IMPORTANT POINT
The central legal point established in the judgment is the interpretation and application of Section 5(3) of the Central Sales Act to determine the exemption for a sale in the course of export.

JUDGMENT :

1. Heard Sri Bipin Kumar Pandey, learned counsel appearing on behalf of the revisionist and Sri R.R. Agarwal, learned Senior Advocate assisted by Sri Suyash Agarwal, Counsel for the respondent.

2. This is a revision petition filed by the State wherein the following question of law has been admitted :-

"Whether under the facts and circumstances of the case, the Commercial Tax Tribunal was legally justified in granting exemption u/s 5(3) of Central Sales Act treating the transaction as sale in the course of export whereas the sale was for export to Ex. U.P. exporter?"

3. The case of the revisionist is that the finding of the first Appellate Authority was that the dealer in the present case was acting as an agent of the farmers and was auctioning the paddy to the highest bidder. The authority came to the conclusion that since the paddy was being auctioned to the highest bidder, even if the paddy was thereafter exported, the same would not come within the definition of "Sale in The Course of Export" and would be only 'Sale For Export'. The relevant part of the order of the first Appellate Authority is provided below :-

4. Against the above order, the dealer/respondent went in appeal before the Tribunal, wherein the Tribunal took into consideration the judgement of the Allahabad High Court in Babu Kalika Prasad Traders Vs. Commissioner Commercial Tax reported in 2012 N.T.N. Vol-49 page 218, which had considered the Supreme Court judgement in State of Karnataka Vs. Azad Coach Bilders Pvt. Ltd. and Ors. reported in (2010) 9 SCC 524. Upon considering the above judgements, the Tribunal came to the following finding:-

5. Counsel appearing on behalf of revisionist Mr. Bipin Kumar Pandey argued that in the present case no clear finding could be reached with regard to the goods being sold in the course of export, and accordingly, argued that the benefit of Section 5(3) of Central Sales Act, 1956 (hereinafter referred to as the 'Act') would not be applicable, and therefore, exemption would not be available to the dealer. He relied on the order passed by the first Appellate Authority to buttress his arguments.

6. Per contra, Mr. R.R. Agarwal, Senior Advocate appearing on behalf of the dealer/respondent has placed reliance on the case of Azad Coach Builders Pvt. Ltd. (Supra).

7. Upon considering the arguments placed by counsel appearing on behalf of both the parties and upon perusal of the orders passed by the first Appellate Authority and the Tribunal, I am of the view that the first Appellate Authority did not consider certain factual aspects that have later been considered by the Tribunal.

8. The undisputed facts that emerge from the order passed by the Tribunal are that the dealer/respondent had produced certificate of the foreign buyers, purchase orders of the foreign buyers, bills of lading and the Form-H as required under the Act. These documents strengthened the belief of the Tribunal that the sales were made by the dealer/respondent in the course of export.

9. One may also rely on the relevant paragraphs of the judgement passed in Azad Coach Builders Pvt. Ltd. (Supra) that explains the interpretation of Section 5(3) of the Act. Relevant paragraphs are delineated below :-

"23. 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 the nature of the transaction which links the sale to export.

To occasion export there must exist such a bond between the contract of sale and the actual exportation, that each link is inextricably connected wit