Transit sale characterization barred intra-State assessment; exemption issues had to be examined under the Central Sales Tax Act.

Goods moved from outside the State under a contract with the outside supplier constituted an inter-State sale under the Central Sales Tax Act, and the subsequent transfer of documents of title during transit to the lessee fell within section 3(b) as a transit sale. The question whether exemption under section 6(2) was available had to be examined under the Central Sales Tax Act itself, not under the Orissa Sales Tax Act. Production of form XXXII did not change the character of the transaction or confer power to assess it as an intra-State sale. The assessment of the disputed turnover under section 12(4) of the Orissa Sales Tax Act was therefore without jurisdiction.

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Issues: Whether the turnover arising from goods purchased from outside the State and subsequently sold in transit to the lessee could be assessed under section 12(4) of the Orissa Sales Tax Act, 1947, and whether the transaction was liable to be treated as an intra-State sale.

Analysis: The goods were moved from outside the State pursuant to the contract with the outside supplier and the initial transaction was an inter-State sale within the meaning of section 2(a) of the Central Sales Tax Act, 1956. The transfer of the documents of title during transit in favour of the lessee brought the subsequent sale within section 3(b) of the Central Sales Tax Act, 1956. The availability or otherwise of exemption under section 6(2) of the Central Sales Tax Act, 1956 was a matter for assessment under that Act and not for assessment of the same turnover under the Orissa Sales Tax Act, 1947. Production of form XXXII did not alter the character of the transaction or confer jurisdiction on the assessing authority to tax it as an intra-State sale.

Conclusion: The assessment of the disputed turnover under section 12(4) of the Orissa Sales Tax Act, 1947 was without jurisdiction and could not be sustained; the transaction remained an inter-State or transit sale, with any further question of exemption to be examined under the Central Sales Tax Act, 1956.

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