Inter-State sale under CST hinges on direct nexus between contract and movement of goods; intermediary delivery does not change the result.

Tarpaulins supplied from Bombay through an agent at Surat were held to be inter-State sales under section 3(a) of the Central Sales Tax Act, 1956 because the movement of goods from one State to another was directly connected with, and incidental to, the contracts with buyers in Gujarat. The decisive test was the nexus between the sale contract and the movement of goods, not the place where title passed. As the goods were made to specification, marked for the purchaser, and dispatched for delivery in Gujarat, while the Surat agent acted only as a conduit, the sales fell within section 3(a).

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Issues: Whether the sales of tarpaulins, supplied from Bombay through an agent at Surat to purchasers in Gujarat, were inter-State sales within the meaning of section 3(a) of the Central Sales Tax Act, 1956.

Analysis: A sale falls within section 3(a) when the movement of goods from one State to another is occasioned by, or is incidental to, the contract of sale. The decisive inquiry is the existence of a direct nexus between the contract and the movement of goods, not the place where title passes. On the facts, the contract was directly with the buyer in Gujarat, the goods were manufactured to specification, marked for the purchaser, despatched for delivery in Gujarat, and the Surat agent acted only as a conduit. There was no material to show regular branch transfers or an independent stock movement unrelated to the contract.

Conclusion: The sales were inter-State sales under section 3(a) of the Central Sales Tax Act, 1956, and the question was answered in the affirmative in favour of the Revenue.

Ratio Decidendi: Where the movement of goods from one State to another is in pursuance of and incidental to the contract of sale, and the intermediary merely facilitates delivery, the sale is an inter-State sale under section 3(a) of the Central Sales Tax Act, 1956.

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