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Issues: (i) Whether the petitioners' sales to the State Trading Corporation and other local buyers were sales in the course of export within section 5(1) of the Central Sales Tax Act, 1956. (ii) Whether the import-related turnover in the ABMTM matter could be treated as a sale in the course of import within section 5(2) of the Central Sales Tax Act, 1956, or whether the matter required reconsideration on the question of agency and privity.
Issue (i): Whether the petitioners' sales to the State Trading Corporation and other local buyers were sales in the course of export within section 5(1) of the Central Sales Tax Act, 1956.
Analysis: Section 5(1) applies only where the sale itself occasions the export, or where the sale is effected by transfer of documents of title after the goods have crossed the customs frontiers of India. The decisive tests are privity of contract between the seller and the foreign buyer, and the existence of an inextricable link between the contract relied on and the actual export. Where the petitioners sold only to the State Trading Corporation or other local buyers, and the foreign buyer's contract was with the Corporation, the petitioners were merely intermediate sellers acting under separate contracts. The mention of f.o.b. terms, shipment arrangements, or participation in arbitration did not create privity or integrate the two contracts so as to make the petitioners the exporters in law. On the facts, the petitioners also failed to establish a qualifying high-seas sale by transfer of documents of title after crossing the customs frontiers.
Conclusion: The sales did not fall within section 5(1) and were not exempt as export sales.
Issue (ii): Whether the import-related turnover in the ABMTM matter could be treated as a sale in the course of import within section 5(2) of the Central Sales Tax Act, 1956, or whether the matter required reconsideration on the question of agency and privity.
Analysis: For a purchase or sale to be in the course of import, the import must be occasioned by the relevant contract, and the facts must show an integral connection between the import and the claimed sale, or an agency relationship making the intermediary a conduit for the real purchaser. The Board's order did not sufficiently examine whether the import was in substance for the ultimate user and whether the assessee acted merely as an agent, rather than as an independent contracting purchaser. Since the factual foundation was incomplete, a fresh examination of the collateral facts and the actual import arrangement was necessary before sustaining the revisional interference.
Conclusion: The import issue was remitted for reconsideration and was not finally answered on merits.
Final Conclusion: The export-related tax cases failed, but the import-related matter was sent back for fresh consideration on the limited question whether the assessee acted only as an intermediary or agent in the import transaction.
Ratio Decidendi: A sale is in the course of export or import only when the contract relied on directly occasions the export or import, or when the transfer of title occurs at the legally relevant stage after crossing customs frontiers; a separate contract between an intermediary and the domestic purchaser does not by itself confer export or import character absent privity or an established agency link.
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