Article 286 export exemption requires the sale itself to occasion export; separate onward movement remains taxable.

A sale completed within Orissa to an intermediary was held not exempt under Article 286 because the dealer's transaction did not itself occasion export or constitute inter-State trade; the later movement of goods under a separate arrangement with mills outside the State was legally distinct and did not change the tax character of the original sale. The Court also held that reference jurisdiction under the local sales tax law was limited to correcting an insufficient statement of case and did not permit a remand for fresh evidence on a new factual plea. The dealer's contention failed and the assessment was upheld.

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Issues: (i) Whether the transaction between the dealer and the intermediary was exempt from sales tax under Article 286 of the Constitution as a sale in the course of export or inter-State trade. (ii) Whether the High Court could direct a re-statement of the case so as to permit additional evidence on a new factual contention in reference proceedings under the local sales tax law.

Issue (i): Whether the transaction between the dealer and the intermediary was exempt from sales tax under Article 286 of the Constitution as a sale in the course of export or inter-State trade.

Analysis: The sale to the intermediary was found, on the assessment records and the dealer's own books, to have been completed within Orissa at Bargarh. The subsequent movement of goods to mills outside the State was effected under a separate arrangement between the intermediary and those mills, and did not arise from the sale made by the dealer. Article 286(1)(b) protects sales which themselves occasion the export, and Article 286(2) applies only where the sale is in the course of inter-State trade or commerce. On the facts found, the dealer's sale was neither the occasion of export nor an inter-State sale. The later constitutional restriction in section 30 of the local Act also did not assist the dealer on these facts.

Conclusion: The transaction was not exempt under Article 286 and was taxable in Orissa; the contention was rejected.

Issue (ii): Whether the High Court could direct a re-statement of the case so as to permit additional evidence on a new factual contention in reference proceedings under the local sales tax law.

Analysis: The reference jurisdiction under section 24(4) of the local Act is limited to requiring additions or alterations to an insufficient statement of the case. It does not authorise the Court to remand the matter for a fresh inquiry or to allow evidence on a new factual point that was not before the assessing authorities. The provision was treated as analogous to section 66(4) of the Indian Income-tax Act, 1922. Since the requested course would have gone beyond that limited jurisdiction, the contention failed.

Conclusion: The Court had no power to direct a fresh evidentiary re-statement on the new factual plea.

Final Conclusion: The reference was answered against the dealer, and the sales tax assessment was upheld.

Ratio Decidendi: A sale is exempt under Article 286 only when the sale itself occasions the export or qualifies as inter-State trade on the facts found; a completed intra-State sale followed by a separate onward sale or export arrangement does not attract that exemption, and reference jurisdiction cannot be expanded to take fresh evidence on a new factual basis.

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