Controlled despatches of sugar outside Bihar were treated as taxable sales under the Bihar Sales Tax Act.

Sugar manufactured in Bihar and despatched to other States under allotment and despatch instructions was treated as taxable under the Bihar Sales Tax Act, 1947. The Court applied the same legal principle used for similar controlled despatches and held that the outward movement of sugar in the circumstances shown by the record amounted to transactions liable to sales tax. The reference was answered against the assessee, with the despatches outside Bihar held taxable.

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Issues: Whether the despatches of sugar made outside the State of Bihar were liable to be taxed under the Bihar Sales Tax Act, 1947.

Analysis: The assessee manufactured sugar in Bihar and despatched it to other States pursuant to allotment and despatch instructions issued under the control mechanism governing sugar supplies. The Court treated the controversy as covered by the same legal principle previously applied to similar despatches, and held that the outward movement of sugar in the circumstances disclosed by the record amounted to transactions liable to sales tax under the Act.

Conclusion: The despatches of sugar outside Bihar were liable to be taxed, and the question referred was answered against the assessee.

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