Inter-State purchase test and Form III-C(1) presumption require evidence-based scrutiny; Tribunal orders were remitted for fresh adjudication.

A purchase is outside the State's taxing power where movement of goods from one State to another is an integral and inseparable part of the transaction, and the true character of the dealings must be determined transaction by transaction on the evidence. The Tribunal erred by not examining the dealer's documentary material, including account books and statutory forms, and by not recording a clear finding on whether the gur purchases were made for ex-U.P. principals under existing arrangements. Form III-C(1) alone did not attract the conclusive-evidence rule under section 12-A, because the claim was not one under the specific exemption provision to which that presumption applied. The orders were set aside and the matter remitted for fresh adjudication.

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Issues: Whether the purchases of gur were inter-State purchases made on behalf of ex-U.P. principals and therefore not liable to tax under the U.P. Sales Tax Act, 1948; and whether furnishing of Form III-C(1) by itself attracted the conclusive-evidence rule under section 12-A of the U.P. Sales Tax Act, 1948.

Analysis: The Tribunal had not examined the documentary material relied upon by the dealer, including the year-wise list, account books, and 6-R and 9-R forms, and had also failed to record a clear finding on whether the purchases were made pursuant to existing arrangements for ex-U.P. principals. The controlling principle is that a purchase becomes an inter-State purchase only when movement of goods from one State to another is an integral part of the transaction and is inseparably connected with the sale or purchase. Mere delivery-related forms or the fact that tax was charged from the principals does not, by itself, determine the true nature of the transaction. The statutory presumption under section 12-A of the U.P. Sales Tax Act, 1948 was also held inapplicable because the claim was not one under section 3-D of that Act, but a claim that the transactions were outside the State's taxing power as inter-State purchases.

Conclusion: The assessment orders could not be sustained without a transaction-wise examination of the evidence and specific findings on the character of the purchases. The matter required reconsideration by the Tribunal.

Final Conclusion: The revisions succeeded to the extent that the Tribunal's orders were set aside and the matters were sent back for fresh adjudication on the evidence and the correct legal test.

Ratio Decidendi: A purchase is not taxable under the State sales tax law if the movement of goods is an integral and inseparable part of an inter-State transaction, and Form III-C(1) does not by itself create a conclusive presumption where the claim is not one under the specific exemption provision to which the statutory presumption applies.

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