Inter-State sale requires contractual movement of goods; post-sale transport alone does not change an intra-State sale.

A sale is treated as inter-State only where the movement of goods from one State to another is occasioned by the contract of sale, whether by express or implied stipulation or as an incident of that contract. Mere post-sale movement of goods outside the State, after completion of an intra-State sale, is insufficient. On the facts stated, no contractual nexus was shown between the auction sale of timber and its later movement outside the State, so the sale remained intra-State and not inter-State under the Central Sales Tax Act.

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Issues: Whether the sale of timber to non-resident buyers, resulting in movement of goods outside the State, was an intra-State sale or an inter-State sale under the Central Sales Tax Act.

Analysis: A sale becomes an inter-State sale only when the movement of goods from one State to another is occasioned by the contract of sale, whether by an express or implied covenant, or as an incident of the contract. Mere movement of goods outside the State after completion of the sale within the State is not sufficient. On the facts found, no conceivable link was established between the auction sale and the subsequent movement of timber outside the State, and the movement was not shown to be in pursuance of any contractual stipulation or incident of the sale.

Conclusion: The sale was correctly treated as an intra-State sale and not an inter-State sale. The question referred was answered against the assessee and in favour of the Revenue.

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