Inter-State sale under contract control: forest produce moved under permits was taxable outside Bihar sales tax.

Contracts for khair billets and forest produce requiring movement from Bihar to other States were treated as inter-State sales because the goods' movement was expressly occasioned by the sale agreements and transport permits. Restrictions on transfer of title documents, route control, and use of registered vehicles showed that the movement was integral to the contract, not a later act of the purchaser. The place where property in the goods passed was immaterial; the sale was completed only when the goods reached the destination State and the purchaser obtained effective control and disposal rights. The transactions therefore fell within section 3(a) of the Central Sales Tax Act, 1956 and were not subject to Bihar sales tax.

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Issues: Whether the purchase of khair billets and forest produce from the Bihar forest department, followed by movement of the goods to another State under the contract and transport permits, constituted a sale in the course of inter-State trade and commerce under section 3(a) of the Central Sales Tax Act, 1956, or an intra-State sale liable to Bihar sales tax.

Analysis: The transactions were governed by agreements and transport permits that required the goods to be moved from Bihar to the destination States, prohibited transfer of the delivery order or other title documents, and kept the movement under the seller's control through permits, route restrictions, and registered vehicles. On those facts, the movement of goods was not a later act of the purchaser unrelated to the contract, but was occasioned by and incidental to the contract of sale. The place where property in the goods passed was held to be immaterial; what mattered was that the sale and purchase came to a close only when the goods reached the destination State, where the purchaser obtained effective control and right of disposal. The earlier administrative view treating such transactions as falling under section 3(a) was also consistent with this position.

Conclusion: The transactions were inter-State sales falling within section 3(a) of the Central Sales Tax Act, 1956, and were not liable to Bihar sales tax.

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