Export sale classification under sales tax law defeats levy on goods manufactured from Form XVII purchases.

Goods manufactured from purchases made against Form XVII declarations were later sold in export, and the court held that levy under the Tamil Nadu General Sales Tax Act could not be sustained on that basis. Applying the binding view that export sale falls within the statutory definition of sale read with the relevant Explanation, the court followed Tube Investment of India Ltd. and rejected the attempt to sustain tax under Section 3(4) merely because the manufactured goods were ultimately exported. The revision was therefore unsuccessful, and the levy on the export sale was set aside.

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Issues: Whether tax under Section 3(4) of the Tamil Nadu General Sales Tax Act, 1959 could be levied on goods manufactured out of purchases against Form XVII declarations when the manufactured goods were sold in export.

Analysis: The Tribunal followed the binding view that export sale is covered by the definition of sale under Section 2(n) read with Explanation 3(a) of the Tamil Nadu General Sales Tax Act, 1959. On that basis, the levy contemplated under Section 3(4) could not be sustained merely because the goods were ultimately sold outside the State in export. The Court applied the earlier decision in Tube Investment of India Ltd. and held that the questions raised did not warrant a different view.

Conclusion: The levy under Section 3(4) on the export sale was not sustainable and the revision failed.

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