( 1 ) THESE five revisions raise the question of the right of the state to levy tax on the turnover of a licenced tannef or a licensed dealer who purchases untanned hides and skins from an unlicensed dealer either for tanning or for export as the case may be. The answer depends upon the interpretation of the relevant provisions of the Madras General Sales Tax Act and the Madras General sales Tax Rules made thereunder, particularly rules 4, 15 and 16.

( 2 ) A Division Bench of the Madras High Court consisting of Rajamannar, C. J. , and Venkatarama Ayyar, J. , in Syed Mohammad and Co. v. State of Madras, (1953) 2 M. L. J. 598. considered the relevant provisions and expressed their opinion thus at page 612:"in broad outline the scheme of taxation adopted by the rules is to levy the tax at the stage when the articles are tanned in the State or exported to foreign countries for tanning. Thus, under rule 4 (a) (c) when a licensed tanner purchases untanned hides and skins for tanning, the amount for which he purchases the goods is to be included in his turnover and he is taxed thereon; and under rule 4 (a) (d) when a licensed dealer purchases untanned hides and skins for ex