Export sale exemption fails where evidence shows a local sale to the exporter rather than an agency arrangement.

Export exemption was denied because the evidence did not establish that the local exporting houses acted as the assessee's agents. The correspondence supported the finding that the assessee sold the goods to those houses on their own account, and that the subsequent export was undertaken by them in their own right. On that characterisation, the turnover constituted local sales under the Tamil Nadu General Sales Tax Act, 1959 and was liable to sales tax. The exemption claim therefore failed, and the Revenue's tax assessment was upheld.

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Issues: Whether the disputed turnovers were export sales exempt from sales tax, or local sales liable to tax under the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The claim of exemption depended on whether the local exporting houses acted merely as agents of the assessee or purchased the goods on their own account for resale to foreign buyers. The finding accepted that the correspondence did not show any agency relationship and supported the conclusion that there was a local sale by the assessee to the exporting houses, enabling them to export the goods in their own right. The agreed reasoning treated the transactions as taxable local sales rather than exempt export sales.

Conclusion: The turnover was held liable to sales tax and the exemption claim failed, in favour of the Revenue.

Final Conclusion: The appeal did not succeed, and the assessment position that the transactions were taxable was upheld.

Ratio Decidendi: A transaction is not an exempt export sale where the evidence does not establish that the local exporter acted as the assessee's agent and the sale is properly characterised as a local sale to the exporter.

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