Export sale test: Separate procurement sales to an intermediary were held not to be sales in the course of export.

Sales to the State Trading Corporation were not sales in the course of export because the decisive test is whether the sale itself occasions the export or is its immediate and direct cause. Here, the assessee's contract with the Corporation was a separate procurement arrangement, while the export was occasioned by the Corporation's contract with the foreign buyer. The Corporation acted as a statutory intermediary, and the absence of privity with the overseas buyer showed that the assessee's sale was not in the stream of export. FOB terms, similar commercial conditions, and the canalised export scheme did not alter that character, so the sales remained taxable and the exemption failed.

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Issues: Whether the sales made by the assessee to the State Trading Corporation were sales in the course of export and therefore exempt from tax under the Central Sales Tax Act.

Analysis: The decisive test was whether the sale in question itself occasioned the export or was the immediate and direct cause of it. The contracts with the State Trading Corporation and the foreign buyer were separate contracts, and the Corporation stood as a statutory intermediary between the assessee and the overseas buyer. The export was occasioned by the contract between the Corporation and the foreign buyer, while the assessee's contract with the Corporation was only a procurement arrangement to enable performance of that export contract. The f.o.b. terms, similarity of commercial conditions, and the canalised export scheme did not convert the assessee's sale into the export sale. The presence of an intermediary and the absence of privity between the assessee and the foreign buyer showed that the assessee's sale was not itself in the stream of export.

Conclusion: The sales to the State Trading Corporation were not sales in the course of export and were exigible to tax; the exemption claim failed.

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