STATE OF TAMIL NADU versus MAHI TRADERS & ORS. ETC. ETC.

Citation: [1989] 1 S.C.R. 445 · Decided: 03-02-1989 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Dismissed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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STATE OF TAMIL NADU 
v. 
MAHI TRADERS & ORS. ETC. ETC. 
FEBRUARY 3, 1989 
[SABYASACHI MUKHARJI AND S. RANGANATHAN, JJ.) 
Central Sales Tax Act, 1956: Sections 14(J)(iii) & 15-'Leather 
splits', 'Coloured leather'-Whether hides and skins-Eligibility for 
special treatment under the Act. 
A 
B 
Statutory construction-Contemporaneous exposition-Opinion 
C 
rendered on meaning of statutory expressions by the Department 
concerned-The terms of the statute can be construed by reference to 
such exposition-In the absence of anything in the statute to indicate the 
contrary. 
Words & phrases: 'Leather sp/its'-Meaning of. 
The respondents are dealers in hides and skins. They deal among 
other things in splits and coloured leather. The splits are the cut pieces, 
small and irregular, obtained in the process of cutting raw or tanned 
hides and skins either with a view to reduce their thickness or to give 
them a regular shape. Coloured leather is obtained when the tanned 
hides and skins are dyed with various colours. The claim of the respon-
dents is that these two items fall in the list of "goods of special import-
ance in inter-State trade and commerce" set out ins. 14 of the Central 
· Sales Tax Act and, therefore, entitled to the concessions available under 
s. 15 of the· Act, namely the benefits of single point taxation and of a 
smaller rate of tax. Such claims were allowed by the. assessing authority 
D 
E 
F 
in respect of coloured leather and in respect of splits he disallowed the 
claims. The Appellate Assistant Commissioner upheld the order of the 
assessing authority. The Board of Revenue negativated the contention 
that leather splits continued to be dressed skins under declared goods of 
inter-State importance and held that these splits are to be treated as 
'scraps' or to be taxed at the multiple rates. As regards coloured leather G 
the Board held that these are commercially different products and that 
the exemption granted was not correct. The tribunal, in certain cases, 
had held that the assessee was entitled to the concessions claimed in 
respect of both items. 
The respondents moved the High Court by way of Writ Petitions 
445 
H 
I 
446 
SUPREME COURT REPORTS 
11989] 1 S.C.R. 
A and tax revision cases and the High Court upheld the claim of the 
respondents, holding that 'splits' and 'coloured leather' continue to be 
hides and skins eligible for special treatment under the Central Sales 
Tax Act. 
The present appeals by special leave are against those judgments 
B of the High Court. 
The contentions of the appellant-State were that the leather splits 
or cuttings are "scrap" and do not qualify any longer to be described 
merely as hides and skins and that coloured leather is a totally new and 
sophisticated product known as leather and can no longer be described 
C 
merely as hides and skins and as such cannot qualify for exemption. 
On behalf of the respondents, a reference was made to certain 
circulars of the authorities which contain a contemporaneons exposition 
of the meaning of the entry in question and contended that, to say that 
one item being called scraps and the other as leather would not be 
D sufficient to take them out of the description "hides and skins, in a raw 
or dressed state" and cuttings of hides and skins would not cease to be 
hides and skins merely because they are small pieces and can be loosely 
described as "scraps". As for coloured leather, it was contended that 
the exact scope of the expression used in entry (iii) of s. 14(1) which 
referred to 'hides and skins whether in a raw or dressed state' would 
E 
have to be looked into. 
Dismissing the appeals, 
HELD: 1.1. The High Court was right in holding that 'splits' and 
'coloured leather' continue to be bides and skins eligible for special 
),
F 
treatment under the Central Sales Tax Act. l456EI 
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1.2 A contemporaneous exposition by the administrative autho-
rities is a very useful and relevant guide to the interpretation of the 
expressions used in a statute. Considering that the clarification was 
sought for from the Ministry of Commerce at the earliest point of time 
G when a doubt arose as to the scope of the expression used by the statute 
and given after considering the technicalities of the processes employ~'(! 
in the manufacture of finished leather by the department fully con-
versant with this branch of trade and in the context of the provisions of 
this very statute, the terms of the statute can well be 

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