Inter-State sale under CST arises only on completed transfer of title during transit, not a mere agreement to sell.

Inter-State sale taxation under section 3(b) of the Central Sales Tax Act, 1956 applies only where a completed sale is effected by transfer of documents of title while the goods are in movement from one State to another. A mere endorsement of railway receipts during transit is insufficient if property in the goods has not already passed under a sale. On the facts, the purchasers could inspect and reject the goods and pay only after approval; title passed only after delivery at destination, inspection, and acceptance. The transactions were therefore agreements to sell or local sales, not inter-State sales, and were taxable under State sales tax law.

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Issues: Whether the disputed transactions were inter-State sales falling within section 3(b) of the Central Sales Tax Act, 1956, or only agreements to sell/local sales taxable under the State sales tax laws.

Analysis: Clause (b) of section 3 applies only when there is a completed sale effected by transfer of documents of title during the movement of goods from one State to another. A mere endorsement of railway receipts during transit is insufficient unless the property in the goods has already passed as part of a sale. On the facts found, the purchasers were entitled to inspect the goods, reject them if not approved, and pay only after approval. The Tribunal's finding was that title passed only after delivery at destination, inspection, and acceptance, so at the time of endorsement there was only an agreement to sell and not a sale.

Conclusion: The transactions did not constitute inter-State sales under section 3(b) of the Central Sales Tax Act, 1956, and the question was rightly answered in favour of the assessee.

Ratio Decidendi: For the purpose of section 3(b) of the Central Sales Tax Act, 1956, inter-State sale taxation arises only on a completed sale effected by transfer of documents of title during movement of the goods; a mere agreement to sell does not attract the provision.

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