Export exemption evidence and penalty limits: Form H can suffice for section 5(3), and penalty cannot be restored without Revenue challenge.

For exemption under section 5(3) of the Central Sales Tax Act, the penultimate seller is not required to independently produce the foreign buyer's agreement copy, sale contract or purchase order when Form H and connected export documents establish the export nexus; the authorities may verify the link from the materials already on record. On penalty under rule 12(3)(g) of the Central Sales Tax (Odisha) Rules, bona fide non-production of declaration forms was treated as not warranting penalty in the first appellate order, and in the absence of any Revenue appeal or cross-objection the Tribunal could not restore or enhance the penalty. The discussion reflects relief on both exemption and penalty issues.

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Issues: (i) Whether, for claiming exemption under section 5(3) read with section 5(4) of the Central Sales Tax Act, 1956, the penultimate seller is required to produce the agreement copies or sale contract or purchase order of the foreign buyer with the Indian exporter, notwithstanding production of Form H and supporting export documents; (ii) Whether penalty under rule 12(3)(g) of the Central Sales Tax (Odisha) Rules, 1957 could be sustained or revived in the absence of any appeal or cross-objection by the Revenue, where the first appellate authority had deleted the penalty on bona fide non-production of declaration forms.

Issue (i): Whether, for claiming exemption under section 5(3) read with section 5(4) of the Central Sales Tax Act, 1956, the penultimate seller is required to produce the agreement copies or sale contract or purchase order of the foreign buyer with the Indian exporter, notwithstanding production of Form H and supporting export documents;

Analysis: Section 5(3) extends export treatment to the last sale preceding export if it is made after, and for the purpose of complying with, the agreement or order for or in relation to such export, while section 5(4) requires the prescribed declaration in the prescribed form. Rule 12(10) of the Central Sales Tax (Registration and Turnover) Rules, 1957 requires furnishing of Form H by the exporter, and the form itself contemplates details such as purchase order, bill of lading and the export link. The statutory scheme does not require the penultimate seller to produce the foreign buyer's agreement copies or sale contract with the Indian exporter. Once Form H and connected export documents are produced and there is no defect in them, the burden can be discharged by the selling dealer; the authorities may verify the export nexus from the materials already on record.

Conclusion: The requirement to produce the foreign buyer's agreement copies or sale contract was not mandatory, and the exemption claim under section 5(3) could not be denied on that ground. The issue is answered in favour of the assessee.

Issue (ii): Whether penalty under rule 12(3)(g) of the Central Sales Tax (Odisha) Rules, 1957 could be sustained or revived in the absence of any appeal or cross-objection by the Revenue, where the first appellate authority had deleted the penalty on bona fide non-production of declaration forms;

Analysis: Rule 12(3)(g) provides for penalty in audit assessment cases, but the departmental circular dated 20.04.2015 treated bona fide non-submission of declaration forms as not warranting penalty in the stated circumstances. The first appellate authority had already deleted the penalty. In the absence of any appeal or cross-objection by the Revenue, the Tribunal could not travel beyond the dispute raised by the assessee and grant a further adverse order in favour of the State on the penalty issue.

Conclusion: The Tribunal was not justified in remanding the penalty issue or disturbing the relief already granted by the first appellate authority. The issue is answered in favour of the assessee.

Final Conclusion: The revision succeeded, the impugned Tribunal order and the corresponding orders were set aside to the extent challenged, and the assessee obtained relief on both the exemption and penalty questions.

Ratio Decidendi: For exemption under section 5(3), a penultimate seller need not independently produce the foreign buyer's agreement when Form H and connected export documents establish the export nexus; and in the absence of a Revenue challenge, an appellate forum cannot restore or enhance a penalty relief already granted to the assessee.

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