Inter-State sales tax jurisdiction turns on where movement of goods begins; Andhra Pradesh could not assess these turnover items.

Under section 9(1) of the Central Sales Tax Act, inter-State sales were taxable only in the State from which movement of the goods commenced. Branch sales of goods moved from Bombay could not be assessed in Andhra Pradesh because later dispatch of invoices and railway receipts from Hyderabad did not change the place of commencement of movement. Agency sales were also not taxable in Andhra Pradesh, as the assessee was only a commission agent and did not acquire title to the goods; the direct despatches from Gujarat remained inter-State transactions taxable, if at all, in the State of origin. The assessment and revisional notices were therefore without jurisdiction.

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Issues: (i) Whether the State of Andhra Pradesh had jurisdiction to assess the branch sales under the Central Sales Tax Act, and (ii) whether the turnover relating to agency sales was taxable in Andhra Pradesh or only in the State from which the movement of goods commenced.

Issue (i): Whether the State of Andhra Pradesh had jurisdiction to assess the branch sales under the Central Sales Tax Act.

Analysis: The levy and collection of tax under section 9(1) of the Central Sales Tax Act, 1956, as it then stood, had to be in the State from which the movement of the goods commenced. The goods covered by the branch sales moved from Bombay, and the subsequent despatch of railway receipts and invoices from Hyderabad did not shift the place of commencement of movement. The character of the transaction as an inter-State sale did not alter this position.

Conclusion: The State of Andhra Pradesh had no jurisdiction to assess the branch sales turnover.

Issue (ii): Whether the turnover relating to agency sales was taxable in Andhra Pradesh or only in the State from which the movement of goods commenced.

Analysis: The agreement showed that the assessee was a commission agent and not a purchaser or commercial agent acquiring title to the goods. The goods were despatched directly by the manufacturer from Gujarat to the customers, and the assessee merely handled the documents and endorsed the railway receipts in favour of the buyers. No sale in favour of the assessee was established. Even assuming the assessee effected the subsequent sale, section 9(1) required taxation in the State from which movement commenced, which was Gujarat. Under section 3 of the Central Sales Tax Act, 1956, the transactions were inter-State sales, but the charging jurisdiction did not lie in Andhra Pradesh.

Conclusion: The agency sales turnover was not assessable to tax by Andhra Pradesh.

Final Conclusion: The assessment and the revisional notices were without jurisdiction, and the writ petitions succeeded with costs.

Ratio Decidendi: Under section 9(1) of the Central Sales Tax Act, 1956, inter-State sales are taxable only in the State from which the movement of goods commenced, and a commission agent who does not acquire title to the goods is not liable as a purchaser for the manufacturer's direct despatches.

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