Sales in the course of export to Nepal were exempt because the seller transported goods across the border under the contract.

Sales to dealers in Nepal were treated as sales in the course of export because the contract required the assessee to transport the goods beyond the Indian frontier into Nepal. On the accepted factual materials, the assessee itself carried the goods across the border and the movement into Nepal was not an independent act of the buyers. That brought the transactions within constitutional protection for sales in the course of export, and they were exempt from sales tax.

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Issues: Whether the sales made to dealers in Nepal were sales in the course of export out of the territory of India and therefore exempt from tax.

Analysis: The decisive question was whether the assessee had undertaken, under the contract of sale, an obligation to transport the goods beyond the Indian frontier into Nepal. On the materials accepted in the supplementary statement, the goods were transported by the assessee across the border and the movement to Nepal was not an independent act of the buyers. That factual finding brought the transactions within the constitutional protection for sales in the course of export.

Conclusion: The sales were in the course of export out of the territory of India and were exempt from sales tax.

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