BINANI BROS. (P). LTD. vs UNION OF INDIA & ORS.

The Supreme Court ruled that the sale or purchase of goods in the course of imports into India is exempt from sales tax under Article 286 of the Constitution and Section 5(2) of the Central Sales Tax Act, 1956. The Court held that the transactions between the petitioner company and the Directorate General of Supplies and Disposals (D.G.S. & D.) were exempt from sales tax as they constituted sales in the course of import. Consequently, the order to deduct sales tax from the petitioner's pending bills was deemed unlawful, affirming the petitioner's rights under Article 31(1).