ORDER [ENTITY], J.
1. The main common question which arises in these appeals filed under [SECTION] of the [ACT], for short "the [ACT]" is whether raw hides and skins and dressed hides and skins should be considered as one commodity for the purpose of claiming exemption of sales tax under [SECTION] of the [ACT], for short "the [ACT]".
2. The appellant in all these appeals is an Export Trading House engaged in the processing of meat and is having its unit at Rudraram in the State of Andhra Pradesh. In the course of processing of the meat, there emerges a bye-product called 'raw hides and skins'. These raw hides and skins have local market and are also sold to the exporters, who after tanning, export the tanned hides and skins outside the country.
3. A Division Bench of this Court in the case of State of Andhra Pradesh v. [ENTITY] and Company, , held that the tanned and untanned hides and skins constitute one commodity for the purpose of claiming exemption under [SECTION] of the [ACT]. The Supreme Court in the case of [PRECEDENT], , held that [SECTION] of the [ACT] relating to 'hides and skins, whether in a raw or dressed state' is comprehensive enough to include the products emerging from hides and skins such as tanned or dressed hides and skins, and therefore, such items are eligible for special treatment under [SECTION] of the [ACT]. According to the appellant, it, in the light ofthe above judgments of this Court and the Supreme Court, claimed exemption in respect of sale of raw hides and skins effected to the exporter, who have exported dressed hides and skins outside the country, under [SECTION] of the [ACT] by furnishing necessary 'H' Forms required for the purpose of claiming exemption in terms of [SECTION] of the [ACT]. The assessments under [ACT] for the years 1993-94 and 1994-95 were also finalised by the Assessing Authority granting exemption under [SECTION] of the [ACT] in respect of sale of raw hides and skins effected to the exporters who have exported the dressed hides and skins outside the country.
4. A Three-Judge Bench of the Supreme Court, subsequently, in [ENTITY] v. State of Tamil Nadu, (1998) 108 STC 258 (SC), has held that the raw and dressed hides and skins constitute two different goods. Basing on the said judgment of the Supreme Court, the Assessing Authority reopened the concluded assessments for the years 1993-94 and 1994-95 and also made provisional assessment orders for the years 1995-96, 1996-97 and 1997-98, disallowing the exemption claimed by the appellant in respect of sale of raw hides and skins effected to the exporters. Aggrieved by the orders passed by the Assessing Authority, the appellant preferred appeals before the Appellate [ENTITY] Hyderabad. Before the appellate authority, the appellant contended that raw and dressed hides and skins constitute one commodity, and therefore, the exemption claimed under [SECTION] of the [ACT] is in accordance with the law. The appellant also pressed into service the judgment of the Division Bench of this Court in State of Andhra Pradesh v. [ENTITY] and Company (supra). It was also contended that the judgment of the Supreme Court in the case of [ENTITY] v. State of Tamil Nadu (supra), does not apply to the facts of the case on hand since the Supreme Court was considering the entries relating to the local [ACT] and that the judgment was not given in the context of [SECTION] of the [ACT]. It was also further contended that, in any case, the judgment of the Supreme Court in the case of Ms. [ENTITY] (supra), would have only prospective effect and does not apply to the past assessment years. It was also contended that in view of the provisions of [SECTION] and [SECTION] of the [ACT], the appellant did not collect any tax from the exporter in view of the fact that the appellant had claimed exemption under [SECTION] of the [ACT] in respect of the sales of hides and skins effected to the exporter, and therefore, it is not permissible for the Assessing Authority to reopen the concluded assessments. The Appellate Deputy Commissioner (CT), by his common order dated 9-11-1998, allowed the appeals by holding that the judgment of the Supreme Court in the case of Ms. [ENTITY] (supra) would have only prospective effect and does not apply to the earlier transactions.
5. When the matter stood thus, the Commissioner of Commercial Taxes, in exercise of the revisional powers conferred on him under [SECTION] of the [ACT], sought to revise the order of the appellate authority. The same contentions as urged before the Appellate Deputy Commissioner (CT) were urged by the appellant before the Commissioner of Commercial Taxes also. The Commissioner of Commercial Taxes rejected the contentions of the appellant and revised the order of the appellate authority by his order dated 22-4-2000 in CCT's Ref No.L III(1)/2[SECTION]/1998 holding that in view of the judgment of the Supreme Court in the case of M/s. [ENTITY] (supra), the appellant is not entitled for exemption under [SECTION] of the [ACT] in respect of sale of raw hides and skins effected to the exporter. The Commissioner also opined that there is no evidence to show that all the hides and skins purchased from the appellant assessee are involved in the export. The Commissioner also held that the Judgment of the Supreme Court in [ENTITY]'s case (supra) would apply to the earlier period also, because, the Supreme Court did not direct implementation of the judgment prospectively only. Hence, these three appeals against the above order of the Commissioner of Commercial Taxes in respect of the assessment years 1993-94, 1994-95 and 1997-98.
6. It is stated in the affidavit filed by the appellant that it has been advised to file a separate writ petition questioning the assessment made for the year 1996-97.
7. Sri [ENTITY], learned senior Counsel appearing for the appellant would putforth the same contentions urged before the Commissioner for Commercial Taxes, and would further maintain that the respondents are bound by the decision of the Division Bench of this Court in the case of [ENTITY] and Company (supra) which has become final. Alternatively, the learned senior Counsel would contend that even assuming that the law laid down by the Supreme Court in [ENTITY]'s case (supra) is applicable to the facts of this case, even then, that judgment has to be applied only prospectively and it does not cover the past assessment years. The Special Government pleader for Taxes, on the other hand, would support the decision of the Commissioner of Commercial Taxes.
8. The hides and skins are 'declared goods of special importance' under [SECTION] of the [ACT]. In respect of 'declared goods', the rate of tax cannot exceed 4% and cannot be subjected to tax by any State at more than one point in a State under [SECTION] of the [ACT] read with [SECTION] of the [ACT]. The hides and skins have been classified under [SECTION] to the [ACT]. In respect of hides and skins, the levy of tax is adopted alternatively in the State of Andhra Pradesh.
9. [SECTION] of [ACT] reads as follows:
Notwithstanding anything contained in sub-section (1), the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export, if such last sale or purchase took place after and was for the purpose of complying with, the agreement or order for or in relation to such export.
10. Sub-section (3) was inserted by the [ACT], with retrospective effect from 1-4-1976. This Court in [PRECEDENT], held that in order to come within the purview of [SECTION] of the [ACT], (1) there must have been pre-existing agreement or order to sell the specific goods to a foreign buyer; (2) the last purchase referred to in sub-section (3) must have taken place after that agreement with the foreign buyer was entered into; and that (3) the last purchase must have been made for the purpose of complying with the pre-existing agreement or order Only if these three conditions are satisfied, then only, the transaction falls under sub-section (3) and such preceding sale is entitled to exemption under that sub-section. The additional condition which is required to be satisfied is with reference to the kind of goods, the export of which is dealt with by [SECTION] are the same goods which are referred to'earlier in the same sub-section. The words which appear in [SECTION] are "last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India". [SECTION] refers to export of "those goods" and reference is obviously to the goods referred to earlier. In the case of [PRECEDENT], , in Para (3) of the judgment, the Supreme Court observed as follows:
"It is clear on a plain reading of [SECTION] of the [ACT], that in order to attract the applicability of that provision, it is necessary that the goods which are purchased by an assessee for the purpose of complying with the agreement or order for or in relation to export, must be the same goods which are exported out of the territory of India. The words "those goods" in this subsection are clearly referable to "any goods" mentioned in the preceding part of the sub-section and it is therefore obvious that the goods purchased by the assessee and the goods exported by him must be the same. If by reasons of any processing to which the goods may be subjected after purchase, they change their identity so that commercially they can no longer be regarded as original goods, but instead become a new and different kind of goods and then they are exported, the purchases of original goods made by the assesse cannot be said to be purchased in the course of export".
Therefore, what is absolutely necessary to attract the applicability of the provisions of [SECTION] is that 'goods purchased or sold' and 'exported goods' must be the same goods. In other words, if the exported goods is different from the purchased goods, [SECTION] will have no application, and therefore, no exemption can be granted.
11. The judgment of the Supreme Court in [ENTITY]'s case (supra) is an authority to hold that dressed or tanned hides and skins are different from raw hides and skins. In that case, the appellants purchased raw hides and skins and after dressing, they were sold in the course of Inter-State trade. The contention of the dealers before the Assessing Authority was that hides and skins, whether in a raw or dressed form, are declared goods under [SECTION] of the [ACT] and they are regarded by the said Act as a single commodity. This being so, [SECTION] of the [ACT] read with Notification issued by State Government in G.O. No.3602, Revenue, dated 28th December, 1963, provides that the goods which have suffered tax once cannot be taxed again at the time of Inter State sale, as the tax had been levied at the time of purchase of raw hides and skins. Therefore, there should be no levy of tax on their inter-State sale after the said raw hides and skins had been dressed. The Assessing Authority did not accept the said contention as it was of the opinion that raw hides and skins were a commodity which were different from dressed hides and skins and, therefore, the restrictions contemplated by [SECTION] of the [ACT] were not applicable. The decision of the Assessing Authority was challenged by the appellants therein by taking recourse to the provisions under the Statute and after an adverse decision from the Sales Tax Tribunal, revision petitions were filed before the Madras High Court. Some of the appellants also chose to challenge the decision of the Assessing Authority as well as the constitutional validity of [SECTION] of [ACT], by filing writ petition before the Madras High Court. The Madras High Court while disposing of those revisions and writ petitions came to the conclusion that raw hides and skins was a commodity which was commercially different from dressed hides and skins both under the State Act as well as the [ACT] and that the State had the legislative competence to tax the Inter-State sale of dressed hides and skins, even though tax had been paid on the purchase of raw hides and skins. The Madras High Court further held that there was no merit in the challenge to the legality of the Entries which had been substituted in the Second Schedule by the [ACT].
12. The appellants, therefore, carried the matter further to the Supreme Court by way of civil appeals. It was contended before the Supreme Court that raw hides and skins and dressed hides and skins, irrespective of their state, are the same commodities. After 'raw hides and skins' are purchased, they are then dressed which has the effect of preserving them. They do not indicate any change and, therefore, 'raw hides and skins' or 'dressed hides and skins' cannot be considered as commercially separate commodities, the difference being only in form. This being so, it was contended, hides and skins can be taxed at only one stage in the State with the result that if they have been subjected to tax at the raw state under the Local Act, then [SECTION] of the [ACT] would have the effect of preventing tax being levied on dressed hides and skins. On the other hand, on behalf of the Revenue, it was contended that 'raw hides and skins' and 'dressed hides and skins' could be considered to be commercially distinct commodities under [SECTION] of the [ACT]. On behalf of the appellants, reliance was placed on the decisions of the Supreme Court in the cases of [PRECEDENT] (supra); [PRECEDENT], ; [PRECEDENT], and [PRECEDENT], . The Supreme Court on consideration of the above decisions and also the decisions of the Madras High Court in [ENTITY] v. State of Tamil Nadu, (1984) 56 STC 58 (Mad.) and [PRECEDENT]) and placing reliance on the decision of the Constitution Bench of the Supreme Court in [ENTITY] and Company v. State of Madras, , observed in [SECTION] of the judgment as under:
"13. From the aforesaid observations, it clearly follows that the Constitution Bench had, in no uncertain terms, come to the conclusion that raw hides and skins and dressed hides and skins were not one and the same commodity. Therefore, the first contention raised in the present case by the learned Counsel for the appellant cannot be accepted notwithstanding the reliance placed by them on the aforesaid decision in the case of Telangana Steel Industries case . It may here be noted that in none of these decisions was the attention of the learned Judges drawn to the aforesaid observations of the Constitution Bench in [ENTITY]'s case .
14. The other submission that [SECTION] of the [ACT], in any case, treats raw hides and skins and dressed hides and skins as one and the same commodity, because it is included in the same sub-heading in [SECTION] also stands concluded by [ENTITY]'s case . As already noted hereinabove, this Court specifically referred to these observations in [ENTITY]'s case, [PRECEDENT]), which had interpreted [SECTION] of the [ACT] to mean that hides and skins whether dressed or raw were a single commodity and this observation was disapproved when at Page 728 of STc (page 228 of SCR) this Court observed in [ENTITY]'s case, that "no reason is given why the two kinds of hides and skins are treated as a single commodity".
13. The Supreme Court overruled the judgment of the two Judge Bench of the Supreme Court in the case of [PRECEDENT] (supra) and disapproved the opinion handed down in the case of [PRECEDENT] (supra), on the ground that the Supreme Court in both the cases did not notice the binding decision of the Constitution Bench delivered in the case of [ENTITY] and Company (supra). The Supreme Court affirmed the opinion handed down by the Madras High Court in the case of [ENTITY] v. State of Tamil Nadu (supra) and in the case of [PRECEDENT] (supra). Therefore the argument advanced by the learned senior Counsel based on the decision of the Supreme Court in the case of [PRECEDENT] (supra), has no legs to stand. It is true that the Division Bench of this Court in the case of [PRECEDENT] (supra), where the dealer purchased in Andhra Pradesh raw hides and skins, tanned them and exported the tanned leather to a foreign buyer in order to fulfill a pre-existing contract, it was held that merely because particular goods are treated as different commodities for the purpose of the [ACT], it does not necessarily follow that these should be so treated as different goods for the purpose of [SECTION] of the [ACT] also. It was also held by the Division Bench that hides and skins, whether in 'raw or dressed state' occur as one item in [SECTION] of the [ACT]. The Division Bench opined that the question whether the goods purchased and the goods exported are the same or not has to be decided applying the test of commercial parlance, i.e., whether in commercial parlance, they are understood as different goods or as the same goods. The Division Bench ultimately opined that [SECTION] has full application to the facts of that case.
From the judgment of the Supreme Court in [ENTITY]'s case (supra), it seems that the judgment of the Division Bench of this Court in [PRECEDENT]'s case (supra), was not brought to the notice of the Supreme Court. However, it is relevant to note that by force of the ratio decidendi of the decision in [ENTITY]'s case (supra), the judgment of the Division Bench of this Court in [ENTITY]'s case (supra) stands overruled, and in the result, both the decisions on which the learned senior Counsel placed strong reliance in support of his contentions are of no help to the appellant.
14. The contention that the judgment of the Supreme Court in the case of [ENTITY]'s case (supra) would have only prospective effect and does not apply to the earlier assessment years is not acceptable to us. The declaration of law in [ENTITY]'s case applies to all sales and purchases, as the case may be, covered by [SECTION] of the [ACT], whether such sales or purchases were effected before or after the judgment. However, it is open for the Court, in a given case, to direct the implementation of the judgment prospectively only and not retrospectively. Wherever the Courts felt such a course of action was necessary to avoid prejudice and hardship to the parties and wherever implementation of the judgment with retrospective effect would unsettle the settled things for years resulting in chaos and confusion, the Courts have directed implementation of the concerned judgments prospectively only, as a departure from the general rule. Examples are the decisions of the Supreme Court in [PRECEDENT], ; Video Electronics Private Limited and another v. State of Rajasthan and another, (1988) 71 STC [SECTION] (SC), [PRECEDENT], C.B. Gautam v. Union of India and others, . But, the Supreme Court in [ENTITY]'s case, did not direct implementation of the judgment prospectively only. Therefore, we do not find any error on the part of the Commissioner of Commercial Taxes in not acceding to the request of the appellant to implement the law laid down by the Supreme Court in [ENTITY]'s case prospectively only. We also think that it is not appropriate for this Court to direct implementation of the law declared by the Supreme Court in [ENTITY]'s case prospectively only in the absence of such direction being issued by the Supreme Court in that case. Be that as it may, we do not find any extraordinary circumstance to direct the respondent authorities to implement the judgment of the Supreme Court in [ENTITY]'s case prospectively only.
15. The teamed senior Counsel placed reliance on the judgment of the Division Bench of this Court in [PRECEDENT], in support of his contention that the judgment of the Supreme Court in [ENTITY]'s case has to be implemented prospectively only and not with retrospective effect. The above judgment of the Division Bench of this Court does not, in our view, render any assistance to the appellant. In that case, the validity of G.O. Ms. Nos.77 and 78, dated 24-1-1987 issued by the State Government of Andhra Pradesh under [SECTION] of the [ACT] and granting a reduction in the rate of sales tax on the cement manufactured in the State, were challenged in the Supreme Court in the case of [PRECEDENT], . The Supreme Court quashed the said G.Os., as have been violative of [SECTION], [SECTION] and [SECTION] of the [ACT]. Consequently, demands were raised on manufacturers of cement in Andhra Pradesh for the difference between the tax paid by them at the concessional rates and the tax payable at the regular rates, for the period during which the Government orders in question were in force. When those demand notices were assailed in writ petitions, the Division Bench held that under [SECTION] of the [ACT], as it stood at the relevant time, a dealer who collected taxes in excess of the tax payable by him was liable to pay penalty. Since, when G.O. Ms. Nos.77 and 78 were in force, the petitioners did not collect any amount towards sales tax over and above the concessional rates prescribed in the said orders, the Court held, it would be unjust and unreasonable to permit the respondents to collect the amounts of difference of sales tax on the basis that the said G.Os., were not in force during the said period. The Division Bench after considering the judgments of the Supreme Court in [PRECEDENT], ; [PRECEDENT], ; [PRECEDENT]; [PRECEDENT] (supra); [PRECEDENT] (supra) and judgment of the Division Bench of this Court in [PRECEDENT], , where orders issued by the Governments under the Sales Tax Acts favouring sales of indigenous products on reduced rates of tax are found to be illegal and unconstitutional and noticing that the Supreme Court in such circumstances consistently directed that past transactions which took place on the strength of the impugned orders should not be reopened, the Division Bench allowed the writ petition and quashed the impugned demand notices.
16. The ultimate direction given by the Division Bench in the case of Coromandel Fetilizers Limited (supra) cannot be uniformly applied to all fact situations. Following the general trend of the directions given by the Supreme Court in cases of similar nature where the exemptions or concessions granted in favour of the locally manufactured products were held to be invalid, this Court gave similar directions. Moreover, the Court was faced with the situation where the notifications which were in favour of the assessee, were struck down. The situation here is quite different. Above all, the Commissioner by invoking the analogy of the decision of this Court in Coromandel Fetilizers case (supra) could not have chosen to accord prospective operation to the taw declared by the Supreme Court. The power of the Commissioner under [SECTION] of [ACT] cannot be placed on the same fooling as the power that could be exercised by Constitutional Courts under the extraordinary jurisdiction conferred on them. The alleged non-collection of sales tax from the purchaser/ exporter is not a ground available to the Commissioner to act contrary to the Supreme Court's decision.
17. The contention of the appellant that in view of the provisions of [SECTION] and [SECTION] of the [ACT], it was prohibited from collecting tax in respect of transactions on which it sought exemption, is misconceived and not acceptable to the Court. In the instant case, it cannot be said that non-collection of tax on the part of the appellant on sales effected by it to the purchaser was an act to perform an obligation imposed on the appellant under the provisions of [ACT] or any statutory order made thereunder. The appellant has staled that it did not collect sales tax from the exporter because it sought exemption which was granted, and that it was seeking exemption under [SECTION] of the [ACT] fortified by the decision of this Court in the case of [ENTITY] and Company (supra). That circumstance itself would not be a legal justification to avoid the liability to pay sales tax in respect of the goods sold to the exporter during the concerned period. If the petitioner by force of law is liable to pay sales tax in respect of the transactions effectuated, whether before or after the judgment of the Supreme Court in [ENTITY]'s case, it cannot avoid that liability solely on the ground that it did not collect sales tax on the sales made by it from the purchaser. In that view of the matter, we hold that the appellant is liable to pay sales tax even in respect of sales transactions entered into between it and the exporter even before 27-11-1997 which is the date of the judgment of the Supreme Court in [ENTITY]'s case (supra).
18. In the result and for the foregoing reasons, we do not find any merit in these appeals, and accordingly, they are dismissed, with no order as to costs. However, we direct that no coercive steps should be taken for recovery of the disputed lax for a period of one month.