Sale in the course of import: integrated liquid ammonia transaction treated as non-taxable local sale.

Import and onward supply of liquid ammonia to the disclosed actual user was treated as a single integrated transaction, not an independent local sale. The contract structure, consortium arrangements and surrounding documents showed that the foreign seller knew the end user and that the assessee acted as an agent or arranging intermediary in a composite purchase, rather than as a separate post-import seller. Because the movement of goods from abroad to India and delivery to the actual user formed one inseparable transaction, the supply was protected as a sale occasioning import under section 5 of the Central Sales Tax Act, 1956. It was therefore not liable to tax as a local sale under the Tamil Nadu General Sales Tax Act, 1959.

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Issues: Whether the import and onward supply of liquid ammonia to the actual user was a sale in the course of import or a local sale exigible to tax under the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The contract, consortium arrangements, and surrounding documents showed that the import was undertaken as a joint purchase for the disclosed actual user and that the foreign seller was aware of the end user. The assessee's role was not that of an independent seller after import, but of an agent or arranging intermediary in a composite transaction. The documents also showed that the movement of goods from the foreign seller to India and the supply to the actual user were part of one integrated transaction, so the alleged later supply could not be severed from the import so as to create a taxable local sale. On these facts, the transaction fell within the protection available to a sale occasioning import under section 5 of the Central Sales Tax Act, 1956.

Conclusion: The transaction was not a taxable local sale; it was in the course of import and was not liable to tax under the Tamil Nadu General Sales Tax Act, 1959.

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