Export-linked packing material sales qualify for tax exemption when treated as part of the exported commodity.

The exemption for the last sale or purchase forming part of an export transaction under section 5(3) of the Central Sales Tax Act extends to packing material sold as part of the export-linked supply chain. Polythene bags used to pack exported banians were treated as integral to the exported commodity, and the absence of a specific reference to the bags in the bill of lading did not alter their export-connected character. The sale was therefore regarded as part of the course of export and not liable to tax.

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Issues: Whether the sale of polythene bags used for packing goods exported out of India was a sale in the course of export and therefore exempt from tax.

Analysis: The exemption under the sales tax law extended to the last sale or purchase of goods which formed part of the export transaction under section 5(3) of the Central Sales Tax Act, 1956. The goods sold by the assessees were polythene bags used for packing banians that were admittedly exported, and the packing material was treated as part and parcel of the exported commodity. The absence of a specific reference to the packing material in the bill of lading did not displace the fact that the bags were sold as part of the export-linked transaction and that title passed along with the exported goods.

Conclusion: The sale of the polythene bags was covered by section 5(3) and was not liable to tax.

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