Branch transfer for export is not an intra-State sale when the transaction is in the course of export.

Cotton purchased at Bhatinda and transferred through the Bombay branch for export was not a taxable intra-State sale under the Punjab General Sales Tax Act. The transfer from the Punjab branch to Bombay was treated as a branch movement, not a sale within Punjab, and the relevant transaction was found to be in the course of export. On that basis, the amount was excluded from taxable turnover, and the assessment was unsustainable.

---

---

Issues: Whether the cotton purchased by the assessee at Bhatinda and transferred through its Bombay branch for export outside India was liable to sales tax under section 5(2)(a)(vi) of the Punjab General Sales Tax Act, 1948.

Analysis: The assessee purchased cotton at Bhatinda and thereafter sent it to its head office at Bombay, from where it was exported outside India. The transfer from the Bhatinda branch to Bombay did not amount to a sale within the State of Punjab. The taxable sale, if any, was the export transaction, and the transaction was found to be in the course of export. On that footing, the amount claimed was not includible in taxable turnover and the assessment made by the taxing authority was unsustainable.

Conclusion: The assessee was entitled to the deduction and the sale was not liable to sales tax at Bhatinda.

Final Conclusion: The appeal failed and the order setting aside the assessment was maintained.

Ratio Decidendi: Goods purchased within the State and subsequently transferred to another branch for export are not taxable as an intra-State sale where the sale is found to be in the course of export.

---