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Judgment
Sethuraman, J.—This appeal has been filed against the order of the Board of Revenue dated 21st December, 1976. The assessee is a
dealer in senna leaves, senna pods, etc. For the year 1969-70 he returned total and taxable turnovers of Rs. 14,00,307.92 and Rs. 22,106.28
respectively. In the turnover of Rs. 14,00,307.92 was included a sum of Rs. 11,50,175.99, which related to export sales and Rs. 2,07,625.65
which related to inter-State sales. After allowing a deduction in respect of the said turnover, the Deputy Commercial Tax Officer, Tuticorin-1,
determined the taxable turnover at Rs. 42,506.28, assessable u/s 3(1) of the Tamil Nadu General Sales Tax Act, 1959. He alsa found that the
dealer had exported 50,832 kgs. of senna leaves and pods to foreign countries after 27th November, 1969, and the purchases of senna leaves and
pods were not supported by vouchers. As the purchases had not suffered tax at any earlier stage, he estimated the purchase turnover at Re. 1 per
kilogram and brought the sum of Rs. 50.832 to tax u/s 7-A of the Act. On appeal, the Appellate Assistant Commissioner relied on a decision of
this Court in M. K. Kandaswami v. State of Tamil Nadu [1971] 28 STC 227 and set aside the assessment u/s 7-A. This order of the Appellate
Assistant Commissioner was scrutinized by the Board in suo motu revision after the decision of this Court in M. K. Kandaswami v. State of Tamil
Nadu [1971] 28 STC 227 was reversed by the Supreme Court in State of Tamil Nadu v. M.K. Kandaswami [1975] 36 STC 191. Taking into
account the provisions of Section 7-A, it was held by the Board that the assessee was liable to be taxed u/s 7-A. It is this order of the Board that
is now the subject-matter of the present appeal.
We considered a more or less identical case in P. P. M. Thangiah Nadar v. State of Tamil Nadu (T. C. No. 220 of 1977) [1980] 46 STC 67
and the arguments addressed in that case cover the contentions taken in the present appeal also. Except for the difference in the figures, there is no
difference in the facts. For the reasons stated in our judgment in the said T. C. No. 220 of 1977 (P. P. M. Thangiah Nadar v. State of Tamil Nadu
[1980] 46 STC 67, we hold that the provisions of Section 7-A do not apply to the facts here, because these transactions do not satisfy one of the
two tests or conditions prescribed in Section 7-A. The transactions in the present case, though they are export sales, are ""inside sales"" within the
meaning of the Act. In these circumstances, Section 7-A(1)(b) of the Act was not satisfied and therefore the transactions are riot liable to be
brought within the scope of Section 7-A.
In the result, the appeal is allowed. There will be no order as to costs.