Judgment

VENKATARAMIAH, J.:- The appellant in these three appeals by special leave is a company engaged in the business of manufacture and sale of art silk yarn. It has its factory at Sirumughai in the District of Coimbatore in the State of Tamil Nadu. The appellant is registered as a dealer carrying on business at Coimbatore. In the course of its business, it sold during the relevant period large quantities of art silk yarn to various purchasers some of whom were weavers residing in the States of Maharashtra and Gujarat who had been issued cards under a scheme called Export Promotion Scheme entitling them to buy specified quantities of art silk yarn from specified manufacturers. The question involved in these appeals relates to the eligibility of the sales effected in favour of Export Promotion Scheme card holders belonging to the States of Maharashtra and Gujarat to tax under the Central Sales Tax Act, 1956 (hereinafter referred to as the Act).

2. The assessment years are 1962-63, 1963-64 and 1964-65.

3. The details of the Export Promotion Scheme for distribution of art silk yarn referred to above were these: There were certain weavers in India who were entitled to an incentive in t