IMPORTANT POINT
Tanned leather even though it may have changed in physical appearance or chemical combination and even though it may commercially be a different item still remains a hide or a skin , and, therefore, tanned leather can be subjected to Uttar Pradesh Mandi Fee payable, under the provisions of U.P. Krishi Utapadan Mandi Adhiniyam.

JUDGMENT

S.N. Variava, J.-This Appeal is against a judgment dated 10th July, 1996. By this judgment a number of Writ Petitions filed before the Allahabad High Court have been dismissed.

2. The Petitioners in all the Writ Petitions were doing the business of preparing tanned and finished leather. The question involved in all the four Petitions was whether tanned leather can be subjected to Uttar Pradesh Mandi Fee payable under the provisions of U.P. Krishi Utapadan Mandi Adhiniyam, 1964 (hereinafter for the sake of convenience called the said Act).

3. For an understanding of this question it is necessary to see Section 2(a) of the said Act which reads as follows :

" Agricultural produce means such items of produce of agriculture, horticulture, viticulture, apiculture, sericulture, pisciculture, animal husbandry or forest as are specified in the Schedule, and includes admixture of two or more of such items, and also includes any such item in processed form, and further includes Gur, Rab, Shakkar, Kandsari and jaggery".

Schedule G of the said Act deals with "Animal Husbandry". Serial No. 11 thereunder includes hides and skins .

4. The question which had been raised in the Writ Petitions and which is raised here is whether the term hides and skins includes tanned leather . Mr. Sudhir Chandra has submitted that admittedly the term tanned leather has not been used either in the Act or in the Schedule. He admits that under Section 2(a), not just the items which have been specified in the Schedule but also an admixture of two or more such items or any of those items in a processed form, would also be included. He, however, submits that tanned leather is not hide or skin and is not derived by processing hide or skin . He submits that tanned leather is a manufactured commodity. He submits that "tanned leather" is an entirely different commodity from hide or skin

5. In support of his contention that tanned leather is a different commodity from hide and skin he relies upon a judgment of the Constitution Bench of this Court in the case of A. Hajee Abdul Shakoor and Company v. State of Madras1. In this case the Petitioners were dealers in skins in the State of Madras. They purchased raw skins from places both within and outside the State of Madras, tanned those skins and sold them through their agents in Madras. They were assessed to sales tax under the provisions of the Madras General Sales Tax Act, 1939 and under rules 16(2)(ii) of the Madras General Sales Tax (Turnover and Assessment) Rules. They filed the Petition under Article 32 contending that Section 2 of the Madras General Sales Tax (Special Provisions) Act, 1963 was ultra vires the Constitution. That challenge was upheld on the ground that Section 2(1) discriminated against imported hides and skins and local hides and skins. It was however held that Rule 16(1) did not become invalid because Rule 16(2) had been held to be invalid. Under the Rules tax was levied on sale of hides and skins in raw condition but no tax was levied on sale of hides and skins in tanned condition. Therefore, the Rules themselves made a distinction between hides and skins in raw condition and hides and skins in tanned condition. It was contended that hides and skins whether tanned or untanned constituted one commodity and, therefore, there could be no tax on sales of hides and skins in raw condition when there was no tax on sale of hides and skins in tanned condition. It was held that they were two different commodities and constituted two separate categories for purposes of taxation. It was so held because the two were treated differently in the Rules.

6. Reliance was also placed upon the authority in the case of TVL K.A.K. Anwar And Co. v. State of T.N.2. This again was a case under the T.N. General Sales Tax Act, 1959. The question here was whether raw hides and skins and dressed hides and skins were different commodities. The Court following the decision in A. Hajee