Purchase tax exemption for inter-State sales held available where goods were supplied through Form-H for export.

A registered dealer who purchased goods from unregistered dealers and supplied them against Form-H for export was held entitled to exemption from purchase tax under the Rajasthan Sales Tax Act, 1954. Section 5(3) of the Central Sales Tax Act, 1956 was treated as limited to the last sale or purchase preceding the export sale and not the assessee's earlier purchase from unregistered dealers. Because the assessee's sale satisfied the exemption notification covering goods sold in the course of inter-State trade or commerce, purchase tax under Section 5A did not apply.

---

---

Issues: Whether the assessee was liable to purchase tax on purchases made from unregistered dealers, or was entitled to exemption on the ground that the goods were sold in the course of inter-State trade or commerce and were covered by the exemption notification.

Analysis: The assessee purchased goods from unregistered dealers and supplied them against Form-H to an exporter, who in turn effected the export sale. Section 5(3) of the Central Sales Tax Act, 1956 applies to the last sale or purchase preceding the sale occasioning export, and does not extend to the assessee's earlier purchase from unregistered dealers. However, the exemption notification issued under the Rajasthan Sales Tax Act, 1954 exempted purchase of goods by a registered dealer liable to pay tax under Section 5A, where the goods purchased were sold in the course of inter-State trade or commerce. The sale by the assessee satisfied that condition, and the assessee was therefore entitled to exemption from purchase tax.

Conclusion: The assessee was not liable to purchase tax under Section 5A of the Rajasthan Sales Tax Act, 1954, and the revision petition was liable to be dismissed.

---