ZIP INDUSTRIES LTD Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) Heard Mr.S.N.Kirubanandam, learned counsel appearing for Mr.K.Kannaih Naidu, learned counsel for the petitioner and Mr.K.Venkatesh, learned Government Advocate appearing for the respondent.

(2.) The petitioner has filed this writ petition challenging an assessment order dated 30.04.2009 under the provisions of the Central Sales Tax Act, 1956 for the assessment year 2005-2006.

(3.) The only legal issue involved in this writ petition is whether the petitioner is entitled to claim exemption on the sale of zip fasteners to a readymade garment manufacturer, who has exported the readymade garments outside the territory of India. The respondent rejected the petitioner's claim for exemption on the ground that the petitioner had sold only zip fasteners and what was exported readymade garments through the documents are not proper and the petitioner is not entitled to claim exemption. The legal issue is no longer res integra and has been settled by the Constitution Bench of the Hon'ble Supreme Court in the case of State of Karnataka V. Azad Coach Builders Pvt. Ltd., and another, 2010 36 VST 1 . The respondent/ assessee in the said case was a manufacturer and seller of bus bodies in the State of Karnataka. One M/s.T was an exporter and manufactured chassis of motor vehicles. On receipt of orders from foreign buyers for buses, the exporter in turn placed orders on the respondent/assessee for bus bodies to be fitted on the chassis supplied by it. The buses were then exported by the exporter. The claim of the respondent/ assessee that its sales were penultimate sales in the course of export was rejected by the Assessing Officer on the ground that the "bus bodies" and "buses" were two different commodities and the bus bodies as such were not exported, but complete buses. The High Court held that the supply of bus bodies by the respondent to the exporter was in the course of export and the words "in relation to such export" extended the scope of the exemption to the extent that even if there was no agreement or order but the sale was in relation to such exports, the exemption could still be claimed under Section 5(3) of the Central Sales Tax Act. The Revenue preferred appeal to the Hon'ble Supreme Court wherein, it was held as follows: