Title passes on inspection and appropriation at destination, making the sale taxable as a local Bihar transaction.

Property in timber sleepers passed when they were inspected, passed and branded at Jogbani, because the goods were unconditionally appropriated to the contract at that point. Later re-inspection, risk allocation, and payment conditions did not shift the place of transfer. Once title passed within Bihar, the transaction fell within the Bihar Sales Tax Act even though the contract and manufacture were outside the State. The right of re-inspection and possible rejection did not make the arrangement a sale or return contract under Section 24 of the Sale of Goods Act; it remained a conditional sale.

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Issues: (i) Whether the property in the timber sleepers passed to the purchaser at Jogbani so that the sale took place within Bihar under Section 23 of the Sale of Goods Act, 1930. (ii) Whether the transaction was taxable under Section 2(g) of the Bihar Sales Tax Act, 1947 notwithstanding that the contract was made outside Bihar and the goods were manufactured outside Bihar. (iii) Whether the transaction was a sale or return arrangement within Section 24 of the Sale of Goods Act, 1930.

Issue (i): Whether the property in the timber sleepers passed to the purchaser at Jogbani so that the sale took place within Bihar under Section 23 of the Sale of Goods Act, 1930.

Analysis: The contract required the sleepers to be inspected, passed and branded at Jogbani, and delivery for despatch was to follow only after such passing. The sleepers were unconditionally appropriated to the contract when the Sleeper Passing Officer approved and branded them at Jogbani. The contractual stipulations regarding later re-inspection, risk until final acceptance, and payment conditions did not alter the place at which title passed.

Conclusion: The property passed at Jogbani and the sale took place within Bihar. The finding is against the assessee.

Issue (ii): Whether the transaction was taxable under Section 2(g) of the Bihar Sales Tax Act, 1947 notwithstanding that the contract was made outside Bihar and the goods were manufactured outside Bihar.

Analysis: The principal clause of Section 2(g) treated a transfer of property in goods as a sale for sales tax purposes. The proviso concerning goods actually in Bihar at the time of the contract enlarged, and did not restrict, the charging provision. Once title passed within Bihar, the transaction fell within the Act, and no further requirement existed that the goods must have been in Bihar when the contract was concluded.

Conclusion: The transaction was taxable in Bihar. The finding is against the assessee.

Issue (iii): Whether the transaction was a sale or return arrangement within Section 24 of the Sale of Goods Act, 1930.

Analysis: The contractual right of re-inspection at destination and the possibility of rejection did not convert the transaction into a bailment or a true sale or return arrangement. Title had already passed at Jogbani, subject only to the buyer's option arising from subsequent inspection. The arrangement was therefore a conditional sale, not a sale or return contract.

Conclusion: Section 24 did not apply. The finding is against the assessee.

Final Conclusion: The assessee was liable to sales tax on the disputed turnover because the goods were sold within Bihar and the transaction fell within the taxing provision of the Bihar Sales Tax Act, 1947.

Ratio Decidendi: Where goods are inspected, passed and unconditionally appropriated at a place within the taxing State, property passes there notwithstanding later re-inspection or final acceptance at destination, and such a transaction is taxable as a local sale.

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