Export-linked local sales qualify as deemed export when inseverably connected with the export order under section 5(3).

Section 5(3) of the Central Sales Tax Act, 1956 deems the last sale or purchase preceding export to be in the course of export where it is made after, and to comply with, an export order or agreement. The governing test is whether the local sale is inseverably and inextricably linked with the export transaction so that it forms part of the export sale. On the stated facts, sales of aerosol valves and non-aerosol pumps to export-oriented purchasers satisfied that test because the goods were used in relation to export, the export of the finished containers was undisputed, and similar earlier assessments had been accepted. The exemption claim was therefore justified.

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Issues: Whether the assessee's sales of aerosol valves and non-aerosol pumps to export-oriented purchasers qualified for exemption as sales occasioning export under section 5(3) of the Central Sales Tax Act, 1956.

Analysis: Section 5(3) deems the last sale or purchase of goods preceding the export sale to be in the course of export if it takes place after, and for the purpose of complying with, the export order or agreement. The governing test is whether there is an inseverable and inextricable link between the local sale and the export, so that the local supply forms part and parcel of the export transaction. On the facts, the goods supplied by the assessee were shown to be used in relation to export, the export of the finished containers was not disputed, and the claim for earlier assessment years had already been accepted without challenge by the Revenue.

Conclusion: The assessee's sales were covered by section 5(3) and the claim for exemption was justified.

Ratio Decidendi: Where the local sale is inextricably linked with the export order and is made to comply with that order, the sale is deemed to be in the course of export and qualifies for exemption under section 5(3) of the Central Sales Tax Act, 1956.

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