Inter-State sale principle: movement of goods pursuant to the sale contract prevails over agency labels and consignment invoicing.

Transactions that occasion movement of goods from one State to another are inter-State sales under the Central Sales Tax Act when the dispatch is directly referable to the buyer's order and sale contract. The existence of an agency arrangement, retention of title until delivery, or consignment-style invoicing does not change the character of the transaction where the movement of goods is in pursuance of the contract. On that basis, the turnover was held to fall within inter-State sale treatment and was not liable to Bihar sales tax.

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Issues: Whether the disputed transactions were inter-State sales falling within section 3(i)(a) of the Central Sales Tax Act, 1956, or intra-State sales exigible to Bihar sales tax.

Analysis: The transactions were held to involve a direct nexus between the buyer's order, the despatch of goods from the manufacturing States, and the movement of the goods to the buyer in satisfaction of that contract. The fact that the agency arrangement stated that the goods remained the manufacturer's property until delivery, or that the invoices described the despatch as on consignment basis, did not alter the character of the movement where the dispatch itself was in pursuance of the sale contract. The controlling principle applied was that a sale occasions inter-State movement even if property passes later and even if an intermediary is involved, provided the movement is the result of the contract of sale.

Conclusion: The transactions were inter-State sales under section 3(i)(a) of the Central Sales Tax Act, 1956, and the assessee was not liable to Bihar sales tax on that turnover.

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