Inter-State sale excluded local sales tax assessment where goods moved under prior contract and no dealer business in the State was shown.

Goods moved into Orissa under a prior contract were treated as an inter-State sale, so section 12(5) of the Orissa Sales Tax Act did not apply. The court held that tax jurisdiction lay with the place where the assessee's business was situated, and the local assessment could not stand on those facts. It also found no material to show that the assessee carried on business as a dealer purchasing and selling goods in Orissa. The assessment was therefore unsustainable and set aside in favour of the assessee, consistent with the prior year's appellate view.

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Issues: Whether section 12(5) of the Orissa Sales Tax Act applied to the transaction and whether the assessment made on the assessee could be sustained.

Analysis: The materials showed that the goods were moved into Orissa through other States pursuant to a prior contract. On those facts, the sale was one in the course of inter-State trade and commerce, attracting tax jurisdiction at the place where the assessee's business was situated, not under the local assessment invoked. There was also no material to treat the assessee as a dealer carrying on business of purchasing and selling in Orissa. The earlier appellate decision for the preceding year supported the same view.

Conclusion: Section 12(5) of the Orissa Sales Tax Act was inapplicable, and the assessment was unsustainable and set aside in favour of the assessee.

Ratio Decidendi: Where goods are moved into a State pursuant to a prior contract and the transaction is an inter-State sale, local sales tax assessment cannot be sustained in the absence of material showing that the assessee carries on business as a dealer in that State.

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