Inter-State sale requires movement caused by a sale or contract; Form F can support stock transfer where no prior sale is proved.

An inter-State sale under the Central Sales Tax Act arises only when the sale or agreement for sale occasions movement of goods from one State to another; a mere standing arrangement to supply goods as and when ordered does not satisfy that test. On the facts described, the tender and acceptance did not create a prior contract causing movement, so the turnover was treated as arising only after branch-wise orders and delivery. Section 6-A and accepted Form F declarations then supported the position that the movement was by stock transfer, not sale, and the withdrawal of exemption was not justified.

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Issues: (i) Whether the disputed turnover related to inter-State sales under the Central Sales Tax Act, 1956; and (ii) what was the effect of the presumption under section 6-A when declarations in Form F were filed and accepted.

Issue (i): Whether the disputed turnover related to inter-State sales under the Central Sales Tax Act, 1956.

Analysis: A sale is inter-State only when the sale or agreement for sale occasions the movement of goods from one State to another. The terms of the tender and acceptance showed no concluded contract or agreement to sell the goods in advance; they merely created a standing arrangement to supply paints as and when orders were placed by the Shipping Corporation of India. The movement of goods from the head office to branches was not caused by any prior sale. The actual sale commenced only after branch-wise orders were placed and goods were delivered, so the statutory test for inter-State sale was not satisfied.

Conclusion: The disputed turnover did not constitute inter-State sales and the assessee succeeded on this issue.

Issue (ii): What was the effect of the presumption under section 6-A when declarations in Form F were filed and accepted.

Analysis: Section 6-A places the burden on the dealer to prove that movement of goods was otherwise than by reason of sale, and Form F is the prescribed mode of discharge. However, where the revenue establishes a positive case of inter-State sale on the basis of a contract causing movement, the Form F declaration cannot prevail. In the present case, since no inter-State sale was proved at all, the accepted Form F declarations reinforced the conclusion that the movement was by stock transfer and not by sale.

Conclusion: The Form F declarations supported the assessee's claim of stock transfer and the withdrawal of exemption was not justified.

Final Conclusion: The turnover was held to be outside the scope of inter-State sale taxation, and the revisional interference with the assessment was unwarranted.

Ratio Decidendi: A transaction is an inter-State sale only if the sale or agreement for sale itself occasions the movement of goods from one State to another; a mere standing offer to supply goods as and when ordered does not amount to a sale or agreement to sell for that purpose.

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