Inter-State sale under CST Act depends on contract-caused movement of goods, not when title finally passes.

Section 3(a) of the Central Sales Tax Act applies where the movement of goods from one State to another is a covenant or incident of the contract of sale, and the decisive test is whether that movement was occasioned by the contract rather than the point at which title passed. A contract to sell, including one contemplating transfer of property on future acceptance, can still amount to a sale for this purpose if the goods are despatched in pursuance of that contract. On the facts, the goods moved from Orissa to Calcutta under the contract and were accepted there, so the transactions were inter-State sales and the levy by Orissa was upheld.

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Issues: Whether the transactions were inter-State sales within section 3(a) of the Central Sales Tax Act, 1956, when the goods moved from Orissa to West Bengal pursuant to contracts entered into before the goods were finally accepted in West Bengal and the property in the goods passed only on such acceptance.

Analysis: The expression "sale" in section 2(g) of the Central Sales Tax Act, 1956, is wide enough to include an agreement to sell where the contract stipulates transfer of property in goods. Section 3(a) applies when the sale or purchase occasions the movement of goods from one State to another. The decisive test is whether the movement is a covenant or incident of the contract of sale, not the point at which title passes. A transaction does not escape section 3(a) merely because the goods were future or unascertained at the time of the agreement, if the contract envisaged their movement from one State to another and the movement occurred in pursuance of that contract. The contract terms, despatch from Orissa to Calcutta in the buyers' names, and ultimate acceptance in Calcutta showed that the inter-State movement was occasioned by the contract and the completed sale.

Conclusion: The transactions were inter-State sales within section 3(a) of the Central Sales Tax Act, 1956, and the levy by the State of Orissa was valid.

Ratio Decidendi: Where a contract of sale or agreement to sell contains a stipulation, express or implied, for movement of goods from one State to another and the goods so move in pursuance of that contract, the sale is an inter-State sale under section 3(a) of the Central Sales Tax Act, 1956, irrespective of the State in which title ultimately passes.

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