THE DEPUTY COMMISSIONER OF AGRICULTURAL INCOME TAX & SALES vs INDIAN EXPLOSIVES LTD.

The Supreme Court held that sales made by the respondent-assessee, who imported goods on behalf of customers using Actual Users’ Import Licences, are exempt from sales tax under Article 286(1)(b) of the Constitution of India. The Court established that for a sale to be considered in the course of import, there must be an integral connection between the sale and the import, which was satisfied in this case. The Court dismissed the Revenue's appeals, affirming the Appellate Tribunal's decision that the turnover was not taxable.