Inter-State sale requires movement under the sale contract; ex-godown delivery and buyer-arranged transport supported local sale treatment.

Goods sold ex-godown to out-of-State buyers were treated as local sales because the evidence showed delivery and purchase occurred within the State, and the subsequent transport was arranged by the buyers at their own cost and responsibility. The assessees' admissions before the assessing authority, together with sale bills showing no transport charges borne by the sellers, supported the conclusion that the movement of goods was not pursuant to the contract of sale. A claim of coercion and misrepresentation in obtaining those statements was rejected as an afterthought. The governing principle is that a transaction is inter-State only when the movement of goods outside the State is referable to the sale contract; on these facts, exemption failed.

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Issues: Whether the disputed turnover represented inter-State sales eligible for exemption under the Tamil Nadu General Sales Tax Act.

Analysis: The turnover was claimed to be exempt on the footing that the goods moved outside the State in pursuance of contracts of sale, but the materials showed otherwise. The assessees had earlier filed writ petitions challenging the assessment, and the High Court had expressed a view on the merits that there was nothing to show an inter-State character. No fresh material was produced thereafter to dislodge that conclusion. The assessees had also signed statements before the assessing authority admitting that out-of-State buyers came to the place of business, purchased the goods, and transported them on their own responsibility and cost. The plea that those statements were obtained under coercion and misrepresentation was treated as an afterthought and was not accepted. The sale bills showed ex-godown prices, no transport charges were borne by the sellers, and the surrounding circumstances indicated completion of the sale within the State. On these facts, the case fell within the principle that where the buyer takes delivery within the State and the subsequent movement is not referable to the contract of sale, the transaction is not an inter-State sale.

Conclusion: The disputed transactions were held to be local sales and not inter-State sales, and the claim for exemption failed.

Ratio Decidendi: A sale is inter-State only when the movement of goods outside the State is pursuant to or incidental to the contract of sale, and admissions coupled with ex-godown delivery and buyer-arranged transport can establish an intra-State sale even without a written contract.

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