Sale in the course of import applies where the buyer holds the licence and goods are imported only for that buyer.

Where the purchaser held the import licence, authorised the seller only as its agent, and the goods were imported for delivery to that purchaser alone, the transaction was treated as a sale in the course of import under section 5(2) of the Central Sales Tax Act and therefore not liable to sales tax. The seller's retention of title until payment was treated as a security arrangement that did not alter the import-linked character of the sale. On the same factual basis, the assessee was also entitled to exclude transport and handling charges and educational allowance, with corresponding relief from additional sales tax and surcharge.

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Issues: Whether the disputed turnover represented sales in the course of import and was exempt from sales tax under section 5(2); and whether the assessee was entitled to exclusion of transport and handling charges and educational allowance, with corresponding relief from additional sales tax and surcharge.

Analysis: The contract, import licence and letter of authority showed that the purchaser obtained the licence, authorised the assessee to act only as its agent for import, and prohibited diversion of the goods to anyone else. The goods were ordered against a specific contract, shipped on the basis of the purchaser's import permission, and were intended from the outset for delivery and installation in the purchaser's campus. The stipulation that title would remain with the seller until payment was treated as a security clause and not as a factor changing the character of the transaction. The cited precedents relied on by the department were distinguished because, unlike those cases, the present transaction involved a licensed purchaser with express authority and a restricted import arrangement. On the same finding, the claimed exclusion of transport and handling charges and educational allowance, and the consequential levy of additional sales tax and surcharge, also fell to be decided in the assessee's favour.

Conclusion: The disputed turnover was held to be sales in the course of import and therefore not liable to sales tax; the assessee was also entitled to the related exclusions and consequential relief.

Ratio Decidendi: Where the purchaser holds the import licence, authorises the seller only as an agent, and the goods are imported for delivery to that purchaser alone, the sale is a sale in the course of import under section 5(2) of the Central Sales Tax Act.

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