Inter-State sale test turns on movement of goods under the contract of sale, not the passing of title.

Goods directly despatched from the head office to buyers outside the State, and delivered without being unloaded at the depots, were correctly treated as inter-State sales because the decisive test is whether the contract of sale occasions movement of goods across State borders, not where title passes. The High Court accepted the Tribunal's factual findings that the goods moved directly to purchasers and that those findings were not perverse. It also affirmed that supported factual findings of this kind do not ordinarily raise a question of law. The reference was answered against the assessee.

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Issues: Whether the disputed transactions constituted inter-State sales liable to tax, on the footing that the goods were directly despatched from the head office to buyers outside the State or were delivered directly to buyers without being unloaded at the depots.

Analysis: A sale falls within inter-State trade when the movement of goods from one State to another is occasioned by the contract of sale or is an incident of that contract. The decisive test is not where property in the goods passes, but whether the sale occasions the movement of goods across State borders. On the facts found, the goods were directly despatched to the buyers, were not unloaded at the depots in the relevant cases, and were delivered directly to the purchasers. Those findings were not shown to be perverse. The Tribunal also relied on the settled principle that such factual findings do not, by themselves, raise a question of law when supported by evidence.

Conclusion: The transactions were rightly treated as inter-State sales, and the reference was correctly answered against the assessee.

Ratio Decidendi: A sale is an inter-State sale where the movement of goods from one State to another is the direct result of, or an incident of, the contract of sale, and supported findings of fact on that question do not ordinarily give rise to a question of law.

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