Resale exemption under sales tax law depends on the local statutory meaning, not Central Sales Tax export restrictions.

The exemption notifications had to be construed by giving "resale" the meaning in the Bombay Sales Tax Act, not by importing the wider restrictions of the Central Sales Tax Act. The local situs rule from the Central Act was relevant only to decide whether a sale or purchase occurred inside the State, while the constitutional limits on taxing exports or inter-State sales did not control the construction of the exemption. On that footing, the goods were resold within the State in the statutory sense, so the purchasers were entitled to exemption and no purchase tax was payable.

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Issues: Whether purchases of declared goods from unregistered dealers were liable to purchase tax under section 7A of the Bombay Sales Tax Act, 1953, or were exempt because the goods had been purchased for resale within the meaning of the relevant notifications.

Analysis: The expression "resale" in the exemption notifications had to bear the same meaning as in section 2(13) of the Bombay Sales Tax Act, 1953, read with section 20 of the Bombay General Clauses Act, 1904. The incorporation of section 4(2) of the Central Sales Tax Act, 1956 into the Bombay Act was limited to determining whether a sale or purchase took place inside the State. It did not import the restrictions in sections 3 and 5 of the Central Sales Tax Act, 1956 for the purpose of construing the exemption notifications. The constitutional bans in article 286 of the Constitution of India curtailed the State's taxing power, but did not prevent the State from defining the situs of a transaction for purposes of exemption. The goods were resold by the applicants within the State in the statutory sense, even though the ultimate sale to the foreign buyer occasioned export.

Conclusion: The applicants were entitled to claim exemption under the notifications and were not liable to purchase tax on the disputed purchases.

Final Conclusion: The references were answered in favour of the applicants, and the levy of purchase tax on the disputed purchases was set aside.

Ratio Decidendi: Where a taxing notification incorporates only the local situs rule from another statute, the words used in the notification must be construed according to the parent Act's definition, and constitutional prohibitions on taxing export or inter-State sales do not control the construction of a separate exemption on local purchases.

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