Export sale outside local tax where the transaction is integrated with export and actually occasions shipment.

Export sales fall outside State taxing power under Article 286 where the transfer of property in goods forms part of a single integrated export transaction. Section 8 of the Delhi Sales Tax Act, 1975 was read consistently with Sections 5(1) and 5(3) of the Central Sales Tax Act, 1956, so the decisive inquiry was whether the sale occasioned export and whether the goods were actually exported. The Tribunal was wrong to treat the absence of the assessee's name as consignee in the goods receipt as conclusive. On the surrounding circumstances, the sale was held to be in the course of export and not liable to local sales tax.

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Issues: Whether the transfer of property in the goods and the resulting sale were in the course of export so as to fall outside the taxing power under Article 286 of the Constitution and Section 8 of the Delhi Sales Tax Act, 1975.

Analysis: Article 286 prohibits State taxation on sales or purchases taking place in the course of export. Section 8 of the Delhi Sales Tax Act, 1975 gave effect to that constitutional restriction, while Section 5(1) and Section 5(3) of the Central Sales Tax Act, 1956 supplied the tests for determining when a sale is deemed to be in the course of export. The governing principle is that an export sale must form part of a single integrated transaction with the export, or must occasion the export, and the real nature of the transaction must be gathered from the surrounding circumstances rather than from any single formal feature such as description in the goods receipt. The Tribunal erred in treating the absence of the assessee's name as consignee as decisive. The precedents relied upon show that the decisive inquiry is whether the transaction was integrated with the export and whether the goods were actually exported.

Conclusion: The sale was held to be in the course of export and therefore not liable to local sales tax; the question was answered in favour of the assessee and against the Revenue.

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