TaxTMI 
TaxTMI 
2017 (11) TMI 1160
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....erms of the notification dated 12 February 1999. The case of the assessee was that it had purchased mentha oil directly from individual farmers and utilized the same for manufacture of menthol. It was its case further that menthol so manufactured was thereafter sent to a dealer outside the State for ultimate export out of the country. The assessee asserted that since mentha oil was a raw material used in the manufacture of goods which were ultimately exported, it was entitled to exemption from purchase tax in light of the notification dated 12 February 1999. The authorities below have negatived this claim of the assessee solely on the ground that it was not the ultimate exporter of the goods and unless it were established that the manufact....
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....this notification and words "for export" in it; (iii) if the manufactured goods is not exported out of India, the dealer claiming the benefit of this notification, shall be liable to pay tax, according to the provision of the aforesaid Act, on the purchase of such goods and also interest from the date of purchase of such goods and if such manufactured goods are exported out of India and also sold otherwise or disposed of otherwise or disposed of otherwise than by way of sale then the purchase of such goods liable to tax shall be determined in accordance with the ratio of quantity of exported goods and goods otherwise sold or disposed of otherwise than by way of sale; Provided that no concession under this notification shall be admissibl....
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....ly been exported out of India. In view thereof, the Court finds that the reasoning which weighed with the Department to deny relief to the revisionist on this score cannot be sustained. However, the matter cannot end here. This is for the simple reason that admittedly the assessee was not the ultimate exporter of the goods. In order to succeed, therefore, it would be incumbent upon him to establish that the transactions fall within the ambit of Section 5 (3) of CST Act 1956. This issue as to whether the manufactured goods have moved in the course of export cannot be determined on the basis of the notification dated 12 February 1999 since this would principally have to be answered with reference to the provisions encapsulated in section 5. ....
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....ods" took place for the purposes of complying with the agreement or order for the export of "those goods". (b) an inextricable or inseparable link between the first purchase and the ultimate export of those goods. The emphasis laid on "any goods" and "those goods" relates to the issue of identity of the goods which are imported. The issue which merits consideration is whether the provision contemplates the good firstly purchased and ultimately exported being identical and the same. One may in this connection usefully refer to the decision of the Supreme Court in Sterling Foods Vs State of Karnataka1 where it was observed:- "3. It is clear on a plain reading of sub-section (3) of Section 5 of the Central Sales Tax Act, 1956 that in ord....
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....ate export. A Constitution Bench of the Supreme Court in State of Karnataka Vs. Azad Coach Builders2 explained the position in the following terms:- "26. When we analyse all these decisions in the light of the Statement of Objects and Reasons of the amending Act 103 of 1976 and on the interpretation placed on Section 5(3) of the CST Act, the following principles emerge: - To constitute a sale in the course of export there must be an intention on the part of both the buyer and the seller to export. - There must be obligation to export, and there must be an actual export. - The obligation may arise by reason of statute, contract between the parties, or from mutual understanding or agreement between them, or even from....