Export sale under section 5(1) depends on post-customs transfer of title documents, while purchase tax may be estimated absent proof of exemption.

A sale qualifies as an export sale under the second limb of section 5(1) of the Central Sales Tax Act only if the transfer of documents of title occurs after the goods have crossed the customs frontiers of India; a denial of export character must rest on findings on both statutory conditions from the record. The tax authority's negative finding was therefore unsustainable where those requirements were not examined on the material before it. On purchase tax, the assessee bore the burden of proving exemption for construction materials, and failure to show purchases only from registered dealers justified best judgment estimation of unregistered purchases; the purchase tax was upheld.

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Issues: (i) Whether sales effected by transfer of documents of title after the goods had crossed the customs frontiers of India were covered by the second part of section 5(1) of the Central Sales Tax Act and therefore constituted sales in the course of export; (ii) whether purchase tax on material purchased for construction work was rightly imposed.

Issue (i): Whether sales effected by transfer of documents of title after the goods had crossed the customs frontiers of India were covered by the second part of section 5(1) of the Central Sales Tax Act and therefore constituted sales in the course of export.

Analysis: The second limb of section 5(1) applies only when two conditions are satisfied, namely, that the sale is effected by transfer of documents of title to the goods and that the transfer occurs after the goods have crossed the customs frontiers of India. A finding on both conditions must be recorded on the material of the particular case before the sale can be denied export character. The Board did not address these requirements on the record of the present assessment and instead relied on a decision relating to a later year.

Conclusion: The negative finding recorded by the Board was not justified in the absence of findings on the two statutory conditions, and the issue is answered in favour of the assessee.

Issue (ii): Whether purchase tax on material purchased for construction work was rightly imposed.

Analysis: The assessee had the burden of proving exemption from purchase tax. The material on record did not establish that the purchases were confined to registered dealers. The revenue authorities were therefore justified in resorting to best judgment assessment for estimating purchases from unregistered dealers, and the estimate made was neither excessive nor capricious.

Conclusion: The imposition of purchase tax on the material purchased for construction work was upheld, and this issue is decided against the assessee.

Final Conclusion: The reference was disposed of with the export-sale question answered in favour of the assessee and the purchase-tax question answered against the assessee, leaving the parties to bear their own costs.

Ratio Decidendi: A sale can qualify as an export sale under the second part of section 5(1) only if the transfer of documents of title occurs after the goods have crossed the customs frontiers of India, and a denial of that claim must rest on findings on both statutory conditions from the record of the case.

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