Export sales and concessional inputs: additional levy under Section 3(4) held inapplicable to export transactions.

Export sales of goods manufactured with concessional inputs were treated as outside the additional levy under Section 3(4) of the Tamil Nadu General Sales Tax Act, 1959, because that provision applies only where the dealer, after availing the concessional rate under Section 3(3), does not sell the manufactured goods but despatches them outside the State by branch transfer, transfer to an agent, or a like mode. The Court held that export sales cannot be brought within the residual phrase "in any other manner", which must be read ejusdem generis with the preceding forms of despatch. It further held that Article 286(1)(b) and Section 5 of the Central Sales Tax Act protect sales in the course of export, and that such transactions do not attract the additional levy. The levy on that basis was unsustainable.

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Issues: Whether export sales of goods manufactured with concessional inputs fall outside the charging ambit of Section 3(4) of the Tamil Nadu General Sales Tax Act, 1959, and whether such transactions are protected by the constitutional prohibition against State taxation on exports.

Analysis: Section 3(4) was held to operate only where, after availing the concessional rate under Section 3(3), the dealer does not sell the manufactured goods but despatches them outside the State by branch transfer, transfer to an agent, or in any other like manner. The Court held that export sales cannot be treated as falling within that residual expression, because Article 286(1)(b) prohibits State taxation on sales in the course of export and Section 5 of the Central Sales Tax Act, 1956 treats such transactions as export sales. The Court also held that, for the purposes of the Act, export transactions satisfy the definition of sale under Section 2(n) and Explanation 3(a), and therefore do not attract the additional levy under Section 3(4). The Court further held that the expression "in any other manner" must be read ejusdem generis with the preceding forms of despatch and cannot be extended to export sales.

Conclusion: Section 3(4) does not apply to export sales, and the levy raised on that basis was unsustainable.

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