JUDGMENT
Milap Chandra Jain, J. (Chairman)
1. This application for revision was filed against the order of the Rajasthan Sales Tax Tribunal (now Rajasthan Tax Board), Ajmer dated March 6, 1996 allowing the second appeal and setting aside the orders of the assessing authority dated June 15, 1982 and also of the Deputy Commissioner (Appeals-II), Jaipur dated November 2, 1982. On the establishment of this Tribunal, it stood transferred to it under Section 15, Rajasthan Taxation Tribunal Act, 1995.
2. The facts of the case giving rise to this revision may be summarized thus : During the assessment year 1977-78, the assessee-respondent, purchased raw hides and skins of Rs. 8,76,879 against “H” forms for export to a firm of Madras. They were sent to it after some processing. Assessment order under Section 9 under Central Sales Tax Act, 1956 (in short, “the CST Act”) was passed on February 27, 1982 giving benefits under Section 5(3) of the CST Act. On May 20, 1982, notice under Section 12, Rajasthan Sales Tax Act, 1954 (in short, “the RST Act”) was issued on the ground that the raw hides and skins purchased on “H” forms lost their identity due to processing and as such the assessee was not entitled for the benefits under Section 5(3) of the CST Act. Accordingly, tax was levied by order dated June 15, 1982. The Deputy Commissioner (Appeals), Jaipur dismissed the appeal, confirming the said levy of tax. The assessee filed second appeal before the Rajasthan Sales Tax Tribunal, Ajmer and it was allowed by its order dated March 6, 1986 under challenge.
3. It has been contended by the learned counsel for the department that the Rajasthan Sales Tax Tribunal, Ajmer seriously erred in holding that the processing did not change the nature of the hides and skins and to set aside the levy of tax. He further contended that raw hides and skins were subjected to various processes bringing change in their nature and identity, and, thereafter, they were exported.
4. In reply, it was contended by the learned counsel for the assessee that the raw hides and skins remained hides and skins even after processing and as such the assessee was entitled to the benefits under Section 5(3), CST Act. He relied upon Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Shiphy International [1988] 69 STC 325 (SC), State of Tamil Nadu v. Mahi Traders [1989] 73 STC 228 (SC), and Calcutta Label Works v. Commercial Tax Officer, Monohar Katra Charge [1994] 95 STC 122 (WBTT).
5. Section 14(iii) of the CST Act runs as under :
“Hides and skins, whether in a raw or dressed state.”
Dressed hides and skins are included in the hides and skins. The Tribunal has held that after the treatment and processing of the raw hides and skins, they remained the same and the assessee was entitled to purchase raw hides and skins on forms “H”. Processing was done in order to preserve them. The Tribunal has relied upon the Circular No. SBT/18(495/14) dated November 11, 1957 issued by the Ministry of Commerce and Industry. It has been referred to in State of Tamil Nadu v. Mahi Traders [1989] 73 STC 228 (SC). It has been observed in it at page 233 as follows :
“Turning to coloured leather, we may, at the outset, refer to a very important circumstance referred to by the respondents. When the CST Act came into force on 1st April, 1957, a question was raised regarding the meaning of the expression ‘hides and skins in dressed state’ used in Section 14. The matter was referred to the Leather Development Wing of the Ministry of Commerce and Industry which gave the following opinion :
‘Hides and skins are obtained from either slaughtered or dead animals. The raw hides and skins thus obtained are known to be in the green state. These are easily putrescible ; if proper precautions are not taken they would easily rot and decay. Since tanneries are not always located very near the source of raw hides and skins, the question of preserving them for a temporary period till they reach a tanning centre assumes importance. Raw hides and skins are “cured” by either wet salting, dry salting or drying. In the “cured state” the raw materials can be preserved for a temporary period. In the third state of temporary preservation, the hides and skins are “picked”. During the next stage they are tanned in which state they can be preserved almost indefinitely. These tanned hides and skins are processed further to yield dressed hides and skins which are ready for use. “Dressed” or finished material could also be preserved almost indefinitely.
From the above, it will be seen that the expression “hides and skins in the raw or dressed state” refers at one end to the raw material obtained from the slaughtered or dead animals and at the other end to the tanned and finished material ; the expression, therefore, seems to include the other intermediate stages indicated in the previous paragraphs. Dressing, according to the authoritative interpretations, would mean the conversion of tanned hides and skins by further suitable processing into leathers of different types which are ready for use.’ [vide SBT/18(495/14) of November 11, 1957].”
6. It has further been observed at page 234 as follows :
“It has been pointed out by this Court in Desk Bandhu Gupta and Co. v. Delhi Stock Exchange Association Ltd. (1979) 4 SCC 565 ; [1979] 50 Comp Cas 84 and K.P. Varghese v. Income-tax Officer [1981] 131 ITR 597 (SC) that a contemporaneous exposition by the administrative authorities is a very useful and relevant guide to the interpretation of the expressions used in a statute. Considering that the above clarification was sought for at the earliest point to time when a doubt arose as to the scope of the expression used by the statute and given after considering the technicalities of the processes employed in the manufacture of finished leather by the department fully conversant with this branch of trade and in the context of the provisions of this very statute, the terms of the statute can well be construed by reference to such exposition, in the absence of anything in the statute to indicate the contrary. Indeed, ‘such, interpretation should be shown to be clearly wrong before it is overturned’.”
Reference of Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Pio Food Packers [1980] 46 STC 63 (SC) and Sterling Foods v. State of Karnataka [1986] 63 STC 239 (SC) and Calcutta Label Works v. Commercial Tax Officer, Monohar Katra Charge [1994] 95 STC 122 (WBTT) may be made here.
7. Para No. 7 of the order of the Rajasthan Sales Tax Tribunal, Ajmer runs as under :
“7. No arguments on the basic question of fact as to why the commodity exported be viewed different from one sold by the assessee, could be convincingly given to us by the learned counsel of the department.”
Same is the position here. Thus there is no substance in the revision.
8. Accordingly, the application for revision is dismissed. No order as to cost.