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Issues: (i) Whether the dealer's transactions constituted inter-State sales; (ii) Whether Central sales tax could still be denied on the basis of the 1966 notification after its rescission.
Issue (i): Whether the dealer's transactions constituted inter-State sales.
Analysis: The governing test for an inter-State sale is whether the movement of goods from one State to another is pursuant to the sale transaction. On the facts found by the Tribunal and the documents examined, the sale bills and endorsements did not displace the conclusion that the goods moved across State borders as part of the sale.
Conclusion: The transactions were rightly held to be inter-State sales, against the assessee.
Issue (ii): Whether Central sales tax could still be denied on the basis of the 1966 notification after its rescission.
Analysis: A question not raised before the subordinate authorities could not be usefully reframed on reference in the circumstances of the case. In any event, the notification had already been rescinded with retrospective effect, and a later judicial declaration upholding its validity did not revive a notification that had ceased to operate by rescission.
Conclusion: The assessee could not derive any benefit from the rescinded notification, against the assessee.
Final Conclusion: The reference was answered in favour of the revenue and the Tribunal's finding that the dealer's transactions were inter-State sales was sustained.
Ratio Decidendi: Movement of goods from one State to another pursuant to the sale transaction is the decisive test for an inter-State sale, and a rescinded notification is not revived merely because it was later upheld as intra vires.
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