Wa `alaykkum salaam wa rahmatullaahi wa barakaatuh
There are a few narrations regarding this topic and some of them are:
1) Narrated Ibn ‘Abbas radiAllaahu `anhu: Allaah’s Messenger :saw2: said, “When the skin is tanned it becomes purified.” [Reported by Muslim].
2) Narrated Salama bin Al-Muhabbiq radiAllaahu `anhu: Allaah’s Messenger :saw2: said, “The tanning of a dead animal’s skin purifies it”. [Ibn Hibban graded it Sahih (sound)].
3) Narrated Maimuma radiAllaahu `anhaa: Some people dragging a (dead) goat passed by the Prophet :saw2:. He told them, “If you had taken its hide (it would be better)”. They said, “It is dead”. He said, “Water and the leaves of the Acacia tree will purify it”. [Reported by Abu Dawood and An Nasaa’ee].
Based on this, scholars have had differed about the ruling of the animal skin. The Dhaahiriyyah were of the view that any animal's skin that is tanned is pure, while the Hanafiyyah (hanafi madhhab) said that every animal's skin that is tanned is pure, except the pig, whereas the Shafi`iyyah (shafi`ee madhhab) said that every animal's skin that is tanned is pure, with the exception of the dog and pig.
On the other hand the Hanaabilah (hanbali madhhab) said that the animal skin that is tanned is NOT pure.
The correct view is that of Shaykh ul islaam Ibn Taymiyyaah, `Abdullaah ibn al Mubaarak, al Awzaa`ee and one of the views narrated from Imaam Ahmed, and that is:
It is permissible to tan the skin of any animal that has been made permissible to eat (even if the animal is not slaughtered in shari`ah terms) and Shaykh ibn al `uthaymeen explains this: " And it was said that the skin of an animal that died without being slaughtered correctly may be purified by means of tanning so long as it comes from an animal that may be made permissible by means of proper slaughter. But if it cannot be made permissible by means of proper slaughter, then it cannot be purified. This view is most likely to be correct. Based on that, the skin of a cat and any smaller animal cannot be purified by means of tanning.
The ruling is connected to whether the animal is regarded as taahir (pure) when it is alive. If it is taahir (pure), then it is permissible to use the skin of that animal if it died without being slaughtered properly, after tanning it once it has dried. But according to the madhhab it cannot be purified. According to the second opinion, it can be purified, and according to the third opinion, it becomes pure through tanning if it is from a dead animal that would be permissible (to eat) if slaughtered properly.
The most correct view is the third one, based on the fact that in some versions of the hadeeth it says: “Its tanning is its purification” (narrated by al-Nasaa’i, 4243; classed as saheeh by al-Haafiz ibn Hajar in al-Talkhees al-Habeer, 1/49). So the word purification was used, and it is well known that slaughter does not purify anything except that which it is permissible to eat. If you slaughtered a donkey and mentioned the name of Allah over it and shed its blood, it still could not be called halaal slaughter.
Based on this we say: the skin of an animal that it is haraam to eat, even if it is regarded as taahir when alive, cannot be purified by tanning.
The reason for that is that the animal that is taahir when it is alive was regarded as taahir because it is too difficult to avoid them completely, because the Prophet (blessings and peace of Allah be upon him) said: “They are among those who go around among you” -- referring to cats. This hadeeth was narrated by al-Tirmidhi (92), Abu Dawood (75), al-Nasaa’i (68) and Ibn Maajah (368), and was classed as saheeh by al-Bukhaari, al-Tirmidhi, al-Daaraqutni and al-‘Aqeeli, as stated by Ibn Hajar in al-Talkhees al-Habeer (1/41). This reason ceases to apply when the animal dies, whereupon it goes back to its original state, which is najaasah (impurity), and it cannot be purified by means of tanning.
So the correct view is that any animal that dies and may be eaten, its skin is purified by tanning. This is one of the two opinions of Shaykh al-Islam Ibn Taymiyah (may Allah have mercy on him); he has another opinion which is in accordance with the view of those who say that whatever was taahir when it was alive, its skin may be purified by tanning."
And not only that, but there is another narration where the Messenger of Allaah :saw2: forbade us from wearing clothes made from animal skins (apart from the animals permissible to eat). It was narrated that al-Miqdaam ibn Ma’diyakrib (may Allaah be pleased with him) said: I heard the Messenger of Allaah (peace and blessings of Allaah be upon him) forbidding the wearing of animal skins or riding on saddles made from them.
Narrated by Abu Dawood, 4131; classed as saheeh by al-Albaani in Saheeh Abi Dawood, 3479.
And Allaah knows best
Wassalaamu `alaykkum