The court's decision hinged on the interpretation of section 5(3) of the Central Sales Tax Act, 1956 and its application to the petitioner's purchase turnover, emphasizing that the purchase cannot be deemed to be in the course of export.

G. C. BHARUKA, J. - Heard Sri B. V. Katageri, learned counsel for the petitioner.

2. This writ petition has been filed for quashing the order of assessment dated January 1, 1996, pertaining to the assessment year 1994-95 to the extent the purchase turnover of groundnut seeds at Rs. 15,00,000 had been subjected to purchase tax under the provisions of the Karnataka Sales Tax Act, 1957.

3. According to the learned counsel for the petitioner, through he has a right of appeal under the Act but, it has become futile because of the order of the Tribunal holding against the petitioner in relation to assessment for the previous year, therefore he insists that the issue involved should be decided by this Court straightaway in writ jurisdiction.

4. The petitioner is running a decorticating mill. During the assessment year in question, he had purchased groundnut seeds worth Rs. 15 lakhs from unregistered dealers. Those seeds were subsequently sold to persons who had exported the same to outside India. It is not in dispute that the said exporters had made the purchases from the petitioner for complying with certain agreements/orders for or in relation to the said exports and accordingly they had furnished forms "H" to the petitioner as prescribed under the provisions of rule 12(10) of the Central Sales Tax (Registration and Turnover) Rules, 1957 read with section 5(3) of the Central Sales Tax Act, 1956.

5. The petitioner had claimed exemption in relation to turnover in question in the return filed by it. But since according to the assessing officer, the petitioner was not entitled to the exemption claimed, he by assigning reasons for the same, issued proposition notice to the petitioner inviting his objections to the proposed disallowance. In the assessment order, it has been specifically noticed by the assessing officer that the assessee had opted not to file any objection in this regard, and accordingly the turnover was brought to tax.

6. Learned counsel for the petitioner submits that in view of sub-section (3) of section 5 of the Central Sales Tax Act, and keeping in view the furnishing of form H obtained from the exporters, the assessing officer has erred in levying tax on the transactions in question.

7. Sub-section (3) of section 5 reads as under :

"Notwithstanding anything contained in sub-section (1), the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export, if such last sale or purchase took place after, and was for the purpose of complying with, the agreement or order for or in relation to such export."

8. In the present case admittedly three sales/purchases are involved namely :

(i) Transaction of sale and purchase between unregistered dealers and the petitioner.

(ii) Sale and purchase between the petitioner and the intending exporter; and

(iii) The sale effected by the exporter.

9. A bare reading of sub-section (3) of section 5 of the Central Act makes it clear that under the said provisions only the last sale or purchase preceding the export sale will be deemed to be a sale/purchase in the course of export. Therefore, the purchase made by the petitioner from an unregistered dealer is not covered within the principles formulated in the said provision. As such in my opinion, the assessing officer has rightly levied the purchase tax on the present turnover of the petitioner.

10. Learned counsel for the petitioner has referred to two judgments of the Supreme Court in the case of Consolidated Coffee Ltd. v. Coffee Board [1980] 46 STC 164 and in the case of Commissioner of Sales Tax v. Leather Facts Co. [1987] 66 STC 91. In my opinion, none of the above judgments are of any avail to the petitioner on the facts of the present case.

11. Section 5(1) of the Act had fallen for consideration before the Supreme Court in various cases. In Serajuddin's case [1975] 36 STC 136 (SC) though on facts