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of <h1>Inter-State Sales: Goods Transfer to Branches Not Taxable</h1> The High Court affirmed the Tribunal's decision that the transfer of goods to branches outside U.P. did not constitute inter-State sales under the Central ... - Issues:Interpretation of inter-State sales under Central Sales Tax Act, 1956 based on the movement of goods in pursuance of a contract of sale.Analysis:The case involved a revision petition under section 11 of the U.P. Sales Tax Act, challenging an order passed by the Sales Tax Tribunal regarding the treatment of goods despatched to branches outside U.P. The dispute centered around whether the transfer of stock to branches constituted inter-State sales liable to Central sales tax or were merely stock transfers not subject to tax.The dealer contended that the goods despatched to branches were not in pursuance of any contract of sale, thus not falling under the definition of inter-State sales as per section 3(a) of the Central Sales Tax Act. The Revenue argued that the movement of goods to branches constituted inter-State sales, relying on precedents like English Electric Company of India Ltd. v. Deputy Commercial Tax Officer and Tata Engineering and Locomotive Co. Ltd. v. Assistant Commissioner of Commercial Taxes.The Tribunal upheld the view that the despatch of goods to branches did not result in inter-State sales, based on findings that the movement was not in pursuance of purchases by customers outside U.P. The Tribunal's decision aligned with principles established in previous Supreme Court judgments like Kelvinator of India Ltd. v. State of Haryana and Sahney Steel and Press works Ltd. v. Commercial Tax Officer, emphasizing the necessity of goods actually moving from one State to another in pursuance of a contract of sale for an inter-State sale to occur.The High Court, after considering the facts and legal precedents, affirmed the Tribunal's conclusion that no inter-State sales arose from the dealer's despatch of goods to branches outside U.P. The Court declined to interfere with the Tribunal's findings of fact, emphasizing that the movement of goods was not in pursuance of purchases by customers outside U.P., thus not meeting the criteria for inter-State sales as per the Central Sales Tax Act. Consequently, the revision petition was dismissed, with no order as to costs.
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