Section 3(4) additional tax does not apply to export sales of goods made with concessional purchase tax benefits.

Section 3(4) of the Tamil Nadu General Sales Tax Act, 1959 applies where a dealer, after obtaining concessional purchase tax treatment, does not sell the manufactured goods but dispatches them outside the State by branch transfer, transfer to an agent, or a similar mode. Export sales do not amount to such a transfer outside the State for the purpose of this provision. On that interpretation, additional tax under section 3(4) is not attracted to export sales, and the levy cannot be sustained.

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Issues: Whether the additional tax under section 3(4) of the Tamil Nadu General Sales Tax Act, 1959 is attracted to goods manufactured with concessional purchase tax benefits when the finished goods are sold by way of export.

Analysis: The provision applies where, after availing the concessional rate under section 3(3), the dealer does not sell the manufactured goods but dispatches them outside the State by branch transfer, transfer to an agent, or otherwise, attracting additional tax on the value of the goods. Export sales do not involve such a transfer outside the State for the purposes contemplated by section 3(4). The interpretation adopted by the Tribunal was found unsustainable, and the earlier view that section 3(4) has no application to export sales was followed.

Conclusion: Section 3(4) is not attracted to the petitioner's export sales, and the levy of additional tax cannot be sustained.

Final Conclusion: The revision succeeded, the tax levy was set aside, and the assessee obtained relief on the core question of applicability of section 3(4) to export sales.

Ratio Decidendi: Additional tax under section 3(4) of the Tamil Nadu General Sales Tax Act, 1959 applies only where the goods are dispatched outside the State in the manner contemplated by the provision and does not extend to export sales.

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