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Report No. 30

113. Notions of integrality inextricable bond and non-divertibility emphasised.-

Therefore, the Supreme Court has interpreted the expression "in the course of" in terms of an integrated activity and the sale occasioning the movement or import or export as the case may be, or being a consequence of a covenant or incident of the contract incapable of being diverted to any other contract or party. The language used may have varied, but the words used all point to the same notion of integrality of the sale and movement of goods and inextricability of the bond between the sale and the movement.

114. Further, between the sale and the export or import, there was to be an integral relation or bond, so that the sale would not be complete without these operations. To put it differently, sales form part and parcel of a single transaction with the export or import, as the case may be, or they are so related to each other, one belonging to the other. If the transaction is such that the seller cannot divert the goods to another contract or to any other party, that would be a relevant factor indicative of the sale being in the course of import.

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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