Penultimate export purchase exemption applies only to the immediate transaction preceding export, not an earlier dealer purchase.

Section 5(3) of the Central Sales Tax Act, 1956 exempts only the transaction that is the immediate penultimate sale or purchase occasioning export. The petitioner's in-State purchase turnover was one step removed from the export, because the export sale was made by another dealer to the foreign buyer. As the petitioner's purchase did not immediately precede and occasion the export, it did not satisfy the statutory requirement for exemption. The turnover was therefore outside section 5(3), and the exemption was correctly denied.

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Issues: Whether the petitioner's purchase turnover qualified for exemption under section 5(3) of the Central Sales Tax Act, 1956 as the penultimate purchase preceding export.

Analysis: Section 5(3) grants exemption only to the purchase or sale that immediately precedes the export and occasions such export. The turnover in question represented purchases made by the petitioner within the State, while the export sale was effected by the Bombay exporter to the foreign buyer. The petitioner's purchase was one step removed from the export and was not the immediate penultimate transaction connected with export.

Conclusion: The petitioner's turnover did not fall within section 5(3) of the Central Sales Tax Act, 1956, and the exemption was rightly denied.

Ratio Decidendi: Only the transaction that is the immediate penultimate sale or purchase occasioning export qualifies under section 5(3) of the Central Sales Tax Act, 1956; an earlier inter-State purchase by a dealer preceding the exporter's purchase does not.

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