Inter-branch transfers are not taxable sales where records show only despatches and no completed sale is proved.

Goods despatched from one branch to another were not taxable sales where the account books and invoices showed only inter-branch transfers and no completed sale was proved. The assessing authority, having called for the accounts, was required to evaluate the evidence produced and could not sustain the assessment by merely accepting the return without examination. Mere inclusion of sales tax entries in invoices did not by itself establish a taxable sale. The inter-branch despatches were therefore not liable to tax, and rebate was allowable on the amount covered by those transfers.

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Issues: Whether goods despatched from one branch to another outside the State constituted a taxable sale, and whether the assessing authority was bound to consider the accounts and invoices produced after proceeding to call for them.

Analysis: Once the assessing authority called for the accounts, the assessment could not rest merely on acceptance of the return without evaluating the evidence produced. The account books and invoices showed despatches to the assessee's own branch and not a completed sale. Mere entries of sales tax in the invoices did not by themselves establish taxable sales, and despatches from one branch to another were not taxable unless completion of sale was shown by evidence.

Conclusion: The inter-branch transfers were not taxable sales, and the assessee was entitled to rebate on the amount covered by those despatches.

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