Declaration for resale in Orissa protects turnover exclusion, but branch transfers remain taxable under the proviso.

A declaration for resale in Orissa is not breached merely because the subsequent resale is treated as taxable under another statute by a supervening legal consequence, so the turnover exclusion remains unavailable to the revenue on that ground. By contrast, branch transfers stand on a different footing because the goods continue to belong to the assessee after movement outside Orissa, and the proviso to section 5 applies; the purchase price relatable to such branch transfers is includible in gross turnover. The stated principle is that statutory treatment of an actual resale does not defeat the declaration, but diversion by branch transfer does.

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Issues: Whether goods purchased on declarations for resale in Orissa could be added to taxable turnover when the subsequent sales were claimed to be inter-State sales or, in the case of branch transfers, moved out of the State.

Analysis: Branch transfers stood on a different footing because the goods, on the assessee's own case, were not sold inter-State but continued to belong to it after movement to the branch outside Orissa; the proviso to section 5 of the Orissa Sales Tax Act therefore applied and the purchase price relatable to branch transfer was includible in the gross turnover. In contrast, where the alleged inter-State sales had in fact taken place within Orissa but, by reason of the Central law, were treated as the first sales under that Act, the earlier decision in Joharimal Gajananda governed the field. The assessee's declaration was for resale in Orissa, and if that resale was in fact effected, a supervening statutory regime making the transaction taxable under another law did not amount to a breach of the declaration so as to attract the proviso to section 5(2)(A)(a)(ii).

Conclusion: The proviso to section 5(2)(A)(a)(ii) of the Orissa Sales Tax Act applied to branch transfers, but it did not apply to sales which, though claimed as inter-State, were in fact intra-State sales deemed to be first sales under the Central Act.

Ratio Decidendi: A declaration given for resale in Orissa is not violated, and the turnover exclusion cannot be denied, merely because the resale is rendered taxable under another statute by a supervening legal consequence; but goods diverted by branch transfer remain outside that protection.

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