Apex Law Journal
Apex Law Journal
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Editor

Neha Goel, Advocate

Advisory Board

S.C. Khunger, Advocate

Rohit Bansal, Advocate

Varinder Singh Kanwar, Advocate

Hittan Nehra, Advocate

Judgments on Central Sales Tax Act, 1956

Friday, November 05, 2010
Central Sales Tax Act, 1956

Central Sales Tax Act, 1956 — Section 5(3) — Expression ‘in relation to’ — Held, the expression ‘in relation to’ are words of comprehensiveness, which might both have a direct significance as well as an indirect significance, depending on the context in which it is used and they are not words of restrictive content and ought not be so construed.

 
Central Sales Tax Act, 1956

Central Sales Tax Act, 1956 — Section 5(3) — Words ‘to comply with the agreement or order’ — Meaning of — Held, the words ‘to comply with the agreement or order’ mean all transactions which are inextricably linked with the agreement or order occasioning that export.

 
Central Sales Tax Act, 1956

Central Sales Tax Act, 1956 — Section 5(1) and Section 5(3) — Word ‘occasion’ and Words ‘occasioning the export’ — Meaning of — Held, the word ‘occasion’ is used as a verb and means ‘to cause’ or ‘to be the immediate cause of’ — Therefore, the words ‘occasioning the export’ mean the factors, which were immediate course of export.

 
Central Sales Tax Act, 1956

Central Sales Tax Act, 1956 — Section 5(1) — Phrase ‘sale  in the course of export’ — Held, the phrase ‘sale in the course of export’ comprises in itself three essentials: (i) that there must be a sale: (ii) that goods must actually be exported and (iii) that the sale must be a part and parcel of the export.

 
Central Sales Tax Act, 1956

Central Sales Tax Act, 1956 — Section 5(3) — Statement of Objects and Reasons of the Amending Act 103 of 1976 with effect from 1.4.1976 — When we analyze all the decisions in the light of the Statement of Objects and Reasons of the Amending Act 103 of 1976 and on the interpretation placed on Section 5(3) of the CST Act, the following principles emerge:

 

 -  To constitute a sale in the course of export there must be an intention on the part of both the buyer and the seller to export; 

 

- There must be obligation to export, and there must be an actual export.

 

 -  The obligation may arise by reason of statute, contract between the parties, or from mutual understanding or agreement between them, or even from the    nature of the transaction which links the sale to export.

 

 -  To occasion export there must exist such a bond between the contract of sale and the actual exportation, that each link is inextricably connected with    the one immediately preceding it, without which a transaction sale cannot be called a sale in the course of export of goods out of the territory of    India.

 
Central Sales Tax Act, 1956

Central Sales Tax Act, 1956 — Section 5(3) — Claim under Section 5(3) for exemption from State Sales Tax — Held, if there is an inseverable link between the local sale or purchase on export and if it is clear that the local sale or purchase between the parties is inextricably linked with the export of the goods, then a claim under Section 5(3) for exemption from State Sales Tax is justified, in which case, the same goods theory has no application.

 
Central Sales Tax Act, 1956

Central Sales Tax Act, 1956 — Section 5(3) — Whether an assessee (local manufacturer) is eligible to get exemption under sub-section (3) of Section 5 of the Central Sales Tax Act, 1956, if the penultimate sale effected in favour of the exporter is inextricably connected with the export of goods outside the territory of India? — Held, yes — There is  no error in the decision rendered by the High Court in declaring that the assessee is entitled to exemption under Section 5(3) of the
CST Act.

 
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