Judgment :- R. JAYASIMHA BABU, J. The assessee sold chillies ex-his godown in Ariyalur in the State of Tamil Nadu to his buyers who were at Bombay and who had entered into a contract with the assessee for the purpose of fulfilling a contract for exporting the same to Odessa (USSR) from the Cochin Port. Gunny bags were delivered by the buyer to the assessee for packing the chillies. The container also was supplied by the buyer. Goods were moved in that container from Ariyalur to the port at Cochin and thereafter exported. 2. The chillies sold by the assessee to the buyer had been purchased from unregistered dealers and had not suffered tax. The assessing authority therefore invoked section 7-A of the Tamil Nadu General Sales Tax Act, 1959, hereinafter referred to as "the TNGST Act", and sought to levy purchase tax on the ground that though an export sale had taken place by reason of section 5(3) of the Central Sales Tax Act, 1956 3. Mr. C. Natarajan, Senior Counsel, appearing for the assessee contended that the Tribunal and the Revenue authorities were in error taking the view that the sales in the course of export are incapable of being regarded as inter-State sales even when goods are despatched to destination outside the State prior to the actual exportation. Counsel submitted that though there are only three classes of sales, local, inter-State and export, the same sale under certain circumstances, is capable of being regarded as more than one kind of sale. Counsel in this context referred to the decision of the apex Court in the case of Onkarlal Nandlal v. State of Rajasthan reported in, a decision rendered by a three-Judge Bench of the apex Court, wherein the Court observed, with regard to the provisions of the Rajasthan Sales Tax Act, that, "..............There is, in our opinion, no antithesis between a sale in the course of inter-State trade or commerce and a sale inside the State. Even an inter-State sale must have a situs and the situs may be in one State or another. It does not involve any contradiction in saying that an inter-State sale or purchase is inside a State or outside it. Even an inter-State sale must have a situs and the situs may be in one State or another. It does not involve any contradiction in saying that an inter-State sale or purchase is inside a State or outside it. The situs of a sale may fall for consideration from more than (one) point of view..........If therefore a question arises whether a sale is exigible to tax by the State Legislature, it may have to be considered whether it is a sale in the course of inter-State trade or commerce. The same sale in another context may have to be examined from a different point of view for determining where its situs lies and whether it is a sale inside the State or outside the State. There is therefore no incompatibility in the same sale being both a sale in the course of inter-State trade or commerce within the meaning of section 3 of the Central Act as also a sale inside the State in accordance with the principles laid down in sub-section (2) of section 4 of the Central Act. 4. The statement of law in the case of Onkarlal Nandlal v. State of Rajasthan was referred to with approval by the Constitution Bench in the case of Gannon Dunkerley and Co. v. State of Rajasthan reported in. 5. Reliance was placed by counsel also on the decision of the apex Court in the case of Murli Manohar and Co, v. State of Haryana reported in, also a decision rendered by a three learned Judges of the apex Court. The case arose in the context of a claim for purchase tax under the provisions of the Haryana General Sales Tax Act, 1973. The court, after referring to the submissions of counsel that a sale must necessarily fall within one of the three categories namely local sales or inter-State sales or export sales, observed that : "........We are unable to conceive of a fourth category of sale, which could be neither a local sale nor an inter-State sale nor an export sale. Shri Gupta, on behalf of the State, contended that the goods might have been directly moved by the assessee to a port for shipment abroad in pursuance of an export contract entered into by the dealer who purchased from the assessee. Shri Gupta, on behalf of the State, contended that the goods might have been directly moved by the assessee to a port for shipment abroad in pursuance of an export contract entered into by the dealer who purchased from the assessee. Even in such a case if the transport of goods from the assesses place of business to the port is in pursuance of the terms of the sale, the movement of the goods would be occasioned by the sale made by the assessee and would be an inter-State sale. If, on the other hand, the goods were sent to the port by the assessee subsequent to hand independent of the sale made by him, then, for the purpose of that transport, the assessee would only be an agent of the purchaser and the movement of the goods in pursuance of the contract of sale entered into by the purchaser and would be one in the course of export within the meaning of section 5(1) of the Central Sales Tax Act, 1956......." 6. Counsel also fairly brought to our notice the decision of the apex Court in the case of State of Karnataka v. B.M. Ashraf and Co. reported in which the decision in the case of Murli Manohar and Co. was referred to and distinguished. The Court in that case observed that in the case of Murli Manohar and Co. the Court having come to the conclusion that the sale was not in the course of export within the meaning of section 5(1) of the Central Sales Tax Act, 1956 and it was also not a local sale, it was concluded that the sale in question was inter-State sale and, therefore, would fall within the exemption contained in section 9(1) of the Haryana General Sales Tax Act, 1973. It was found by the Court that the facts before it were different. In the case of B.M. Ashraf and Co. the goods had not been taken out of the State but were exported from a port in Karnataka, the question having arisen in the context of claim for purchase tax made under the provisions of the Karnataka Sales Tax Act. 7. The Court held in the case of B.M. Ashraf and Co. In the case of B.M. Ashraf and Co. the goods had not been taken out of the State but were exported from a port in Karnataka, the question having arisen in the context of claim for purchase tax made under the provisions of the Karnataka Sales Tax Act. 7. The Court held in the case of B.M. Ashraf and Co. [1 9971 (107) STC 571 (SC) that, "...............There was thus no occasion of movement of goods from one State to another and as the sale in the course of export is not entitled to the exemption from payment of purchase tax under section 6 of Karnataka Sales Tax Act, the decision of the High Court [B.M. Ashraf and Co. v. State of Karnataka regarding the sales in question as being sales in the State and, therefore, immune from levy of purchase tax, cannot be sustained. " 8. Learned counsel also drew our attention to section 3 of the CST Act, which sets out the circumstances in which a sale or purchase of goods can be said to take place in the course of inter-State trade or commerce. That section, inter alia, provides that a sale or purchase of goods shall be deemed to take place in the sale or purchase occasions movement of goods from one State to another. Attention was drawn to section 5(3) and the provisions of section 6(1) of the CST Act both of which were introduced into the Act by Act 103 of 1976 with effect from April 1, 1976. Section 5(3) deems the penultimate sale preceding the actual export sale also to be a sale in the course of export. The proviso to section 6(1) is to the effect that the dealer shall not be liable to pay tax under the CST Act on any sale of goods which in accordance with the provisions of subsection (3) of section 5 is a sale in the course of export of those goods out of the territory of India. 9. The proviso to section 6(1) is to the effect that the dealer shall not be liable to pay tax under the CST Act on any sale of goods which in accordance with the provisions of subsection (3) of section 5 is a sale in the course of export of those goods out of the territory of India. 9. The counsel submitted that the very introduction of the proviso in section 6 would show that but for the proviso, the penultimate sale when it was a sale which had occasioned to the movement of goods to a place outside the State, even if such movement was ultimately to terminate outside the country by reason of becoming part of a further export sale, would still be a sale in the course of inter-State trade or commerce. 10. Though the question raised by counsel is indeed an interesting one, nevertheless, on the facts of the case before us, it is not necessary for us to deal with the question as to whether a penultimate sale falling under section 5(3) of the CST Act can also be regarded as an inter-State sale and consequently the penultimate sale would be out of the purview of section 7-A(l)(c) of the State Act. 11. It is clear from the statement of facts found in the affidavit accompanying the petitioner before us, as also from the facts which the assessee had disclosed to the assessing authorities, that the contract between the assessee and its purchaser was for the sale of chillies ex-assessee's godown at Ariyalur within the State. As between the assessee and its buyer the sale was completed at Ariyalur, the subsequent movement of the goods from Ariyalur to the port at Cochin cannot be regarded, in the circumstances, as having been occasioned by this sale. The fact that this local sale was also the penultimate sale- under section 5(3) of the CST Act would not, on that score, render the movement of the goods from within the State to a port outside the State, a part of the sale as between the assessee and its exporter/buyer. The goods were moved obviously at the instance of and on behalf of the buyer. The sale so far as the assessee was concerned, was in fact a sale within the State a sale which was also a penultimate sale for the purpose of section 5(3) of the CST Act. The goods were moved obviously at the instance of and on behalf of the buyer. The sale so far as the assessee was concerned, was in fact a sale within the State a sale which was also a penultimate sale for the purpose of section 5(3) of the CST Act. Having regard to this factual position, the law to be applied is the law declared by the Supreme Court in the case of State of Karnataka v, EM. Ashraf and Co. [1 9971 (107) STC 571. The Court in that case confined the application of the law declared in the case of Murli Manohar and Co. v. State of Haryana [1 9911 (80) STC 79 (SC) only to a situation where the sale had occasioned the movement of the goods outside the State and such sale was a deemed sale in the course of export under section 5(3) of the CST Act. 12. The Court has, in clear terms, held in the case of B.M. Askraf and Co. 3997 (107) STC 571 that whore there is a sale in the State but that sale does not occasion the movement of goods from one State to another and the sale is also a sale in the course of export, such a sale is not entitled to the exemption from payment of purchase tax under section 6 of the Karnataka Sales Tax Act. The provisions of the TNGST Act in this regard is similar. Both these statutes do not provide for any exemption from the levy of purchase tax where the goods are sold by way of sale in the course of export. 13. Though we do not concur with all that is stated by the Tribunal in this impugned order, we decline to interfere with the same as the conclusion reached by it that the assessee liable to pay purchase tax is correct. 14. 13. Though we do not concur with all that is stated by the Tribunal in this impugned order, we decline to interfere with the same as the conclusion reached by it that the assessee liable to pay purchase tax is correct. 14. The counsel submitted that the levy of penalty, however, was wholly unjustified as neither the assessing authority nor the assessee were in a position to comprehend the provision fully as even in the assessment order, the assessing officer did not, even while holding that there was a local sale, held that such a local sale cannot be regarded as having taken the assessee out of the ambit of section 7-A of the Act only because of it being a sale in the course of export, but relied upon the factum of despatch to the destination outside the State. The assessee, it was submitted, had bona fide regarded the transaction as one which did not attract purchase tax. It was also submitted that the assessee had not withheld arty material, that it had disclosed its entire turnover and in this background the authorities ought not to have proceeded to levy penalty in a mechanical way as was done by the assessing officer. The only reason given for the levy of penalty is that the assessee was found to be liable to pay purchase tax and that the assessee had not paid that tax. 15. Counsel in this context relied upon the decision of a Bench of this Court in the case of State of Tamil Nadu v. Indian Silk Traders reported in wherein it was held, inter alia, that : "......While the element of deliberateness, willfulness or a blameworthy conduct on the part of the assessee may not be necessary for invoking section 12(5) of the Act, we are clearly of the opinion that the bona fides of the assessee have to be gone into before imposing penalty.....At the risk of repetition we reiterate that the facts of each case have to be carefully analysed before coming to the conclusion whether a particular return is incorrect or incomplete and whether the assessee returned an incomplete or incorrect return, more with a view to postpone the tax legitimately due to the Government, or under a bona fide belief that his return was in accordance with law." 16. We, therefore, set aside the penalty, but remand that matter back to the assessing authorities to consider the question of levy of penalty in the light of what has been observed in this order and in the light of the law laid down by this Court in the case of State of Tamil Nadu v. Indian Silk Traders. Writ petition dismissed. Appendix The decision of the Tamil Nadu Taxation Special Tribunal consisting of J. KANAKARAJ, J. (Chairman) and P. MUTHUSAMY (Judicial Member) in Razack Trading Co. v. State of Tamil Nadu (T.C.R. Nos. 287 and 288 of 1997 decided on February 2, 1999) runs as follows : RAZACK TRADING Co. v. STATE OF TAMIL NADU P. MUTHUSAMY (Judicial Member).The assessees are the petitioners in both the (tax cases) revisions in respect of the levy of purchase tax on chillies and jaggery under section 7-A of the TNGST Act, 1959 on Rs. 13, 88, 871 and Rs. 28, 165 respectively and also levy of penalty of Rs. 69, 444 under section 12(5)(iii) of the TNGST Act calculated at 100 per cent of the tax due for the assessment year 1982-83 (chillies). 2. The Razack Trading Company, the petitioners herein, are the assessees on the files of the Deputy Commercial Tax Officer, Ariyalur and dealers in chillies and coriander and reported a total and taxable turnover of Rs. 22, 79, 202.25 and Rs. 28, 25, 838.35, but the assessing authority after verifying the records determined the total and taxable turnover at Rs. 55, 00, 526 and 17, 00, 325 respectively. The assessing authority in his order dated February 28, 1984 held that the purchase value of the chillies sold to the exporter Allanasons (P) Limited, Bombay at Rs. 1, 38, 871 had to be necessarily taxed at 5 per cent and under section 7-A(l)(c) of the TNGST Act, as the goods were despatched to a place outside the State except as a direct result of inter-State sales ; besides the sale value of jaggery Rs. 28, 615 had to be taxed at 5 per cent as there was no proof for the export sale, and also levied penalty at 150 per cent of the tax due under section 12(5)(iii) of the TNGST Act on the ground that the assessees wilfully suppressed the taxable turnover of chillies of Rs. 13, 88, 871 during the assessment year 1982-83. 3. 13, 88, 871 during the assessment year 1982-83. 3. Aggrieved by the said order the assessees preferred appeals in A.P. No. 321 of 1984 and 353 of 1984 before the Appellate Assistant Commissioner, Tiruchirapalli against the levy of purchase tax at 5 per cent under section 7-A(l)(c) of the TNGST Act on the purchase value of the chillies and on the sale value of jaggery and also against the levy of penalty under section 12(5)(iii) for the wilful suppression of the turnover of chillies as stated above. The Appellate Assistant Commissioner dismissed both the appeals by confirming the findings of the assessing authority that the sale by the assessees to Allanasons (P) Ltd., Bombay (chillies) was not as a direct result of sale in the course of inter-State trade or commerce and thereby it became liable to tax under section 7-A(l)(c) of the TNGST Act especially the turnover of Rs. 13, 88, 871 had been the purchase turnover of chillies effected from the non-dealers, and so also confirmed the assessment at five per cent of Rs. 28, 615 for jaggery as there was no proof to substantiate that the sale of jaggery was for export, and regarding the penalty it was reduced from 150 per cent to 100 per cent by refixing at Rs. 69, 444 of the tax due (chillies). 4. Against the said order the assessees preferred appeals in MTA Nos. 339 of 1995 and 338 of 1995 before the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Madurai which by its common order dismissed both the appeals by confirming the findings of the first appellate authority in total by rendering specific findings that the goods were sent to a place outside the State on consignment sales. Thereafter the assessees preferred revisions before the High Court of judicature at Madras in Tax Cases (Revision) Nos. 706 and 707 of 1986 and the same had been transferred before this Special Tribunal by virtue of the provision under section 19 of the Tamil Nadu Taxation Special Tribunal Act, 1992 in T.C. (R) Nos. 287 and 288 of 1997 respectively. 5. 706 and 707 of 1986 and the same had been transferred before this Special Tribunal by virtue of the provision under section 19 of the Tamil Nadu Taxation Special Tribunal Act, 1992 in T.C. (R) Nos. 287 and 288 of 1997 respectively. 5. It is urged in the grounds of appeal that the buyer Allanasons (P) Ltd., Bombay is an exporter and the assessee being the dealer in chillies is a seller and hence there is no question of treating Allanasons as an agent of the assessee and hence there is no question of consignment sale or consignment transfer as held by the Appellate Tribunal. It is also further claimed that the said sale of chillies, to Allanasons is penultimate sale against form "H" could not be under section 5(3) of the Central Sales Tax Act, 1956 and thereby it could be either a local sale or inter-State sale and in either case section 7-A(l)(c) of the TNGST Act will not be attracted especially as per the sale bill the commodity was sold at Ariyalur and delivered at Ariyalur itself. If it is an inter-State sale in view of the findings that the goods sent to a place outside the State due to a sale at Ariyalur and hence there is no question of levy of purchase tax under section 7-A(l)(c) of the TNGST Act. It is also further contended that the claim of sales of jaggery of the sale value of Rs. 28, 615 under form "H" would itself show that it is only for export and thereby exempted from tax. In respect of penalty it is claimed that the levy of penalty could not be automatic even if there is any suppression, as the alleged suppression should be wilful. 6. Considering all these aspects now the points for consideration are : (i) Whether the levy of purchase tax at five per cent under section 7-A of the TNGST Act on a turnover of Rs. 13, 88, 871 for chillies is sustainable, or the goods involved moved to a place outside the State as a direct result of inter-State sale. (ii) Whether the levy of tax at five per cent on a turnover of Rs. 28, 615 for sale of jaggery is permissible. (iii) Whether the levy of penalty of Rs. 69, 444 calculated at 100 per cent of the tax due (chillies) is sustainable. 7. (ii) Whether the levy of tax at five per cent on a turnover of Rs. 28, 615 for sale of jaggery is permissible. (iii) Whether the levy of penalty of Rs. 69, 444 calculated at 100 per cent of the tax due (chillies) is sustainable. 7. It is admitted fact that the assessce being the dealers in chillies and coriander purchased chillies locally from the agriculturists and marketing committee (non-dealers) and thereby the purchase turnover for the same is Rs. 13, 88, 871.15 arid for the same admittedly the corresponding sale turnover is Rs. 15, 83, 190. It is undisputed fact that for the said sales turnover the assessees have issued sale bill No. 155 on May 29, 1982 to M/s. Allanasons (P) Limited, Bombay-37 which contained the following particulars. "To the value of 5, 880 bags of dry chillies stalkless each weighing 25 kgs. net (excluding gunny bag) Ariyalur Godown Delivery goods despatched to Cochin for export to ODESSA (USSR) against "H" Form. So it is obvious that M/s. Allanasons (P) Limited, Bombay-37 purchased 147 M. Tonnes in 5, 880 bags of chillies for Rs. 15, 83, 190 from the assessees on May 29, 1982 against "H" form for export. Hence it is to be found out whether it is a last sale or purchase preceding export and hence it is in the course of export or it is a consignment sale as held by the lower authorities on the ground that the despatch of goods to a place outside the State not as a direct result of sale in the course of inter-State trade or commerce. It is no doubt as mentioned in the sale bill the sale of chillies to Allanasons was followed by delivery of the goods at Ariyalur godown of the assessees by despatching the same to Cochin port for shipment for export to ODESSA (USSR) as against "H" form. So the "H" form produced in support of the same would clearly show that 1, 47, 000 kg. or 147 M. Tonnes of dry chillies were purchased by Allanasons and hence the "H" form certificate, certified by the Bombay authorities (Commercial Department) was handed over to the dealer and the sale price or turnover had been also mentioned therein as Rs. 15, 83, 190. The genuineness of the "H" form certificate had not been disputed by the revenue at any point of time. 15, 83, 190. The genuineness of the "H" form certificate had not been disputed by the revenue at any point of time. Even in the concerned bill of lading the very same particulars are also found as mentioned in form "H" certificate. So the form "H" certificate duly signed by the Director of Allanasons is tallying with the sale bill as well as bill of lading dated May 31, 1992, for the goods shipped in Cochin port, in order to take the cargo to Moscow, USSR, as detailed in the bill of lading. The receipt of clearing agent of Cochin port would further confirm that the goods were despatched from Ariyalur godown to Cochin port and loaded on the ship at Cochin port in the course of export. So the export sale by Allanasons stands unrebutted. The other documents would also establish the export sale. 8. One another aspect is that 120 bundles of gunny bags were supplied by M/s. Allanasons (P) Limited, Bombay, and transported in a truck bearing Regn. No. TNB 3838 on April 10, 1982 to Ariyalur as per the bill issued by transport service by name Jamnagar Roadways and the telegram for having sent the same to Ariyalur would amply prove the fact that the particulars mentioned in the sale bill as "excluding gunny bag" is in consonance with the fact of export of chillies by M/s. Allanasons (P) Limited, Bombay of the same chillies purchased from the dealer under the sale bill dated May 29, 1982. In addition even as per form "H" certificate the export was under agreement with or order of the foreign buyer in No. Ex 50086 dated May 12, 1982. So the mere fact of non-production of the said agreement of export as mentioned by lower authority would not stand in the way of our conclusion that it was in the course of export out of India, especially as the form "H" certificate issued by the Bombay authority concerned had been handed over by the exporter to the assessees. So the mere fact of non-production of the said agreement of export as mentioned by lower authority would not stand in the way of our conclusion that it was in the course of export out of India, especially as the form "H" certificate issued by the Bombay authority concerned had been handed over by the exporter to the assessees. In other words the particulars in "H" form tallying with sale bill, bill of lading, etc, had not been disputed by the revenue, and thereby the non-production of the said agreement would not in any way dispel the fact that the sale of the dealer/assessee to M/s. Allanasons Exporter should be deemed to be in the course of export being penultimate sale, which took place for the purpose of complying with agreement for or in relation to the export by M/s. Allanasons (P) Limited to a company at ODESSA, Moscow, USSR. 9. The Revenue has placed much reliance upon the delivery note issued by the dealer/assessees to transport the commodity namely chillies to Cochin port for shipment. Even in the delivery note it has been clearly mentioned that the goods despatched had been sold to Allanasons (P) Limited, Bombay and sent to clearing agent for shipment for export by Allanasons. So the delivery note is no way inconsistent or in variance on refuting the materials found in the sale bill. Bill of lading, form "H" certificate and transport document for sending gunny bags sent by Allanasons (P) Limited, for packing the chillies for export. On the other hand it is further confirmed that the particulars found in those records would establish that the sales by the dealer to Allanasons was the last sale within the State in the course of export. Being so, it is nothing but a sale preceding export, and with the result, it is a deemed sale in the course of export by virtue of section 5(3) of the Central Sales Tax Act, 1956. There is also no material to show that the exporter is either branch or agent of the assessee. It is not as if form Fl was issued by the assessees. There is also no material to show that the exporter is either branch or agent of the assessee. It is not as if form Fl was issued by the assessees. So it is not a consignment sale, nor intra-State sale nor the goods were despatched to a place outside the State as a direct result of sale in the course of inter-State trade or commerce as the goods were despatched for shipment in Cochin port for export to ODESSA by Allanasons (P) Limited. 10. The learned Senior Counsel for the petitioners contended that the sale by the petitioners to Allanasons, Bombay is neither consignment sale as held by the lower authorities nor it could be a fourth category of sale other than the sale as mentioned in section 7-A(l)(a) or (b) or (c) of the TNGST Act. Further argument was that if it was not a consignment sale it could be an inter-State sale thereby no purchase tax could be levied under section 7-A(l)(c) of the TNGST Act, due to the fact that it was an inter-State sale as the goods moved to a place outside the State to Cochin as a direct result of inter-State sale, of the assessee, to another dealer Allanasons (P) Limited, Bombay. Of course this arguments may be outwardly attractive but really it is nothing but ignoring the provisions of the CST Act much less section 5(3) of the said Act. Even on facts as already stated above the goods moved to Cochin port for shipment for export by Allanasons and it was moved not as a direct result of inter-State sale. So there is no inter-State sale by despatching goods to a place in the other State. 10-A. At this stage, it is pertinent to point out that in the Punjab Sales Tax Act the sale in the course of export has been also included, in order to entitle the dealer for exemption of purchase tax as in the case of inter-State sale as may be seen in section 4-B of the said Act as follows : "4-B Levy of purchase tax on certain goods.'Where a dealer who is liable to pay tax under this Act purchases any goods other than those specified in Schedule 'B' from any source and............ (i) to (iii).................... (i) to (iii).................... (iv) sends them outside the State other than by way of sale in the course of inter-State trade or commerce or in the course of export out of the territory of India." So the exemption for export sale under section 5(3) of the CST Act had not been included in section 7(A)(l)(c) of the TNGST Act. So such omission in section 7-A(l)(c) of the TNGST Act is deliberate. In addition while considering the legislative powers of the State in levying purchase tax at the stage of purchase for manufacturing and transferring of manufactured goods outside the State, it was decided in Devi Dass Gopal Krishan Pvt. Ltd. v. State of Punjab reported in 11 9941 (95) STC 170 (SC), that the State has power to impose such tax and it would not amount to tax on despatch or consignment. 11. It is obvious that the penultimate sale in Tamil Nadu made in the course of export, is well within the ambit of section 5(3} of the CST Act but it could not in any way avoid purchase tax under section 7-A(l) of the TNGST Act in respect of the purchases effected preceding the penultimate sale. So the local purchase made from the non-dealers preceding the penultimate sale has to be necessarily liable for purchase tax under section 7-A(l) of the TNGST Act. So this omission, of the words by the Legislature "in the course of export out of the territory of India" in section 7-A(l)(c) of the TNGST Act is deliberate and thereby if the penultimate sale is in the course of exports the prior transaction, i.e., purchase by the dealer from the non-dealers would attract purchase tax under section 7-A of the TNGST Act. To put it in a nut shell as per section 7-A(l)(c) of the TNGST Act only if the last transaction in the State is inter-State sale there cannot be any levy of purchase tax and in all other last transaction within the State purchase tax is leviable. So firstly in section 7-A(l)(c) of the TNGST Act has not incorporated the sale "in the course of export", i.e., the sale covered under section 5(3) of the CST Act. Secondly the State Act is governed by section 5(3) of the Central Sales Tax Act. So firstly in section 7-A(l)(c) of the TNGST Act has not incorporated the sale "in the course of export", i.e., the sale covered under section 5(3) of the CST Act. Secondly the State Act is governed by section 5(3) of the Central Sales Tax Act. So when admittedly it is the definite case of the assessees that the goods sold and delivered at Ariyalur in the dealer's godown were for the export against from "H" and as per the sale bill it is obvious that this penultimate sale or this sale preceding export is only in the course of export, by virtue of section 5(3) of the CST Act. Hence it is obvious that the purchase preceding the sale in the course of export is liable to tax under substantive portion of section 7-A(l) of the TNGST Act. It is nobody's case that the sale effected by the assessee to Allanasons was for the despatch of goods to a destination in other State or there was any agent of the assessee at Cochin. On the other hand, as already stated this penultimate sale was effected and the goods despatched at Ariyalur for export out of India through Cochin Port, by Allanasons, Bombay for the purpose of complying with the agreement or order in relation to such export. It is obvious that the goods never moved either as a consignment sale or as a direct result of inter-State sale as it was sent to clearing agent at Cochin port for shipment to ODESSA, USSR. To name it as an inter-State sale it is not as if Allanasons issued "C" forms and on the other hand form "H" certificate was issued to specify that the purchase of goods were in the course of the export, as the date of agreement or order for export from the foreign buyer (foreign) in ODESSA, was May 12, 1982. So it is obvious that the last purchase or sale within the State was for the purpose of complying with the agreement for or in relation to such export. 12. There are three transactions in this case, viz., (1) The purchase of chillies by the assessees from the agriculturist and marketing committee that is from the non-dealers. (2) The sale by the assessees-dealer to the exporter Allanasons, Bombay for export which was the last purchase point in Tamil Nadu. 12. There are three transactions in this case, viz., (1) The purchase of chillies by the assessees from the agriculturist and marketing committee that is from the non-dealers. (2) The sale by the assessees-dealer to the exporter Allanasons, Bombay for export which was the last purchase point in Tamil Nadu. (3) Export sale by M/s. Allanasons (P) Limited, Bombay to a foreign buyer or the company at ODESSA, USSR as mentioned in the bill of lading. In this case purchase tax has to be levied in respect of the first transaction only which is the point at issue in this case. So the second transaction namely penultimate sale which is proceeding export, i.e., only a sale deemed to be in the course of export by virtue of section 5(3) of the GST Act and definitely it could be neither intra-State sale or inter-State sale. This principle that the sale effected by the assessees to the exporter Allanasons, Bombay (second transaction) had to be regarded as a sale in the course of export by virtue of section 5(3) of the CST Act, 1956 since it is neither an intra-State sale nor as a result of inter-State sale, trade or commerce and consequently the first transaction is within the ambit of section 7-A(l) of the TNGST Act had been clearly laid down in the decision State of Karnataka v. B.M. Ashraf and Co. reported in as section 6(1) of the Karnataka Sales Tax Act, 1957 and section 7-A(l) of the TNGST Act, 1956 are identical, 13. The effect of section 5(3) of the CST Act has been also clearly spelled out in a case in Sovereign Spices v. State of Kerala by the Kerala High Court reported in wherein it was held that the penultimate sale, i.e., the sale immediately preceding export will be eligible for the benefit of section 5(3) of the CST Act and not any more preceding purchases and thereby the purchases by the assessees from the non-dealers is liable for purchase tax. The very same principle has been also laid down in Mohammed Ishaq and Sons v. Commissioner of Commercial Taxes in Karnataka as well as in Jayalaxmi Industries v. Deputy Commissioner of Commercial Taxes (Assessments), Turakur reported in. These decisions were brought to the notice of the Senior Counsel for the petitioners with reference to section 5(3) of the CST Act, etc. These decisions were brought to the notice of the Senior Counsel for the petitioners with reference to section 5(3) of the CST Act, etc. In this present case the penultimate sale (second transaction), namely, the sale by assessee to the exporter Allanasons, Bombay was the sale immediately preceding export and thereby it is in the course of export eligible for the benefit of section 5(3) of the TNGST Act and with the result the purchase (first transaction) made by the assessees from the non-dealers which was preceding the last sale in the State should be liable for purchase tax under section 7-A(l) (parent section) of the TNGST Act. In all these decisions it has been held that under section 5(3) of the CST Act only the last sale or purchase preceding the export sale is deemed to be a sale in the course of export. Hence it is clear that the purchases made by the assessees from the non-dealers were not the immediate preceding purchase which occasioned the export eligible for exemption under section 5(3) of the CST Act. So the petitioners could not seek exemption from the levy of tax on their purchases made by them from the unregistered dealers which were transactions preceding the penultimate sale. In other words the petitioners could not claim any exemption from the levy of purchase tax under section 7-A(l) of the TNGST Act as the last sale in the State is not inter-State sale, but only a sale in the course of export covered under section 5(3) of the CST Act. Further as already stated above the exemption of levying purchase tax under section 7-A(l)(c) of the TNGST Act is not covering the sale in the course of export as enumerated under section 5(3) of the CST Act, though such exemption of levying purchase tax is provided in section 7(A)(l)(c) of the TNGST Act for the goods carried as a direct result of inter-State sale. 14. 14. It is to be noted that while dealing with section 5(3) of the TNGST Act in the commentaries of the CST law by Shri S. Srinivasan, in the first edition 1998 at page 88 in the second and third paras it has been clearly explained as follows : "Where a tax on purchases (and not sales) is leviable under the State law, the first purchase before export, which will be by the exporter himself, will be eligible for the benefit of this sub-section and not any preceding purchases. When a dealer purchased such goods in the State where there was a levy on the last purchases in. the State and sold them to an exporter, the benefit of this section was denied to the former as it was held admissible only to the latter : Mohammed Ishaq and Sons v. Commissioner of Commercial Taxes in Karnataka [1 9921 (87) STC 36 (Kar). By declaring the penultimate sale or purchase in the State as a sale in the course of export, the powers of the State Legislature to tax the transactions completed within its territory was taken away and to this extent, this sub-section infringes on these powers. The validity of sub-section (3) of this section was upheld by the apex Court in Consolidated Coffee Ltd. v. Coffee Board [1 9801 (46) STC 164 at page 175 on the ground that this sub-section does not create a legal fiction but only lays down a principle of general applicability in accordance with article 286(2) and hence it is valid. This view has been based upon the principles laid down in the above cited decisions. The first transaction, namely, purchasing chillies from the agriculturists is preceding to the last sale within the State or preceding to a sale in the course of export (second transaction). So now we are concerned only with the first transaction for which purchase tax has to be necessarily levied under section 7-A of the TNGST Act, 1959. 15. The learned Senior Counsel Mr. So now we are concerned only with the first transaction for which purchase tax has to be necessarily levied under section 7-A of the TNGST Act, 1959. 15. The learned Senior Counsel Mr. C. Natarajan, appearing for the petitioners relied on certain decisions in order to claim exemption on the purchase turnover of chillies and more specifically urged that no purchase tax could be levied much less under section 7-A(l)(c) of the TNGST Act and in support of his contention cited certain decisions : (1) State of Orissa v. Minerals and Metals Trading Corporation of India Ltd. reported in. (2) Murli Manohar and Co. v. State of Haryana reported in. (3) State of Orissa v. Johrimal Gajanand reported in and on Onkarlal Nandlal v. State of Rajasthan reported in [1 9851 (60) STC 314 (SC). In Onkarlal Nandlal case three honourable Judges of Supreme Court while dealing with the expression "resale within the State" in form ST-17 to the Rajasthan Sales Tax Rules by applying section 4(2) inclusive of explanation in the CST Act had held that a sale which is in the course of inter-State sale cannot be taxed by State Legislature even if situs is within the State, because the State Legislature has no legislative competence to impose tax on the inter-State sale and that can be done only by the Parliament. Here factually in this case the second transaction is not a sale in the course of inter-State trade or commerce, but only in the course of export by virtue of section 5(3) of the CST Act and thereby this penultimate sale could not be taxed but the earlier sale or purchase and in this case, purchase of chillies from the agriculturist and non-dealers preceding to the penultimate sale is liable to purchase tax under section 7-A of the TNGST Act (parent section). So the principle laid down in Onkarlal case (SO is no way helpful to the petitioner. 16. In the decision reported in State of Orissa v. Minerals and Metals Trading Corporation of India Ltd. (SO the assessee who had entered into contract for export to Japanese buyers of mineral ores, purchased the same from the mine owners against declaration in terms of rule 27 and section 5(2) of the Orissa Sales Tax Act, 1947 to the effect that the mineral ores would be resold within the State of Orissa. The Japanese buyer had arranged for transport, insurance, etc. In such circumstances, it was to be decided whether the assessee contravened the declaration given by them. Hence the meaning for a sale "in the course of export of the goods" and sale "within the State of Orissa" were the points for determination wherein it was held that the export sale as envisaged under article 286(l)(b) of the Constitution of India continued to be in the process of completion of export till the goods reached the destination in the foreign country, and further the delivery at the port for shipment in India did not amount to conclusion of export sale. It was a point on appropriation. Hence it went against the assessee. So the facts of the cited cases are entirely different from facts of this case, as we are not concerned about the point of situs in the export sale or inter-State sale. So the cited case is no way applicable to the facts of this case. The case reported in State of Orissa v. Johrimal Gajanand (SO is also in respect of inter-State sale with the declaration that the goods purchased would be resold within the State. As already stated above, as there is no inter-State sale in this case. The facts of the cited case will not be applicable to the facts of this case. Even in Murli Manohar case reported in the assessee who were registered dealers purchased raw materials in the State of Haryana without paying tax by furnishing declaration under section 24 of the State Act and manufactured certain goods with the aid of the raw materials and sold it to the dealers who in turn exported the goods outside India. In such circumstances, the question was whether purchase tax could be levied for the raw materials purchased and it was held that it was not in the course of export as envisaged under section 5(1) of the CST Act. Here, in this case it has been already held that the penultimate sale is in the course of export and further there is no question of finished product or undertaking involved in this case. So the facts of the cited cases are also not applicable in the facts of this case. 17. Here, in this case it has been already held that the penultimate sale is in the course of export and further there is no question of finished product or undertaking involved in this case. So the facts of the cited cases are also not applicable in the facts of this case. 17. So bearing all these facts in mind the principles laid down in the above referred decisions reported in (1) State of Karnataka v. B.S. Ashraf and Co. (2) Sovereign Spices v. State of Kerala [1 9981 (110) STC 429 (Ker). (3) Jayalaxmi Industries v. Deputy Commissioner of Commercial Taxes (Assessments), Tumkur. (4) Mohammed Ishaq and Sons v. Commissioner of Commercial Taxes in Karnataka. are applicable to the facts of this casedue to the fact that the penultimate sale is neither a consignment sale as held by the lower authorities nor direct result of inter-State sale as claimed by the petitioners but it is a sale in the course of export by virtue of section 5(3) of the CST Act. Section 7-A(l)(c) of the TNGST Act does not except in export sale. The findings of the lower authorities that the penultimate sale is consignment sale is inconsistent with the records produced as discussed in detail earlier paras. In the result, we confirm that the petitioners are liable to pay purchase tax at the rate of five per cent under section 7-A of the TNGST Act for the chillies purchased from the non-dealers on a purchase turnover of Rs. 13, 88, 871 as it is preceding to the penultimate sale namely to the sale in the course of export. Further there is no basis for the findings that it is consignment sale. We rely upon a decision in this connection in State of Tamil Nadu v. Andaman Timber Industries Ltd. reported in, wherein this aspect has been clearly brought about in para 17 at page 458. The relevant portion is as follows : "A finding must always be based upon certain material facts. We rely upon a decision in this connection in State of Tamil Nadu v. Andaman Timber Industries Ltd. reported in, wherein this aspect has been clearly brought about in para 17 at page 458. The relevant portion is as follows : "A finding must always be based upon certain material facts. A finding, not based upon any material fact, is not finding at all in the eye of law and such a finding cannot at all be called, anything other than the one having its edifice based on perversity, " So the findings of facts in the present case are not based upon or supported by the documents or records so also the findings by the lower authorities is not a finding in the eye of law and hence, we could as well interfere in these revisions." 18. Coming to the penalty it is obvious that assessee being the exporters also for a number of years besides selling commodities for export to other exporters. Knowing fully well that they are liable for purchase tax, had deliberately and knowingly suppressed the purchase turnover which is taxable as purchase tax is obviously liable for penalty. So in such circumstances the levy of penalty which had been already reduced to 100 per cent tax on due by the Appellate Assistant Commissioner and the same had been confirmed by Appellate Tribunal need not be interfered with. 19. It is clear cut specific finding that in respect of a turnover of Rs. 28, 615 the assessees were not able to produce either bill of lading or form "H" certificate towards the sale of jaggery effected for export. Even now, there is no material to displace the said finding. So the petitioners are not eligible for the exemption claimed in respect of this turnover of Rs. 28, 615 for the sales of jaggery effected. So the petitioners are liable to pay tax, at the rate of 5 per cent including Rs. 28, 615 as held by the lower authorities. For the reasons already stated above both the revisions are dismissed in all respects. And this Tribunal doth further order that this order on being produced be punctually observed and carried into execution by all concerned. Issued under my hand and the seal of this Tribunal on the 2nd day of February, 1999. Petition dismissed.