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2012 (1) TMI 37 - HC - VAT and Sales TaxExemption u/s 5(2) of the Central Sales Tax Act, 1956 - Sale in the course of import – assessee entered into contract with Canara Bank, Bangalore for sale of Bank Note Processing System BPS-204 – another contract with German manufacturer for import of same – assessee claiming it to be sale in the course of import - Held that:- To claim exemptionu/s 5(2), import should have a direct nexus and should be connected with the transaction of sale in India. In present case, the import was by the appellant in his own name. The appellant had entered into an earlier contract with Canara Bank but for the purpose of said contract the appellant was not the agent of the supplier in Germany. Contract with Canara Bank and contract with the German company, both were on principal to principal basis. They were two independent transactions. Back to back contracts by themselves do not establish and prove that the first part of Section 5(2) is attracted and applicable. The import may have been with the intention to supply the imported goods to the Canara Bank but could have been diverted to another third person, without violation/default of the contract between the appellant and the Canara Bank. Thus, it does not qualifies for exemption under Section 5(2). - Decided against the assessee.
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