M/S. MONGA RICE MILL vs STATE OF HARYANA

The Supreme Court ruled that the State does not have the authority to levy purchase tax on paddy purchased by a miller for the purpose of selling rice to an exporter, as per Section 5(3) and Section 15(ca) of the Central Sales Tax Act, 1956. The Court emphasized that the purchase of paddy by the miller is deemed to occur in the course of export, thus exempting it from local taxation under Article 286 of the Constitution. The High Court's decision to uphold the tax levy was overturned, and the appeals were allowed.