Inter-State sale test under sales tax law upheld where goods moved pursuant to the sale contract and supporting documents.

Sales are inter-State under section 3(a) of the Central Sales Tax Act where movement of goods from one State to another is occasioned by the contract of sale, even if the contract does not expressly say so. The place where property passes is irrelevant if the movement is the result of the sale transaction. On the documentary record, including indent memos, invoices, excise gate passes, shipping memos and form C declarations, the goods were ordered from Rajasthan, dispatched from Gujarat and moved pursuant to the sale arrangement; the Revenue did not rebut this. The Tribunal's finding that the transactions were inter-State sales, not local sales under the Gujarat Sales Tax Act, was upheld in favour of the assessee.

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Issues: Whether the sales of goods made to out-of-State purchasers were inter-State sales under section 3(a) of the Central Sales Tax Act, 1956, or local sales under the Gujarat Sales Tax Act, 1969.

Analysis: Section 3(a) applies where the movement of goods from one State to another is occasioned by the contract of sale, whether the covenant is express or implied. The place where property passes is immaterial if the movement is the result of the sale transaction. The documentary record, including indent memos, invoices, excise gate passes, shipping memos, and form C declarations, showed that the goods were ordered by Rajasthan purchasers, despatched in the relevant truck, and moved from Gujarat to Rajasthan pursuant to the sale arrangement. The Revenue did not rebut this material or establish that the movement was independent of the contract. The statutory scheme of section 8 and the declaration forms also supported the genuineness of the inter-State transactions.

Conclusion: The sales were inter-State sales under section 3(a) and not local sales; the finding of the Tribunal was upheld in favour of the assessee.

Ratio Decidendi: A sale is inter-State where the movement of goods from one State to another is caused by, or is an incident of, the contract of sale, and such movement may be proved from the surrounding documents and conduct even if the contract is not expressly worded to that effect.

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