1998 (3) TMI 654

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....mstances under which the purchases can be made liable to tax. 2.. Petitioners are the last stage purchasers in the State of Karnataka and have exported these items. The validity of entry 13a of the Third Schedule to the Act have been assailed on the ground that it is violative of section 5(1) of the Central Sales Tax Act, 1956. Reliance is placed on the decision given in the case of Nipha Exports Pvt. Limited v. State of Haryana [1998] 108 STC 337 (P&H), wherein the machinery and the parts purchased by the assessee and despatched to its head office for export in the execution of orders of foreign buyers were held not liable to tax. In the case of the assessee the purchases have been made from unregistered dealer and by the charging secti....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Tax Act, 1957. 4.. The statement of objects and reasons while enacting section 5(3) of the Central Sales Tax Act for giving relief in respect of penultimate sale was as under: "According to section 5(1) of the Central Sales Tax Act, a sale or purchase of goods can qualify as a sale in the course of export of the goods out of the territory of India only if the sale or purchase has either occasioned such export or is by a transfer of documents of title to the goods after the goods have crossed the customs frontiers of India. The Supreme Court has held (vide: Mohd. Serajuddin v. State of Orissa [1975] 36 STC 136; AIR 1975 SC 1564) that the sale by an Indian exporter from India to the foreign importer alone qualifies as a sale which has o....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....offee Ltd. v. Coffee Board, Bangalore [1980] 46 STC 164 (SC); 1980 Tax LR 1723 (SC), the above statement of objects and reasons was taken into consideration and it was observed thus: "Two things become clear from this statement: first, Mod. Serajuddin's decision [1975] 36 STC 136 (SC), is specifically referred to as necessitating the amendment and secondly, penultimate sales made by small and medium scale manufacturers to an export canalising agency or private export house to enable the latter to export those goods in compliance with existing contracts or orders are regarded as inextricably connected with the export of the goods and hence earmarked for conferral of the benefit of the exemption. But here again, 'existing contract' with wh....