Import liability under sales tax law depends on whether the sale contract directly occasions inter-State movement of goods.

A dealer is treated as an importer under rule 2(d-1)(b) where its prior sale directly occasions the movement of goods from outside Uttar Pradesh into the State. Applying the settled test under section 3 of the Central Sales Tax Act, the decisive question is whether inter-State movement was a covenant or incident of the sale contract; passage of property is immaterial. On the facts found, orders placed for delivery in Uttar Pradesh necessarily caused the import of kerosene from outside the State. The assessee was therefore the importer and was liable to sales tax on the turnover of kerosene oil.

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Issues: Whether, on the facts found, the assessee was an importer within the meaning of rule 2(d-1)(b) of the U.P. Sales Tax Rules and liable to sales tax on the turnover of kerosene oil.

Analysis: The liability turned on whether the import of kerosene from outside Uttar Pradesh was the direct result of a prior contract of sale. Under the relevant notification, kerosene oil was taxable only at the point of sale by the importer. Rule 2(d-1)(b) treated as importer the dealer whose prior sale directly occasioned the import. Applying the settled principle under section 3 of the Central Sales Tax Act, 1956, the decisive test was whether the movement of goods from one State to another was a covenant or incident of the contract of sale. The Court held that the passage of property was immaterial and that the orders placed by the assessee for delivery in Uttar Pradesh necessarily occasioned the movement of the goods from outside the State.

Conclusion: The assessee was the importer within rule 2(d-1)(b) and was liable to sales tax on the turnover of kerosene oil.

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