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TMI Blog2009 (2) TMI 757X X X X Extracts X X X X X X X X Extracts X X X X ..... preceding the purchase occasioning export of such goods to the foreign buyers outside the territory of India. It is a purchase removed by one more step. Thus the purchase of groundnut effected by the petitioner from cultivators is not exempted not being the penultimate purchase within the provisions contained in section 5(3) of the CST Act. Decided in favour of the Revenue and against the petitioner-dealer. - S.T. Rev. No. 64 of 2008 - - - Dated:- 5-2-2009 - CHAUHAN B.S. DR. C.J. AND MAHAPATRA B.N. , JJ. B.N. MAHAPATRA J. The Orissa Sales Tax Tribunal (hereinafter referred to as, the Tribunal ) has referred the following question of law to this court for its opinion under section 24(1) of the Orissa Sales Tax Act, 1947 (herein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled to such exemption. Relying on the decision of the Andhra Pradesh High Court in Bismillah Co. v. State of Andhra Pradesh [1989] 73 STC 135, he held that purchase of groundnut by the petitioner from the cultivators is not the last purchase of goods preceding the purchase occasioning export of such goods, but a purchase removed by one more step. Hence, the petitioner is not entitled to avail exemption of payment of purchase tax on purchase turnover of Rs. 10,27,948.45. Being aggrieved by the said order, second appeal was carried to the Tribunal, whereupon the learned Tribunal upheld the view expressed by the first appellate authority observing that the transaction of purchase made by the Indian Export Houses are penultimate purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase occasioning export of those goods to foreign buyers. During the relevant time groundnut was liable to tax on purchase turnover and the liability to pay tax arose at the time the purchase of groundnut was effected by the petitioner. Since the purchases of groundnut effected by the petitioner were not covered under sub-section (3) of section 5 of the CST Act, the petitioner is liable to pay tax on purchase turnover of groundnut. At this juncture, it is necessary to refer to the provisions contained in section 5(3) of the CST Act. Section 5(3) runs as follows: ... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principle of general applicability in regard to all penultimate sales provided they satisfy the specified conditions mentioned therein and it does not at all create a legal fiction. This section has been enacted to extend the exemption from tax liability under the Act not to any kind of penultimate sale but only to such penultimate sale, which satisfies the two conditions specified therein, namely, (i) such penultimate sale must take place after the agreement or order, under which the goods are to be exported, and (ii) it must be for the purpose of complying with such agreement or order. The honourable Andhra Pradesh High Court in Bismillah Co. v. State of Andhra Pradesh [1989] 73 STC 135 while dealing with section 5(3) of the CST Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is seen that the foreign buyers have entered into agreement with Indian Export Houses for purchase of groundnut seeds. The Indian Export Houses in turn purchased these goods from the dealer-assessee. Thus, the transaction of purchases made by the Indian Export Houses are penultimate purchases. This leaves the purchases made by the dealer-assessee are exigible to tax in view of the provisions of sub-section (3) of section 5 of the CST Act. The purchases made by the dealer-assessee cannot be deemed to be purchases in course of export. Hence, the claim put forth on behalf of the dealer-assessee is not sustained ... In the present case, the petitioner has purchased goods from the cultivators. The Indian exporters, namely, M/s. Peanu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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