Inter-State sale test turns on actual delivery and contractual movement; sugarcane bought in-state and later moved across border was taxable locally.

Where the purchaser took delivery of sugarcane within Tamil Nadu and then transported it to Kerala as its own goods, the movement across the border was not occasioned by the contract of sale. The contract form was not conclusive because the actual course of dealing showed delivery in Coimbatore district and no material displaced the transport entries naming the same party as consignor and consignee. The stipulated factory delivery in Kerala was treated as departed from by the parties. The transactions were therefore local sales within Tamil Nadu and taxable under the Tamil Nadu General Sales Tax Act, not inter-State sales.

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Issues: Whether the sugarcane transactions were local sales within Tamil Nadu and taxable under the Tamil Nadu General Sales Tax Act, 1959, or inter-State sales outside the State's taxing power.

Analysis: The contract form was not treated as conclusive where the actual course of dealing showed that the purchaser's officers inspected the crop, took delivery in the fields in Coimbatore district, and then transported the cane to Kerala. The form used for transport showed the petitioner as both consignor and consignee, and there was no convincing material to displace those entries. On those facts, the contractual stipulation for delivery at the factory in Kerala was found to have been departed from by the parties. The movement of goods from Tamil Nadu to Kerala was therefore not one occasioned by the contract as an incident of sale, but a movement by the purchaser after it had acquired the goods in Tamil Nadu. The cited Supreme Court decisions on inter-State sales were held inapplicable because, in those cases, the contract itself required cross-border movement for performance and price fixation.

Conclusion: The transactions were local sales in Tamil Nadu and were rightly taxed under the State sales tax law; they were not inter-State sales.

Final Conclusion: The revision petition failed, and the assessment on the disputed sugarcane transactions was sustained.

Ratio Decidendi: Where the purchaser takes delivery of goods within the State and subsequently moves them across the State border as its own goods, the movement is not one occasioned by the contract of sale and the transaction is not an inter-State sale.

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