Inter-State sale in transit is taxable where prescribed exemption forms were obtainable and statutory conditions were unmet.

A subsequent inter-State sale effected by transfer of railway receipts during movement of goods is treated as a sale in transit under section 3(b) of the Central Sales Tax Act, 1956. The exemption under section 6(2) is unavailable unless the prescribed declarations and certificates are satisfied, and tax on such a sale may be levied in the State from which the relevant form could have been obtained. Prior payment of Central sales tax in another State does not prevent levy in Rajasthan. Section 15 does not bar Central sales tax on declared goods where the levy remains within the statutory rate restriction.

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Issues: (i) Whether the turnover from sales of coal, effected by transfer of railway receipts during movement from Bihar to Rajasthan, was liable to Central sales tax in Rajasthan even though Central sales tax had already been paid in Bihar; (ii) whether section 15 of the Central Sales Tax Act, 1956 applied to the transactions involving declared goods.

Issue (i): Whether the turnover from sales of coal, effected by transfer of railway receipts during movement from Bihar to Rajasthan, was liable to Central sales tax in Rajasthan even though Central sales tax had already been paid in Bihar.

Analysis: The sales were effected by transfer of documents of title while the goods were in movement from one State to another and therefore fell within section 3(b) of the Central Sales Tax Act, 1956. The exemption under section 6(2) was unavailable because the conditions in the proviso were not satisfied, including the requirement of the prescribed declarations and certificates. Under the amended section 9(1), the tax on a subsequent inter-State sale could be levied and collected in the State from which the dealer obtained or could have obtained the prescribed form, and Rajasthan was the State in which the relevant declaration could have been obtained.

Conclusion: The turnover was liable to Central sales tax in Rajasthan, and prior payment of Central sales tax in Bihar did not bar such levy.

Issue (ii): Whether section 15 of the Central Sales Tax Act, 1956 applied to the transactions involving declared goods.

Analysis: Section 15 imposes restrictions on State taxation of declared goods, but it does not bar levy and collection of Central sales tax under the Central statute. The only relevant limitation for declared goods under the Act was the rate cap under section 8(2), and the total Central sales tax levied did not exceed that limit. The section therefore did not afford the assessee any exemption from Central sales tax liability.

Conclusion: Section 15 was not applicable to defeat the levy of Central sales tax in the present case.

Final Conclusion: The revision succeeded, the assessee's challenge failed, and the assessments restoring the levy of Central sales tax were upheld.

Ratio Decidendi: A subsequent inter-State sale effected by transfer of documents of title during movement is taxable in the State from which the prescribed form could have been obtained if the statutory conditions for exemption under section 6(2) are not met, and section 15 does not bar levy of Central sales tax on declared goods where the levy remains within the statutory rate restriction.

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