Inter-State sale requires movement under the sale contract; transport permit alone did not prove Central sales tax liability.

Inter-State sales require both a sale of goods and movement from one State to another, with that movement occasioned by the contract of sale. On the facts recorded, the assessee consistently treated the tendu leaf transactions as local sales within Uttar Pradesh and denied inter-State movement, while the record contained no material to discredit that position. The mere existence of a transport permit was insufficient to establish inter-State sale. The burden remained on the Revenue to prove inter-State sales, and that burden was not discharged; the tax demand was therefore not sustainable.

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Issues: Whether the sales of tendu leaves were inter-State sales exigible to Central sales tax, or local sales within Uttar Pradesh.

Analysis: Inter-State sale requires both a sale of goods and movement of those goods from one State to another, and the movement must be occasioned by the contract of sale. The Tribunal's factual findings showed that the assessee consistently claimed local sales, denied any inter-State movement, and the record disclosed no material to discredit that version. The mere existence of a transport permit was insufficient by itself to establish that the sales were inter-State. The burden lay on the Revenue to prove inter-State sales, and that burden was not discharged.

Conclusion: The finding that the sales were not inter-State sales was upheld and the tax demand was not sustainable.

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