Composite import and lease transaction held inextricably linked, qualifying as a sale in the course of import.

A lease and import arrangement was treated as one composite transaction because the purchase order, bank correspondence, lease agreements, bill of lading and customs documents showed that the machinery was imported for the lessee under a pre-existing commercial understanding. The import could not be separated from the later lease documentation, as the two were inextricably linked in the same transaction. Applying the test that a sale is in the course of import only where there is an integral connection between the import and the transaction, the court concluded that the arrangement qualified for exemption from sales tax and the Revenue's revision failed.

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Issues: Whether the lease and import arrangements constituted one integrated transaction in the course of import so as to attract exemption from sales tax.

Analysis: The purchase order placed by the lessee, the correspondence with the bank, the master lease agreement, the supplementary lease agreement, the bill of lading and the customs documents showed that the import was arranged for the lessee and that the subsequent lease documentation only completed the same commercial arrangement. The transaction could not be split into independent contracts, as the import of the machinery was occasioned by the pre-existing understanding and contractual arrangement between the parties. Applying the principle that a sale is in the course of import only when there is an integral connection or inextricable link between the import and the transaction, the Court held that the import and lease were part of one composite transaction.

Conclusion: The transaction was in the course of import and the Revenue's revision failed.

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