (Turnover  &  Assessment) Rules,  1939,  shall               apply   or  shall  be  deemed  ever  to   have               applied." It is to be noticed that s. 2(1)of the Act is in respect  of tax on sale of dressed hides and skins and not in respect of tax on sale of raw hides and skins with which clause (i) 223 of  s. 2(1) of the Ordinance dealt.  Consequently the  other provisions  of  the  other  sub-sections  of  s.  2,  though practically  the same as those of the Ordinance,  have  been suitably modified.  They are therefore not set out. It is the validity of s. 2 of the Act that is challenged  in these  petitions,  on  the  ground  that  it  violates   the provisions  of Arts. 14, 19(i) (f) and (g), 31, 286(2),  301 and 304 of the Constitution for the following reasons:- 1.   Persons  who had purchased raw hides and skins  in  the State of Madras in the years 1955-56 and 1956-57 paid  sales tax  at 3 pies per rupee and paid no further tax when  those hides,  after  being  tanned, were  sold.   The  petitioners having purchased raw hides and skins from outside the State, did  not  at the time pay tax at that rate on  the  purchase price of the raw hides and skins but were now liable,  under the impugned provision, to pay tax at the rate of 2 per cent of  the  amount  for which such hides and  skins  were  last purchased in untanned condition.  Thus the petitioners would pay a higher tax than what was paid by the seller of dressed hides and skins purchased in the State in the raw  condition and  then  tanned  and  sold  and  that  therefore  s.  2(1) discriminates against imported untanned hides and skins. 2.   In the case of sale of dressed hides and skins, s. 2(i) levies  a  tax at the rate of 2 per cent of the  amount  for which  hides and skins in the untanned condition  were  last purchased  by a dealer himself outside the State.  S. 2  (i) creates  discrimination  between the case of  a  local  mer- chant,selling  locally dressed hides and skins and the  case where  the dealer who is the first seller in the  State  and who purchased only dressed hides and skins outside the State and  then sold them in the State for in his case be had  not purchased such hides and skins in the untanned condition and has therefore not become liable to be assessed under s. 2(1) 3.   Parliament  had by The Essential Goods  (Declaration  & Regulation  of  Tax  on Sale or Purchase)  Act  52  of  1952 declared hides and skins essential for the life of the  com- munity.  The Act provided for taxation on the sale of 224

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hides  and skins during the period such declaration was  in. force,  i.e., between 1-4-1955 and 11-9-1956  and  therefore required the assent of the President, in view of Art. 286(3) of the Constitution as it stood prior to its repeal in  Sep- tember, 1965.  As no such assent had been received, the  Act cannot  affect the sales prior to September 11, 1956 and  so no tax can be levied in respect of those sales. 4.   Rule 16(1) became invalid when this Court held  r.16(2) invalid.   Rule 16(1) has not been revived by the  new  Act. It follows that no tax on sale of raw hides and skins during the   period  1955-57  is  valid  and  that  therefore   the imposition of a tax under sub-section ( 1 ) of s. 2 of  the, impugned  Act imposes a tax on the imported hides and  skins when sold in the State in the tanned condition while no  tax is to be levied on the sale of the hides and skins purchased in the State in the raw condition, then tanned’ and sold. These  contentions are sought to be met for  the  respondent State on the following grounds: 1.   It  is open to the legislature to treat  dressed  hides and  skins as a separate category from raw hides and  skins. They  are  in fact commercially different  commodities  and’ that therefore different rates of tax for the two  different categories of goods can be legally levied. No  discrimination is made between locally tanned goods  and outside-tanned  goods as in both cases tax is levied on  the first  sale  of such goods within the State.   It  does  not matter  that the hides and skins tanned locally do  not  at- tract  that  liability on the first sale in  view  of  their having  been taxed earlier at the untanned stage because  of the special provision of exemption. 2.   It  is  not correct that s. 2 (1) will not apply  to  a dealer  purchasing tanned hides and skins outside  the-State and’  selling  them within the State.  It is  not  necessary that  the seller of the tanned hides and skins in the  State be  himself  the last purchaser of the  untanned  hides  and skins: for the purpose of his liability under s. 2(1). 225 3.   Art. 286(3) as it stood prior to the amendment in  1956 imposed   fetters  only  on  post-Constitutional   law   and therefore  it could not operate on the Madras General  Sales Tax Act, 1939, which had been enacted much earlier.  S. 2(1) of  the impugned Act simply lay down the machinery  for  the assessment  and  collection  of  tax -imposed  by  s.  3  as modified  by  s.  5 of the 1939 Act which  did  not  require Presidential assent. 4.   The  decision  of this Court in  Firm  A.T.B.  Mehtab’s Case(1)  does not affect the validity of  r.16(1).  Sub-rule (1) and sub-rule (2) of r. 16 are severable. We  are of opinion that the first contention for  the  peti- tioners is sound. The effect of sub-section (1) of s.2 of the Act is the  same as  was the effect of sub-rule (2) of r.16 of  the  Turnover and Assessment Rules, 1939, and which was held to be invalid by this Court in Mehtab’s Case(1) . The impugned sub-section provides  for the assessment of tax on the sale  of  dressed hides  and skins which were not subjected to tax  under  the 1939  Act  as  raw hides and skins  and  thus  exempts  from taxation,  in accordance with the provisions of  sub-section (1)  of  s.2 of the Act the sale of tanned hides  and  skins with respect to which tax had been paid on their sale in the raw  condition.   Such  tanned  hides  and  skins  had  been exempted from taxation under sub-clause (ii) of r. 2 of  the Turnover and Assessment Rules.  The same is the position  in the   present   case.   The  present   rule   therefore   is discriminatory  and invalid for the same reasons  which  led

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this Court to hold sub-rule (2) of r. 16 invalid in Mehtab’s Case(1).  There is no escape from this conclusion. In the earlier case, discrimination was broughtabout   on account of sale price of tanned hides and skinsto      be higher than the sale price of untanned hides andskins,:bough the rate of tax was the same, while in the present case, the discrimination  does not arise on account of  difference  of the  price  on  which the tax is levied as the  tax  on  the tanned hides and skins is levied on the amount for (1) [1963] SUPP. 2 S.C.R. 435. 51 S.C.-15. 226 which  those hides and skins were last purchased in the  un- tanned  condition, but on account of the fact that the  rate of tax on the sale of tanned hides and skins is higher  than that  on the sale of untanned hides and skins.  The rate  of tax  on the sale of tanned hides and skins is 2 per cent  on the purchase price of those hides and skins in the  untanned condition while the rate of tax on the sale of raw hides and skins  in the State during 1955 to 1957 is 3 pies per  rupee The difference in tax works out to 7/1600th of a rupee  i.e. a little less than 1/2 nayepaise per rupee.  Such a  discri- mination  would affect the taxation up to the 1st of  August 1957 when the rate of tax on the sale of raw hides and skins was raised to 2 per cent of the sale price. The  second  contention has no force.  There is  nothing  in sub-section (1) of s.2 of the Act to suggest that the seller of  the tanned hides and skins in the State, should  himself be  the  purchaser  of  those hides and  skins  in  the  raw condition  from outside the State.  An importer  can  import tanned  hides and skins as well as untanned hide  and  skins from  outside  the State.  If he imports  tanned  hides  and skins,  he  need not necessarily be the  last  purchaser  of those  hides  and skins in the untanned  condition  In  that case,  it  may be difficult to assess the tax on  the  basis laid down in sub-section (1) of s.2, as the imported may not be  able to inform about the price at which those hides  and skins were last purchased.  Such a price may then have to be determined  by  estimate.   In  case  the  importer  himself purchases the untanned bides and skins and then imports them either  in  the same condition or in the  tanned  condition, there would be no such difficulty.  The difficulty  existing in  the  former  case does not  necessarily  mean  that  the importer  of tanned hides and skins when he himself  is  not the  last purchaser, cannot be taxed under sub-section (1  ) of s.2 of the Act. The  next question is whether sub-rule (1) of r.16  be  came invalid  when this Court declared sub-rule (2) in  valid  in Mehtab’s Case(1).  The contention for the pettioner is  that it became invalid because hides and skins whether tanned  or untanned, constituted one commodity (1)  [1963] SUPP. 2 S.C.R. 435.                             227 and that therefore tax cannot be levied on the sale of hides and skins in the raw condition when no tax is levied on  the sale  of  hides and skins in the tanned  condition.   It  is contended for the State that they are different commodities, and  constitute  two  separate categories  for  purposes  of taxation.   We are inclined to the view that they form  dif- ferent categories. Hides  and skins in the untanned condition  are  undoubtedly different  as articles of merchandise than tanned hides  and skins. It is urged for the petitioners that tanning is only a  pre- servative process which makes no change in the nature of the

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article itself. The  question whether tanned skins and hides  are  different commodities from raw skins and hides has bee& considered  by Courts a few times. In   Government   of  Andhra  v.   Nagendrappa(1)   is   the observation:               "The  tanning  of  raw hides and  skins  is  a               manufacturing process as a result of which the               product that emerges is different from the raw               material."               In State of Andhra Pradesh v. M. A. Abdul Bari               and Co.(1) is also an observation to the  same               effect, it being:               "The  stage of collection is also  appropriate               as,  after  the tanning, the hides  and  skins               become different commodities.......... "               In Encyclopaedia Britannica, Vol. 13, p.  845,               it is stated, in connection with ’leather:               "Leather  is manufactured from the  hides  and               skins  of  various  animals.   The  object  of               tannin(,  (or the manufacture of  leather)  is               the  conversion of the putresible skin into  a               material  which under ordinary  conditions  of               use does not putrefy, and which can be  wetted               and  subsequently dried without becoming  hard               or horny."               (1) 7 S.T.C. 568, 573.               (2) 9 S.T.C. 231, 237.               228 Reference may also be made to State of Travancore     Cochin v.  Shanmugha Vilas Cashew Nut Factory(1) in  which  it  was held  that  raw  cashewnuts  become  a  different  commodity commercially after the application of certain processes as a result of which they are converted into edible kernels. It is therefore not correct to say that the process of  tan- ning  brings about no change in the raw hides and skins  and that  therefore both types of hides and skins form one  com- modity. The  petitioners  rely  on two cases  in  support  of  their contention  that the tanned and untanned hides and skins  do not form-different commodities but constitute one commodity. In  Abdul  Subban  and  Co. v. State  of  Madras(1)  is  the observation:               "Section  14(3) of the Central Sales Tax  Act,               1956  (Act 74 of 1956) also treats  hides  and               skins,  whether  dressed or raw, as  a  single               commodity..... Since skins tanned or untanned,               constitute  only  one class of goods  and  the               sale of that class of goods can be taxed  only               at  a single point, obviously there can be  no               tax  on  a sale of tanned goods,  if  tax  has               already  been paid on an  earlier  transaction               when those skins were untanned.’ No reason is given why the two kinds of hides and skins  are treated as a single commodity. The  other  case  relied on is Raghbir Chand  Som  Chand  v. Excise and Taxation Officer(").  This case does not directly concern hides and skins.  It however held that ginned cotton and  un-ginned  cotton  constitute  one  commodity,  as  the process of ginning just separates the seeds as the character or identity of cotton is not altered thereby, and as ginning is   not  a  manufacturing  process.   It  was  taken   into consideration that the Constitution as well as the  statutes dealing (1) [1954] S-C.R. 53.    (3) xi S.T.C. 149.

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(2) II S.T.C. 173,184. 229 with the matter treat ginned and un-ginned cotton under  the same  head, indicating thereby that the  legislature  looked upon ginned and un-ginned cotton as one and the same thing. The fact that certain articles are mentioned under the  same heading in a statute or the Constitution does not mean  that they all constitute one commodity.  The inclusion of several articles  under the same heading may be for a  reason  other than that the articles constitute one and the same thing. In this connection we may refer to the Madras General  Sales Tax  Act,  1959.  Section 4 of this Act  provides  that  the sales tax on the sale or purchase of declared goods will  be payable at the rate and only at the point specified  against each article in the 11 Schedule. The Second Schedule refers to raw hides and skins separately from dressed hides and skins against serial No. 7. The  rate of tax is different and so is the point at which the tax  is to  be levied.  This will indicate that in 1959  the  legis- lature in Madras considered raw hides and skins a  different commodity  from dressed hides and skins.  There is  no  good reason why the legislature be not attributed the same inten- tion when it enacted the 1939 Act especially when there  are other reasons also to point to the same conclusion. We therefore hold that raw hides and skins and dressed hides and  skins constitute different commodities  of  merchandise and  they could therefore be treated as different goods  for the purposes of the Act. The  provision of the Act at the relevant time for the  levy of  tax  on the sale of hides and skins was  s.5,  cl.  (vi) which reads:               "Subject  to such restrictions and  conditions               as may be prescribed, including conditions  as               to licences and licence fees. - - - -               (vi)  the  sale  of hides and  skins,  whether               tanned  or  untanned shall be  liable  to  tax               under section 3, sub-section (1) only at  such               single point in the               230               series  of sales by successive dealers as  may               be prescribed."               In 1957 this provision was replaced by s.5A(4)               which read:               The sale of hides and skins, whether in a  raw               or dressed state, shall be liable to tax  only               at such single point in the series of sales by               successive dealers as may be prescribed but at               the  rate  of two percent on the  turnover  at               that point." The  series of sales referred to in this provision,  to  our mind,  meant the series of sales of each kind of  hides  and skins namely the series of sales of raw hides and skins  and the  series of sales of dressed hides and skins and  do  not mean  a  single series of sales  which  includes  successive sales in the first instance of raw hides and skins and after tanning successive sales of tanned hides and skins. The  real  question is whether these  provisions  treat  raw hides and skins and dressed or tanned hides and skins as one class  of  goods  for  the purpose of  taxation  or  as  two different classes of goods.  If they treat them as one class of  goods, the contention for the petitioner loses force  as taxing of hides and skins at the time of their sale in a raw condition  meets the requirements of law as hides and  skins could  be taxed only it a single point.  If the  dressed  or tanned  hides and skins are not taxed at the time  of  their

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sale that does not offend against the statutory  provisions. No question of discrimination arises as a sale of raw  hides and skins of whatever origin, i.e., whether produced in  the State or imported into the State would be equally liable  to the levy of tax. If the statute treats both these kinds of hides and skin as  different commodities the provision of sub-rule  (1)  of r.16 providing for the levy of tax on raw hides and skins at a certain point even in the absence of any provision for the taxation  of  dressed hides and skins cannot be said  to  be discriminatory  and invalid.  The articles to be taxed  were not  the same and the legislature could provide  differently not their taxation. 231 We  therefore hold that sub-rule (1) of r.16 did not  become invalid on this Court’s declaring sub-rule (2) of that  rule invalid in Mehtab’s Case(1). The  only  question that now remains  for  consideration  is whether  the  State legislature was competent to  enact  the provisions of sub-section (1) of s. 2 of the Act.  Hides and skins  had been declared under Act LII of 1952 to be  essen- tial  for  the life of the community.  Art.  286(3)  of  the Constitution as it stood before its amendment by the Consti- tution  VI  Amendment Act of 1956, on  September  11,  1956, read:               No  law  made by the Legislature  of  a  State               imposing  or authorising the imposition of,  a               tax on the sale or purchase of any such  goods               as have been declared by Parliament by law  to               be  essential  for the life of  the  community               shall have effect unless it has been  reserved               for the consideration of the President and has               received his assent." This  provision,  however, did not apply. to  the  1939  Act which had been enacted much earlier than the commencement of the  Constitution.   By August 28, 1963, when  the  Act  was enacted  by  the Madras Legislature, Art.  286(3)  had  been amended  and  Act  Lll  of  1952  had  also  been  repealed. Consequently there was no Constitutional requirement for the Act being reserved for the assent of the President before it could be enforced.  It is contended for the petitioner  that the Act really enacted for a period, when if passed, it  bad to  receive the President’s assent for its  enforcement  and that therefore the State Legislature could not even in  1963 enact  this provision affecting the taxation law in  respect of  the sale or purchase of goods which were goods  declared essential  for the of the, commissioner.  We do not see  why such  a  fetter be placed on the legislative  power  of  the State  Legislature.  The State legislature is free to  enact laws   which  would  have  retrospective   operation.    Its competence to make law for a certain past period, depends on its  present legislative power and not on what it  possessed at the period of (1)  [1963] Supp. 2 S.C.R. 435. 232 time when its enactment is to have operation.  We there fore do not agree with this contention. The matter can be looked at in a different way. The 1939 Act required no assent of the President.  The State  Legislature was doing in 1963 what the legislature enacting the 1939 Act was supposed to have enacted and therefore its enactment was not governed by the Constitutional requirement for an Act to be enacted during the period Act LII of 1952 was in force. Lastly, it has been urged for the petitioner that hides  and skins  have  been declared to be of  special  importance  in

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inter-State  trade or commerce by s.14 of the Central  Sales Tax Act of 1956.  The tax imposed by sub-section (1) of s. 2 of  the Act is a tax on the sale of hides and skins  in  the course  of inter-State trade or commerce and  therefore  fen within entry No. 92A of list 1 of Seventh Schedule and  that therefore the State legislature was not competent to  impose it.  It could impose by virtue of entry No. 54 in List II of Seventh  Schedule  tax  on the sale  or  purchase  of  goods subject to the provisions of entry No. 92A of List 1.  There is  no force in this contention.  The tax is imposed on  the sale  which took place within the State.  The  State  legis- lature  is  competent to impose such a tax.  The  mere  fact that  the  article sold in the State had been  brought  from outside  the State does not make the sale of that article  a sale in the course of inter-State trade or commerce.  It  is only  when  A, in State X, purchased  through  a  commission agent  in  a  State Y and receives  the  articles  purchased through the commercial agency that the sale comes within the expression  ’in the course of inter-State trade’: See  State of  Travancore  Cochin v. Shanmugha Vilas  Cashew  Nut  Fac- tory(1). (supra at p. 70). It  has  been  argued  for the State that  the  Act  is  not affected  by  the  provisions of Arts. 301  to  304  of  the Constitution  as  they  affect the  legislative  power  with respect  to Acts to operate in the future and not the  power to  enact Acts which would operate in the past.  We  do  not consider the contention sound.  The Act makes provision  for a period (1)  [1954] S.C.R. 53.                             233 subsequent  to  the  commencement of  the  Constitution  and therefore  is  to  be  subject  to  the  provisions  of  the Constitution. We  therefore hold that sub-section (1) of s. 2 of  the  Act discriminates  against imported hides and skins  which  were sold up to the 1st of August 1957 upto which date the tax on sale  of raw hides and skins was at the rate of 3  pies  per rupee  or 19/16th percent.  This however does not mean  that the  sub-section  is valid with respect to the  sales  which took  place  subsequent to August 1, 1957.   The  subsection being  void  in  its provisions with respect  to  a  certain initial period, we cannot change the provision with  respect to the period as enacted to the period for which it could be valid  as that would be re-writing the enactment.   We  have therefore  to hold that sub-s.(1) of s. 2  void  accordingly hold so. In  view of the provisions of sub-section (1) of s. 2  being invalid   the  other  provisions  of  that  section   become unenforceable. We  therefore  allow the petitions with costs,  one  hearing fee, and hold s. 2(1) of the Act invalid and order the issue of a writ of mandamus to the State of Madras and the  Sales- tax Authorities under the Act to refrain from enforcing  any of the provisions of s. 2 of the Act.                                 Petitions allowed.