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Issues: (i) What is the proper test for determining whether goods purchased locally and goods exported are the same goods for the purpose of section 5(3) of the Central Sales Tax Act, 1956. (ii) Whether raw cashewnuts with shell purchased locally and cashew kernels exported are the same commercial commodity so as to attract exemption under section 5(3) of the Central Sales Tax Act, 1956.
Issue (i): What is the proper test for determining whether goods purchased locally and goods exported are the same goods for the purpose of section 5(3) of the Central Sales Tax Act, 1956.
Analysis: The decision surveyed the common parlance, commercial parlance, user, and substantial identity approaches used in sales tax jurisprudence. It held that no single test universally overrides the others. The applicable test depends on the nature of the commodity and the statutory context, with the court required to apply the principle that best fits the goods and the factual setting.
Conclusion: The proper test is context-dependent, and the substantial identity analysis in commercial parlance is relevant for section 5(3) cases.
Issue (ii): Whether raw cashewnuts with shell purchased locally and cashew kernels exported are the same commercial commodity so as to attract exemption under section 5(3) of the Central Sales Tax Act, 1956.
Analysis: The court held that the earlier decision concerning cashew and its kernel directly dealt with the same commodity question and remained binding under Article 141 of the Constitution of India. Applying the commercial identity approach, the court concluded that raw cashewnuts with shell and cashew kernels are commercially distinct commodities. Since the goods exported were not the same as the goods purchased, section 5(3) did not exempt the local purchases from sales tax.
Conclusion: Raw cashewnuts with shell and cashew kernels are not the same goods, and the petitioners were not entitled to relief under section 5(3) of the Central Sales Tax Act, 1956.
Final Conclusion: The petitions failed because the local purchases of raw cashewnuts with shell did not qualify as purchases of the same goods ultimately exported, and the sales tax levy was upheld.
Ratio Decidendi: For section 5(3) of the Central Sales Tax Act, 1956, the goods purchased and the goods exported must retain the same commercial identity; if processing produces a commercially distinct commodity, the local purchase is not protected as a sale in the course of export.
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