Sales in the course of import prevailed over inter-State tax arguments; binding Supreme Court precedent was applied.

Sales in the course of import under section 5(2) of the Central Sales Tax Act were treated as exempt where the transactions were found to fall within the import chain. The department's alternative contention that the same sales were also liable as inter-State sales was rejected because a Supreme Court decision on materially similar facts was binding and had to be followed. The Court held it could not refuse to apply that precedent on the basis that a different argument might have produced a different result. The challenge therefore failed and the petition was dismissed with costs.

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Issues: Whether the respondents' sales were exempt as sales in the course of import under section 5(2) of the Central Sales Tax Act, 1956, and whether the department could still require a reference on an additional point despite the binding effect of the Supreme Court decision in the similar factual situation.

Analysis: The sales were held to fall within the course of import, and the department's alternative contention that they were also liable as inter-State sales was rejected in view of the Supreme Court's ruling on materially similar facts. The Court held that it was bound to follow that decision and could not decline to apply it on the assumption that a different argument might have led to a different result.

Conclusion: The challenge failed, and the petition was dismissed with costs.

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