वेः स्कन्देरनिष्ठायाम्

Operational rule vidhi

ष् is optionally the substitute of the स् of स्कन्द् after the उपसर्ग (Preposition) वि but not in the participles in त and तवत.

Word by word (padaccheda)

Left context वेः pañcamī · ekavacanaTarget स्कन्देः ṣaṣṭhī · ekavacanaRight context अनिष्ठायाम् saptamī · ekavacana

Left context Pañcamī (5th case): "after X", the operation applies to what follows (1.1.67 तस्मादित्युत्तरस्य). Also used for limits and sources.
Target Ṣaṣṭhī (6th case): names what gets replaced, "in place of X" (1.1.49 षष्ठी स्थानेयोगा).
Right context Saptamī (7th case): "when X follows", the operation applies to what precedes (1.1.66 तस्मिन्निति निर्दिष्टे पूर्वस्य). Also a condition or domain ("in the sense of").

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Full reading

वेः स्कन्देः अनिष्ठायाम्

Pāṇini leaves out words that carry over from earlier sūtras. Expand to see the rule as a reader actually understands it.

Commentary

ष् is optionally the substitute of the स् of स्कन्द् after the उपसर्ग (Preposition) वि but not in the participles in त and तवत।
The root is स्कन्दिर् गति शोषणयोः ॥ Thus विष्कन्ता or विस्कन्ता, विष्कन्तुम् or विस्कन्तुम्, विष्कन्तव्यम् or विस्कन्तव्यम् ॥

Why do we say 'but not in the Nishtha'? Observe विस्कन्नः ॥

Śrīśa Chandra Vasu, The Ashtadhyayi of Panini (1897), via ashtadhyayi.com.