Inter-State sale characterization turns on contractual occasioning of goods movement, even without an express despatch clause.

Movement of goods from one State to another was treated as an inter-State sale where that movement was occasioned by the contract, even though the contracts did not expressly specify the place of despatch. The surrounding circumstances and actual movement of goods showed that the disputed turnover arose under five contracts in fulfilment of contractual terms, making the Tribunal's finding of local sales unsustainable. The disputed turnover was therefore characterised as inter-State sales rather than local sales, and the tax demand was deleted with costs awarded.

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Issues: Whether the disputed turnover arising under the five contracts constituted local sales or inter-State transactions.

Analysis: The contracts and the surrounding circumstances showed that the goods moved from outside the State into the State in fulfilment of the contractual terms. The absence of an express stipulation as to the place of despatch in the contract was held to be immaterial where the movement of goods was in fact occasioned by the contracts. The Tribunal's view that the transactions were local sales was found unsustainable because the contract terms and the actual movement of goods established an inter-State character.

Conclusion: The disputed turnover was held to relate to inter-State sales and was not liable to be treated as local sales.

Final Conclusion: Relief was granted by deleting the tax demand on the disputed turnover and awarding costs.

Ratio Decidendi: A transaction is an inter-State sale when the movement of goods from one State to another is occasioned by the contract, even if the contract does not expressly specify the place of despatch.

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