1990 (9) TMI 319 - HC - VAT and Sales Tax

Summary

Issues:
1. Determination of whether purchases made by the assessee qualify as purchases in the course of export.
2. Evaluation of whether the purchases made fall under the provisions of section 5(3) of the Central Sales Tax Act, 1956.
3. Examination of whether the purchases are exempted under the provisions of the Karnataka Sales Tax Act, 1957.

Analysis:
1. The assessee, a registered dealer in hides and skins, disclosed turnover for assessment years 1979-80 and 1980-81. The sales were classified as local sales, interstate sales, and export sales. Initially, exemption on export sales was granted but was later revised as the sales were deemed not to fall under the Central Sales Tax Act. The Tribunal upheld this decision, leading to the present revision.

2. The assessee purchased hides and skins locally to fulfill an order from an exporter in Tamil Nadu. Documents were presented to prove the sales were for export. The Karnataka Sales Tax Act imposes tax at the last purchase within the state, which is not disputed. The argument was made that the purchases should be considered the last sale preceding export, citing a Supreme Court case. However, the petitioner was not the exporter but a supplier to the exporter, making the purchases taxable under the state Act.

3. The Supreme Court precedent cited by the petitioner was distinguished as the facts in this case differed. The petitioner's role as a supplier, not an exporter, meant the purchases did not qualify as in the course of export under the Act. The assessing authority and the Appellate Tribunal's decision to tax the purchases was deemed correct, leading to the dismissal of the petitions as misconceived.

In conclusion, the High Court dismissed the petitions as the purchases made by the assessee were not considered exempt under the Karnataka Sales Tax Act due to the nature of the transactions and the role of the assessee as a supplier, not an exporter. The judgment reaffirmed the tax liability on the purchases within the state, emphasizing the distinction between purchases for export and purchases subject to state taxation.