1. The appellants deal in cotton and castor oil. They are registered dealers under Section 11 of the Sales Tax Act, and they have also received the necessary authorisation under Section 12-A. On the 29th of September 1956, a notice of demand was served upon them calling upon them to pay a sum of Rs. 25,448-9-9, the notice dealt with the period from 1-4-1954 to 31-3-1955. As the notice indicated, the assessees were liable to pay sales tax and purchase tax in respect of certain quantities of castor oil and cotton sold by the appellants to the firm of Godimetla China Appalaruju. The matter came up before Mr. Justice K. T. Desai, and he took the view that the demand made was justified and dismissed the petition of the appellants, which had been filed to challenge this notice of demand.

2. The question briefly is this. The sale with which we are concerned and which is sought to be taxed under the Sales Tax Act is a sale effected by the appellants with the firm of Godimetla China Appalaraju (hereinafter referred to as the exporters) under certain contracts, a specimen of which has been annexed to the petition. The contention of the appellants is that the sale is exempted by the