Stock transfer in works contract execution was treated as non-taxable inter-State movement, not an Andhra Pradesh sale.

Goods sent to a branch for use in executing a pipeline works contract in Maharashtra were treated as a stock transfer under section 6-A of the Central Sales Tax Act, 1956, because the contract required execution of the work as a whole rather than a separate supply of pipes. Payment was linked to measured work, and the goods became part of the immovable work by accretion to the earth. On those facts, the movement of goods was not an intra-State sale in Andhra Pradesh, and no taxable turnover arose in the State.

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Issues: Whether the transfer of goods to the branch amounted only to a stock transfer under section 6-A of the Central Sales Tax Act, 1956 and not a taxable sale in Andhra Pradesh, in the context of execution of a works contract.

Analysis: The goods were sent to the branch for use in execution of a pipe line works contract in Maharashtra. The contract contemplated execution of the work as a whole and not a mere supply of pipes. Payment was to be made on measured work, and the goods became part of the immovable work by accretion to the earth. On these facts, the transaction was treated as a stock transfer and not an intra-State sale in Andhra Pradesh, and the turnover was held not taxable in the State.

Conclusion: The transfer fell within section 6-A of the Central Sales Tax Act, 1956 as a stock transfer, and no taxable turnover arose in Andhra Pradesh.

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