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Issues: Whether goods purchased against a declaration for resale within the State cease to be so resold merely because the subsequent resale is in the course of inter-State trade or commerce, so as to attract inclusion of the purchase price in taxable turnover.
Analysis: The expression "resale within the State" in the declaration form had to be construed in the same sense as under the State Act. By incorporation by reference, the deeming rule in section 4(2) of the Central Sales Tax Act, 1956 governed the meaning of a sale within the State for this purpose. Where the goods were specific and ascertained goods situated in the State at the time of the resale contract, the resale was deemed to take place inside the State. The fact that the same sale was also an inter-State sale under section 3 of the Central Sales Tax Act, 1956 did not destroy its character as a sale inside the State for the limited purpose of the declaration. There was no requirement in the State Act that the resale must be taxable under the State law in order to avoid the purchase-tax consequence.
Conclusion: The resale was within the State for the purposes of the declaration, and the purchase price could not be included in the assessee's taxable turnover on the footing of breach of the declaration.
Ratio Decidendi: A sale may simultaneously be an inter-State sale and a sale within the State for different statutory purposes, and where a State taxing provision incorporates the deeming rule of section 4(2) of the Central Sales Tax Act, 1956, that deeming rule controls the construction of "resale within the State" in the declaration form.
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