Export-linked manufacturing purchases not taxable under Section 3(4) where raw materials were used for goods sent outside the State.

Turnover of raw materials purchased on concessional terms against Form XVII declarations and used in manufacturing goods exported outside the State was not taxable under Section 3(4) of the Tamil Nadu General Sales Tax Act, 1959. The earlier decision applied the first part of Section 3(4) to export sales and held that purchase turnover of raw materials used for export-linked manufacture did not attract tax under that provision. On similar facts, the court saw no reason to depart from that principle, so the assessment on the purchase turnover was unsustainable and the State's revision failed.

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Issues: Whether turnover of raw materials purchased against Form XVII declarations and used in manufacture of goods exported outside the State could be brought to tax under Section 3(4) of the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The challenge was covered by the earlier decision following which export was treated as a sale within the first part of Section 3(4), and purchase turnover of raw materials obtained on concessional terms under Section 3(3) for manufacture of exported goods was held not liable to tax under Section 3(4). As the present case arose on similar facts and involved the same legal issue, no different view was warranted.

Conclusion: The assessment on the purchase turnover for export-linked manufacture was not sustainable under Section 3(4), and the revision by the State failed.

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