COMMISSIONER OF SALES TAX vs LEATHER FACTS CO.

The Supreme Court ruled that transactions of sale/purchase in the course of export are not subject to tax under Section 5(3) of the Central Sales Tax Act, 1956, due to the constitutional bar under Article 286(1)(a). The Court held that the use of Form III-A under the U.P. Sales Tax Act does not empower the State to levy tax on such transactions, as they cannot be taxed regardless of the form used. The Court affirmed the Sales Tax Tribunal's decision that the respondent was not liable for purchase tax under Section 3-AAAA of the U.P. Sales Tax Act for exports made in compliance with the law.