Export-sale exemption under sales tax law is confined to section 5(1), not section 5(3), for purchase tax purposes.

Section 9(1) of the Haryana General Sales Tax Act was construed to confine exemption to export sales within section 5(1) of the Central Sales Tax Act, so protection under section 5(3) was unavailable for the relevant period. The Court further noted that the assessees' transactions could only be local sales, inter-State sales, or sales in the course of export, and section 9(1) could not sustain purchase tax on an incorrect contrary assumption. Liability was not saved by section 6, which did not create a fresh tax burden on the purchases, or by section 24(3), which did not apply and had earlier been struck down. The purchases of raw materials were therefore not taxable on these facts.

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Issues: (i) Whether purchase tax under section 9(1) of the Haryana General Sales Tax Act, 1973 was attracted when the manufactured goods were sold in transactions claimed to fall within the course of export; (ii) whether the assessees' sales of manufactured goods could be treated as local sales, inter-State sales, or sales in the course of export so as to fall outside section 9(1); and (iii) whether the levy could nevertheless be supported under section 6 or section 24(3) of the Haryana General Sales Tax Act, 1973.

Issue (i): Whether purchase tax under section 9(1) of the Haryana General Sales Tax Act, 1973 was attracted when the manufactured goods were sold in transactions claimed to fall within the course of export.

Analysis: The language of section 9(1), as amended, was held to confine the exemption to sales in the course of export within the meaning of section 5(1) of the Central Sales Tax Act, 1956. The Court found that the Legislature had deliberately used restrictive words and that the later deletion of the reference to section 5(1) was not retrospective for the relevant period.

Conclusion: The claim for exemption under section 9(1) on the footing of section 5(3) failed.

Issue (ii): Whether the assessees' sales of manufactured goods could be treated as local sales, inter-State sales, or sales in the course of export so as to fall outside section 9(1).

Analysis: On the facts, the Court held that the sales made by the assessees could only fall within one of three categories: local sales, inter-State sales, or sales in the course of export. Since the transactions did not fall in the taxable category under section 9(1), the purchase tax could not be sustained on the contrary assumption advanced by the Revenue.

Conclusion: The alternative contention of the assessees was accepted and section 9(1) did not justify the levy.

Issue (iii): Whether the levy could nevertheless be supported under section 6 or section 24(3) of the Haryana General Sales Tax Act, 1973.

Analysis: The Court held that section 6 did not create a fresh taxable burden on these purchases because the definition of turnover and the scheme of tax incidence did not permit the same transaction to be taxed as a purchase in the hands of the assessees when tax would otherwise arise only on sale. Section 24(3) also did not assist the Revenue, both because the assessees' transactions fell within the exempted categories and because that provision had been declared ultra vires in earlier litigation.

Conclusion: The levy could not be sustained under section 6 or section 24(3).

Final Conclusion: The purchases of raw materials were not chargeable to tax under the Act on the facts of these cases, and the assessees were entitled to relief.

Ratio Decidendi: Where a sales tax statute grants exemption only for export sales within the meaning of section 5(1) of the Central Sales Tax Act, 1956, that exemption does not extend to transactions protected only by section 5(3); however, a purchase tax on raw materials cannot be sustained if the resulting transactions fall within the exempt categories of local sale, inter-State sale, or export sale, and the charging and turnover provisions do not independently authorise double taxation.

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