To qualify for export tax exemption under Section 5(3) of the Central Sales Tax Act, 1956, an assessee must substantiate the claim by proving the existence of a pre-existing contract between the exporter and the foreign buyer and demonstrating a direct nexus between the local sale and that export obligation.

THIS STRP IS FILED UNDER SECTION 65(1) OF THE Karnataka Value Added Tax Act, 2003 AGAINST THE JUDGMENT DATED 13.11.2024 PASSED IN STA.No.672 AND 673/2016 ON THE FILE OF KARNATAKA APPELLATE TRIBUNAL AT BANGALORE, PARTLY ALLOWING THE APPEALS AND SET ASIDE THE ORDER DATED 20.06.2016 PASSED IN KVAT/AP/395/2014-15 ON THE FILE OF JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS) MANGALURU, DISMISSING THE APPEAL AND FILED AGAINST THE RE-ASSESSMENT ORDER PASSED BY DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT-1), MANGALURU FOR THE PERIODS 2007-08.

THIS PETITION, COMING ON FOR ADMISSION THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE S.G.PANDIT

and

HON'BLE MR. JUSTICE K. V. ARAVIND

ORAL ORDER

(PER: HON'BLE MR. JUSTICE K. V. ARAVIND)

Heard Sri K.M. Shivayogiswamy, learned counsel for the petitioner and Sri Aditya Vikram Bhat, learned Additional Government Advocate for the respondents.

2. This Sales Tax Revision Petition is filed by the assessee, assailing the order dated 13.11.2024 passed in STA No.672 & 673/2016 by the Karnataka Appellate Tribunal, Bengaluru (for short, “the Tribunal”).

3. The petitioner is a partnership firm registered under the Karnataka Value Added Tax Act, 2003 (for short, “KVAT Act”), engaged in the business of trading in iron ore fines. Upon verification of the books of account, the adjudicating authority noticed discrepancies in the claim of deemed exports and accordingly computed the tax liability, along with interest and penalty. The appeal preferred by the dealer before the First Appellate Authority came to be rejected. The further appeal before the Tribunal also resulted in dismissal under the impugned order.

4. Sri Shivayogiswamy, learned counsel for the petitioner, submits that the petitioner has fulfilled the conditions stipulated under Section 5(4) of the Central Sales Tax Act, 1956 (for short, “CST Act”), in support of the exemption claimed. It is contended that the agreement dated 01.01.2008 entered into between the petitioner and the exporter, along with supporting documents such as sale bills, bill of lading, export invoice, export agreement, and Form H issued by the exporter, were duly produced.

4.1 It is further submitted that the purchase agreement establishes the requisite link/nexus between the goods and the export transaction. Learned counsel also contends that non-production of the agreement entered into between the Indian exporter and the foreign buyer would not, by itself, disentitle the petitioner from claiming exemption under Section 5(3) of the CST Act. Learned counsel further submits that the findings recorded by all the authorities, including the Tribunal, are without application of mind and without due consideration of the conditions stipulated under Section 5(4) of the CST Act.

5. Sri Aditya Vikram Bhat, learned Additional Government Advocate appearing for the respondents, while supporting the impugned order, submits that there is no material to establish that the supply was effected pursuant to a pre-existing export order. It is contended that, to claim the benefit under Section 5 of the CST Act, there must exist a prior export order, and the purchases by the exporter must be in furtherance of such export obligation. In the absence of any such export agreement or order, it is submitted that all the authorities were justified in holding that the petitioner is not entitled to the benefit under Section 5 of the CST Act.

6. Having considered the submissions made by learned counsel for the parties, we are not inclined to entertain this revision petition for the reasons below.

7. Section 5 of