Form-F backed stock transfers cannot be treated as inter-State sales merely because agents resell goods quickly.

Goods moved to agents' godowns in other States were treated as a consignment sale or stock transfer, not an inter-State sale, where the assessee supported its claim with Form-F declarations, sale pattials, invoices and consignment sale notes. Same-day or next-day resale by the agents was held insufficient, by itself, to displace that documentation absent incriminating evidence of advance arrangements or other contrary material. The writ court was also noted to have limited scope to interfere with concurrent factual findings; absent perversity, unsupported conclusions or patent legal error, such findings were left undisturbed.

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Issues: (i) Whether the movement of goods from Tamil Nadu to agents in other States constituted a consignment sale or an inter-State sale liable to tax; (ii) whether the writ court could interfere with the factual findings recorded by the lower authorities on the nature of the transactions.

Issue (i): Whether the movement of goods from Tamil Nadu to agents in other States constituted a consignment sale or an inter-State sale liable to tax.

Analysis: The assessee produced Form-F declarations, sale pattials, invoices issued by the agents, and excise gate pass-cum-consignment sale notes. These materials supported the claim that the goods were first sent to the agents' godowns, taken into stock, and then sold thereafter. Mere sale by the agents on the same day or the next day was held insufficient by itself to convert the transaction into an inter-State sale. In the absence of incriminating material showing advance arrangements, cash movement, or other contrary evidence, the declaration under Form-F could not be rejected on speculation.

Conclusion: The transaction was held to be a consignment sale or stock transfer and not an inter-State sale; the finding was in favour of the assessee.

Issue (ii): Whether the writ court could interfere with the factual findings recorded by the lower authorities on the nature of the transactions.

Analysis: The lower appellate authorities had examined the record and accepted the documentary evidence supporting the assessee's claim. The challenge raised by the Revenue depended on appreciation of facts and evidence. In writ jurisdiction, interference with such concurrent findings is justified only if the findings are perverse, unsupported by material, or vitiated by a patent legal error. No such infirmity was shown.

Conclusion: Interference under Article 226 was declined; the factual findings were left undisturbed, against the Revenue.

Final Conclusion: The Revenue's challenge to the classification of the transactions failed, and the writ petition was dismissed with the concurrent factual findings sustained.

Ratio Decidendi: A transaction supported by Form-F and allied documentary evidence cannot be treated as an inter-State sale merely because the goods were sold by agents on the same day, and concurrent factual findings on such documentary appreciation are not amenable to writ interference absent perversity or patent error.

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