CHINNAPPA REDDY, J. - The petitioners are dealers in hides and skins. They question the vires of entry 9(b) of Schedule III of the Andhra Pradesh General Sales Tax Act on the ground that it has the effect of discriminating between goods imported from other States and similar goods manufactured and produced in Andhra Pradesh, thereby contravening article 304(a) of the Constitution of India.

Section 2(c) of the Central Sales Tax Act defines "declared goods" as meaning "goods declared under section 14 to be of special importance in inter-State trade or commerce". Section 14(iii) is "hides and skins, whether in a raw or dressed state". Section 6 of the Andhra Pradesh General Sales Tax Act provides that sales or purchases of declared goods shall be liable to tax at the rate and at the point of sale or purchase specified in the Third Schedule. Entry 9 of the Third Schedule is as follows :

------------------------------------------------------------------------ "Description of goods Point of levy Rate of tax (1) (2) (3) ------------------------------------------------------------------------

9. Hides and skins.

(a) Untanned hides When purchased by a tanner 3 paise in and skins. in the State at the point the rupee. of purchase by the tanner and in all other cases at the point of purchase by by the last dealer who buys them in the State.

(b) Tanned hides and When purchased by a 3 paise in skins (which were manufacturer in the State the rupee." not subjected' to at the point of purchase tax as untanned by the manufacturer and hides and skins). in all other cases at the point of purchase by the last dealer who buys them in the State. ------------------------------------------------------------------------

In the case of untanned hides and skins purchased by a tanner in the State, under entry 9(a) goods would be liable to be taxed at the point of purchase by the tanner. If tanning, the tanned hides and skins are purchased by a manufacturer, such tanned hides and skins would be exempt from tax under entry 9(b), since they would already be subjected to tax under entry 9(a). In the case of hides and skins tanned outside the State and imported by a manufacturer such tanned hides and skins would be liable to be taxed under entry 9(b). Thus in the case of hides and skins tanned within the State, tax liability at the relevant point would be on the value of the untanned hides and skins while in the case of hides and skins tanned outside the State and imported into the State, tax liability at the relevant point would be on the vale of tanned hides and skins. The difference in value of untanned and tanned hides and skins being enormous, the difference in tax liability would also be vast. There would thus be discrimination. This was the argument of the learned counsel for the petitioners. This was precisely the argument which was accepted by the Supreme Court in Firm A. T. B. Mehtab Majid & Co. v. State of Madras [[1963] 14 S.T.C. 355 (S.C.); [1963] Supp. 2 S.C.R. 435]. There the Supreme Court considered rule 16 of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939. Rule 16(1) provided for the levy of tax on the sale of raw hides and skins from the last purchaser in the State. Rule 16(2)(i) provided for the levy of tax on the sale of hides and skins tanned outside the State. Rule 16(2)(ii) provided for the levy of tax on hides and skins tanned within the State. There was a proviso to rule 16(2)(ii), which provided that if tax was levied under sub-rule (1) on untanned hides and skins, the tanned hides and skin