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Report No. 30

58. Gurviah's case.- In State of Madras v. Gurviah Naidu and Co. Ltd., AIR 1956 SC 158, the facts were that a merchant in Salem secured orders for the supply of untanned hides and skins from London purchasers, and then in pursuance of such orders placed with him, he purchased them locally in order to implement those orders and exported them, and the question was whether a tax on those purchases (made locally) was hit by Article 286(1)(b). In holding that it was not, the Supreme Court observed:-

"Such purchases were, it is true, for the purpose of export but such purchases did not themselves occasion the export and consequently did not fall within the exemption of Article 286(1)(b) of the Constitution as held by this Court in 1952 SCR 1112: AIR 1952 SC 366. Nor did such purchases in the State by the exporter for the purpose of export come within the ambit of Article 286(1)(b) as held by the decision of the majority in 1954 SCR 53: AIR 1953 SC 333.".

This was clearly a case of the last purchase before export, which under the 2nd conclusion in the II Travancore case did not come within the ambit of Article 286(1)(b).

Section 5 of the Central Sales Tax Act, 1956 - Taxation by the States of Sales in the Course of Import Back

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