Export-linked purchase exemption fails where local purchase is not itself part of an inextricable export transaction.

Cotton purchased by a local dealer and sent to an export house for onward sale to foreign buyers did not qualify for exemption under the sales tax notification issued under section 4(2) of the Rajasthan Sales Tax Act. The purchase was not inextricably linked with export, because there was no binding contract or statutory obligation making the purchaser itself the exporter. A purchase made only for eventual export by another entity is not a transaction in the course of export, and exemption is unavailable. The lower appellate view was rejected and the assessment demand was restored.

---

---

Issues: Whether cotton purchased and sent to an export house for onward sale to foreign buyers fell within the exemption under the notification issued under section 4(2) of the Rajasthan Sales Tax Act.

Analysis: The assessee claimed exemption on the footing that the cotton was purchased for export through an export house. The Court held that an identical issue had already been decided, where it was ruled that purchase by a local dealer and subsequent export by another entity did not amount to a sale occasioning export. The transaction of purchase was not inextricably linked with export, and there was no binding contract or statutory obligation making the assessee itself the exporter for purposes of exemption.

Conclusion: The exemption was not available and the demand made by the assessing authority was . The Tribunal erred in setting aside the orders of the lower authorities.

Final Conclusion: The revision was allowed and the orders of the assessing and appellate authorities were restored.

Ratio Decidendi: A purchase made for eventual export by another party does not itself constitute a transaction in the course of export so as to attract exemption under the sales tax notification.

---