Inter-State sale taxation depends on when property in goods passes; registered-dealer status excluded section 8(2) liability.

Inter-State sale tax liability under the Central Sales Tax Act depended on when the sale was completed for taxation purposes. The goods were sent through bank, and the buyer retired the documents only on 10 April 1985, when property in the goods passed and delivery was obtained. By that date the buyer was already a registered dealer entitled to purchase against C forms, so the transaction was not a sale to an unregistered dealer. Section 8(2) was therefore inapplicable, the revision was rejected, and the assessee succeeded.

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Issues: Whether the inter-State sale was liable to tax under section 8(2) of the Central Sales Tax Act, 1956 as a sale to an unregistered dealer, or under section 8(1) as a sale to a registered dealer when the property in the goods passed.

Analysis: The liability turned on the point of time when the sale was completed for the purpose of taxation. The goods were sent through bank and the buyer retired the documents only on 10 April 1985, after which the property in the goods passed and delivery was obtained. On that date the buyer was already a registered dealer and was entitled to purchase against C forms. Since the taxable sale took place only when the buyer had acquired registration, the sale could not be treated as one to an unregistered dealer.

Conclusion: The revision was rejected and the assessee succeeded; section 8(2) was held inapplicable.

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