Sale in Course of Export turns on direct contract with foreign buyer and no transfer of title to intermediary

A direct sale to a foreign buyer qualifies as a sale in the course of export when the contractual chain, shipping documents and export bill show that export was occasioned by the sale contract and the intermediary did not acquire title to the goods. Payment routed through an intermediary does not by itself change the character of the transaction if there is no separate independent sale to that intermediary. The later insertion of the export-sale provision for intermediary transactions was stated to be inapplicable to the assessment year in question, and the precedent relied on for an export-agency arrangement was distinguished on the facts.

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Issues: Whether the sale of two cotton seed oil expellers by the assessee to the foreign buyer was a sale in the course of export within the meaning of Section 5(1) of the Central Sales Tax Act, 1956, and whether the Tribunal was justified in treating the transaction as an export through the intermediary firm.

Analysis: The record showed a direct contractual chain between the assessee and the foreign buyer, supported by the correspondence, shipping documents, and the export bill. The intermediary firm had only facilitated the transaction and did not receive title to the goods. The movement of goods was occasioned by the contract with the foreign buyer, and payment routed through the intermediary did not alter the character of the sale. The arrangement satisfied the settled test that an export sale exists when the export is inextricably linked to the contract of sale and there is no separate independent sale to an intermediary. The later insertion of Section 5(3) did not govern the assessment year in question, and the Tribunal's reliance on the cited export-agency precedent was misplaced on the different facts.

Conclusion: The sale was held to be a direct export sale in the course of export under Section 5(1) of the Central Sales Tax Act, 1956, and the Tribunal's contrary view was rejected.

Ratio Decidendi: Where goods are shipped directly to the foreign buyer under a subsisting contract with that buyer, and the intermediary neither acquires title nor acts as an export agency, the sale is in the course of export if the export is occasioned by that contract.

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