Intermediary buyer arrangements do not sever the original sale link where delivery in the taxing State follows the original contract.

Consignments delivered in Bihar were treated as sales under the Bihar Sales Tax Act because the movement of goods and actual delivery remained directly referable to the original contract of sale. Later arrangements entered into by the intermediary buyer did not break the continuity of the original transaction or create a separate sale with the ultimate buyers. As the seller retained rights and remedies only against the original buyer, and there was no privity with the end buyers, the subsequent dealings were only ancillary. The consignments therefore fell within the statutory explanation and were rightly assessed to sales tax; the petition was rejected and the assessment upheld.

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Issues: Whether consignments delivered in Bihar pursuant to instructions of the intermediary buyer were sales within the meaning of the explanation to clause (g) of section 2 of the Bihar Sales Tax Act, 1947, so as to attract sales tax.

Analysis: The movement of goods originated from the original contract between the seller and its buyer, and the later arrangements entered into by the buyer did not break the continuity of that transaction. The actual delivery in Bihar was only once, and it was directly referable to the original sale transaction, not to any alleged subsequent sale. The contractual terms showed that the seller's rights and remedies remained only against the original buyer, there being no privity with the ultimate buyers. The later dealings were ancillary or subsidiary to the principal transaction and did not alter the character of the delivery as one directly resulting from the original sale.

Conclusion: The consignments fell within the statutory explanation and were rightly assessed to sales tax.

Final Conclusion: The petition was rejected and the assessment was upheld.

Ratio Decidendi: Where the movement and actual delivery of goods in the taxing State are directly referable to the original contract of sale, later intermediary transactions do not sever that link or exclude the sale from the statutory definition.

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