Inter-State sale of timber turns on integrated movement of goods as part of the bargain, excluding State tax.

Sales of timber were treated as inter-State sales where the bargain itself required movement of goods from Bihar to West Bengal. Under section 3 of the Central Sales Tax Act, a sale is inter-State when the movement from one State to another is an integral part of a single connected transaction, and section 4 of the Bihar Sales Tax Act exempts such sales from State tax. The facts relied on included phone orders, prompt dispatch to West Bengal, truck details in credit memos, and Form C declarations. On that basis, the sales fell outside the State taxing net.

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Issues: Whether the sales of timber to a registered dealer in another State were sales in the course of inter-State trade or commerce and therefore exempt from tax under the Bihar Sales Tax Act, 1959.

Analysis: Section 4(1) of the Bihar Sales Tax Act, 1959 exempts sales in the course of inter-State trade or commerce, and section 4(2) applies the Central Sales Tax Act, 1956 for determining whether a sale is so made. Under section 3 of the Central Sales Tax Act, 1956, a sale is inter-State if it occasions movement of goods from one State to another, and the movement and sale form part of a single integrated transaction. On the facts found, the buyer placed orders by phone, the goods were transported the same day or next day to West Bengal, the credit memos showed the truck numbers and destination, and declarations in Form C were furnished. These facts supported the inference that the parties intended and were obliged to move the goods outside Bihar as part of the sale agreement.

Conclusion: The sales were inter-State sales and were not liable to tax under the State Act; the question referred was answered in the affirmative in favour of the assessee.

Final Conclusion: The references succeeded for the assessee because the sales were held to be part of inter-State trade or commerce and outside the State taxing net.

Ratio Decidendi: A sale is inter-State when the movement of goods to another State is an integral part of the bargain, showing the requisite common intention and obligation to transport as part of one connected transaction.

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