Inter-State sale by movement under pre-existing contracts remains taxable when despatch follows the sale agreement.

Movement of goods from Jaipur to Calcutta under pre-existing contracts was treated as an inter-State sale because the despatches were the direct consequence of the contract of sale and were not independent of the agreements to sell. The factual foundation relied on was that the buyers had sent their own packings to Jaipur and the goods were moved in pursuance of existing contracts. A contrary view treating the Jaipur office and head office as distinct entities could not displace those findings, so the transactions remained liable to sales tax as inter-State sales.

---

---

Issues: Whether the movement of goods from Jaipur to Calcutta pursuant to the existing contracts and the surrounding facts constituted an inter-State sale liable to tax under the sales tax law.

Analysis: The unreversed finding recorded by the Single Member was that the goods were despatched to Calcutta in pursuance of contracts existing before the movement of goods, the buyers had sent their own packings to Jaipur, and the despatches were not independent of the agreements to sell. On that finding, the movement of goods was the direct consequence of the sale transaction and was occasioned by the contract of sale. The Division Bench reversed the conclusion without first displacing the factual foundation supporting it, and treated the Jaipur office and head office as distinct legal entities, which could not sustain a contrary view on the existing findings.

Conclusion: The transactions were inter-State sales and were rightly subjected to tax; the contrary view of the Division Bench could not stand.

---