Same commercial identity test governs export exemption; suppression-based reassessment and penalty were sustained on the record.

Section 5(3) of the Central Sales Tax Act, 1956 applies only where the goods purchased and the goods exported are the same commercial commodity; raw hides and skins and dressed hides and skins were treated as different commodities, so exemption was unavailable. The refixation of suppression was upheld because excess stock, unaccounted finished leather and an unrecorded purchase were supported by the record, and the estimate based on stock variation and misclassification was treated as a factual determination. Penalty under section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 was sustained because it followed the reassessed suppression and no legal defect in the levy was shown.

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Issues: (i) Whether the assessee was entitled to exemption under section 5(3) of the Central Sales Tax Act, 1956 on raw hides and skins purchased locally and exported after dressing, (ii) whether the refixation of suppression at Rs. 4,61,730 was justified, and (iii) whether the penalty levied under section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 was sustainable.

Issue (i): Whether the assessee was entitled to exemption under section 5(3) of the Central Sales Tax Act, 1956 on raw hides and skins purchased locally and exported after dressing.

Analysis: The governing test under section 5(3) is that the goods purchased and the goods exported must be the same goods. The decision applied the principle that if the purchased goods lose their identity and emerge as a different commercial commodity, the purchase does not qualify as a penultimate sale for export. On the authorities considered, raw hides and skins and dressed hides and skins were treated as different commercial commodities for the purpose of the case, and the raw hides and skins purchased by the assessee were not "those goods" exported in the requisite sense.

Conclusion: The exemption claim under section 5(3) was rightly disallowed and the finding was against the assessee.

Issue (ii): Whether the refixation of suppression at Rs. 4,61,730 was justified.

Analysis: The additions were based on excess stock found at inspection, unaccounted finished leather, and an unrecorded last purchase. The Tribunal found that the assessee's explanations were unsupported by records, that the transactions were not reflected in the accounts, and that the probable suppression could be estimated by adding 50 per cent to the actual suppression in view of stock variation and misclassification. The determination was one of factual appreciation supported by the record.

Conclusion: The refixation of suppression was upheld and the finding was against the assessee.

Issue (iii): Whether the penalty levied under section 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 was sustainable.

Analysis: Once the assessment proceeded on suppression and the exemption claim failed, the penalty followed as a consequence of the reassessed turnover and the difference between the tax determined and the tax paid. The quantum was worked out in accordance with the statutory scheme and no legal infirmity was shown in the levy.

Conclusion: The penalty was sustained and the finding was against the assessee.

Final Conclusion: The revision presented no error of law or failure to decide any material question, and the Tribunal's determination on exemption, suppression, and penalty was left undisturbed.

Ratio Decidendi: For section 5(3) of the Central Sales Tax Act, 1956, the purchased goods and exported goods must retain the same commercial identity, and where the purchase and export concern different commercial commodities, exemption is unavailable.

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