The interpretation of S.5(3) of the Central Sales Tax Act and the applicability of exemption claims on purchase turnover in the course of export.

Paripoornan, J.

The petitioner is an assessee under the Kerala General Sales tax Act, We are concerned with the assessment year 1979-80. While making the assessment, the claim for exemption on a turnover of Rs.14,90,948.91 stated to be the purchase turnover in the course of export coming within S.5(3) of the Central Sales tax Act, was negatived. The purchase turnover represented that of pepper and dry ginger sold interstate to exporters who in turn exported the goods outside the territory of India. The Sales tax Appellate Tribunal, by its order dated 6-4-1989, held that S.5(3) of the C.S. T. Act is inapplicable in this case. The sale which occasioned to export is the sale by the Bombay dealer (Exporter) to the foreign buyer. The sale or purchase which preceded such export (the penultimate purchase) which comes within S.5(3) of the C.S.T. Act, is the purchase made by the Bombay Exporter who purchases goods from the revision-petitioner and effects exports. What is taxed in this case is the purchases made by the petitioner in this State. Such purchase is not the preceding purchase occasioning the export but purchase removed by one more step. So, the purchase made by the petitioner within the State is not just the immediate transaction before the export sale. Such a purchase made by the petitioner will not come under S.5(3) of the C.S.T. Act. The Sales tax Appellate Tribunal rightly held so, relying on the decision of the Andhra Pradesh High Court in Bismillah & Co. v. State of Andhra Pradesh (1989)73 STC 135). The said decision has our

concurrence.

2. There is no merit in this Tax Revision Case. It is dismissed. Dated this the 6th day of June, 1990.