Inter-State sale requires proof of contract and inter-State movement; outside-State origin and transport charges alone are insufficient.

Inter-State sale must be affirmatively proved by evidence of a contract and movement of goods in the course of inter-State trade or commerce; mere outside-State origin, transport charges, transfer of invoices, or payment arrangements are insufficient. The Tribunal treated the absence of evidence on the date of despatch and quantity of cotton despatched as conclusive, and no material showed an independent inter-State sale contract. The Madras HC held that the sales were not proved to be inter-State sales, so the Tamil Nadu General Sales Tax Act, 1959 continued to apply and no remand was warranted.

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Issues: Whether the sales in question were inter-State sales so as to exclude application of the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The Tribunal's finding that there was no evidence of the date of despatch or the quantity of cotton despatched from Cochin to Thiruppur was treated as conclusive. The mere movement of goods from outside the State, payment of transport charges, transfer of invoices, or the existence of a payment arrangement did not by itself establish a sale in the course of inter-State trade or commerce. In the absence of material showing an independent contract of sale taking place in the course of inter-State trade, no remand was warranted.

Conclusion: The sales were not proved to be inter-State sales, and the Tamil Nadu General Sales Tax Act, 1959 continued to apply.

Final Conclusion: The revisions failed on merits and were dismissed.

Ratio Decidendi: An inter-State sale must be affirmatively proved by evidence of the contract and movement of goods in the course of inter-State trade or commerce; mere outside-State origin, transport charges, or invoice transfer is insufficient.

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