DEPUTY COMMISSIONER OF SALES TAX LAW BOARD OF REVENUE TAXES ERNAKULAM Vs. NEROTH OIL MILLS COMPANY LTD

JUDGEMENT

(1.) THIS is a revision by the Deputy Commissioner of Sales Tax (Law) against the order of the Kerala Sales Tax Appellate Tribunal, Trivandrum, holding that the exemption claimed by the assessee in regard to the turnover of prawns purchased for the purpose of sale occasioning export of such prawns out of India has to be allowed. Section 5 (1) of the Central Sales Tax Act specifies that a sale or purchase of goods shall be deemed to take place in the course of the export of the goods out of the territory of India only if the sale or purchase either occasions such export or is effected by a transfer of documents of title to the goods after the goods have crossed the customs frontiers of India. Sub-section (3) of the section provides that 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.

(2.) PRAWNS are purchased by the assessee locally. They are cleaned, peeled proceeded and packed as prawns for sale by export outside India. No doubt the purchases by the assessee are not purchases which occasion the export of the goods but they are purchases preceding the sale occasioning the export of the goods and if so section 5 (3) will apply to render the sales as in the course of export and outside the scope of taxation by the State law.