Intra-State sale and prospective tax exemption: chrome ore purchase was taxable, with no export-linked refund or retrospective relief.

A purchase of chrome ore from TISCO was treated as an independent intra-State sale because the contract did not link it to any pre-existing export arrangement, required payment of sales tax, and provided delivery in Orissa; it was therefore not a sale in the course of export and no refund was available on that basis. Section 5(3) of the Central Sales Tax Act, which extends exemption to certain penultimate export sales, applied only from 1 April 1976 and could not be invoked for earlier transactions. The writ petition failed because the purchase remained taxable and the later exemption did not operate retrospectively.

---

---

Issues: (i) whether the petitioner's purchase of chrome ore from TISCO was a sale in the course of export or a penultimate sale exempt from tax and therefore entitled to refund; (ii) whether sub-section (3) of section 5 of the Central Sales Tax Act could be invoked for transactions preceding its insertion.

Issue (i): whether the petitioner's purchase of chrome ore from TISCO was a sale in the course of export or a penultimate sale exempt from tax and therefore entitled to refund.

Analysis: The purchase from TISCO was a distinct transaction from the subsequent export to the foreign buyer. The contract with TISCO contained no reference to any pre-existing export contract, provided for payment of applicable sales tax, and contemplated delivery at TISCO's mines in Orissa. On these facts, the transaction between TISCO and the petitioner was an intra-State sale and not an export transaction. The earlier acceptance of the export sale to the foreign buyer could not be used to convert the prior purchase from TISCO into an exempt export-linked sale for refund purposes.

Conclusion: The purchase from TISCO was not a sale in the course of export and no refund was admissible on that basis.

Issue (ii): whether sub-section (3) of section 5 of the Central Sales Tax Act could be invoked for transactions preceding its insertion.

Analysis: Sub-section (3) of section 5, which extended exemption to certain penultimate sales prior to export, came into force only from 1 April 1976. The refund claim related to transactions of an earlier period. The provision was therefore prospective and not available for those transactions.

Conclusion: Section 5(3) could not be applied retrospectively to the petitioner's transactions.

Final Conclusion: The writ petition failed because the petitioner's purchase from TISCO was taxable and the later statutory exemption for penultimate export sales did not assist transactions of the relevant period.

Ratio Decidendi: A purchase made in an independent intra-State transaction cannot be treated as an export-linked penultimate sale merely because the goods are later exported, and a subsequently inserted exemption provision applies only prospectively unless the statute clearly provides otherwise.

---