Inter-State sale and finality of F forms bar reassessment absent fraud, suppression, or jurisdictional defect.

Movements of goods from Karnataka to Maharashtra were treated as inter-State sales where the goods were manufactured against prior customer orders, earmarked for identified buyers, and routed through a branch only as a conduit for delivery; the intervention of the branch did not alter the character of the transaction. Acceptance of F forms after due verification under section 6A(2) created a conclusive statutory determination, so the concluded assessment could not be reopened on a mere reappraisal of the same material. Reassessment was permissible only on exceptional grounds such as fraud, collusion, misrepresentation, wilful suppression of material facts, or jurisdictional defect, none of which was shown. The reassessment demand was therefore set aside.

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Issues: (i) Whether the disputed movements of goods from Karnataka to Maharashtra were inter-State sales within the meaning of section 3(a) of the Central Sales Tax Act, 1956 or mere stock transfers; and (ii) whether reassessment could be reopened after the original assessment accepted the F forms under section 6A(2) of the Central Sales Tax Act, 1956.

Issue (i): Whether the disputed movements of goods from Karnataka to Maharashtra were inter-State sales within the meaning of section 3(a) of the Central Sales Tax Act, 1956 or mere stock transfers.

Analysis: The governing test under section 3(a) is whether the movement of goods from one State to another is occasioned by, or is a necessary incident of, a contract of sale. Where goods are dispatched to a branch only as a conduit for delivery to identified customers under prior orders, the intervention of the branch does not change the character of the transaction. On the facts, the materials relied on by the sales tax authorities showed that the goods were manufactured against prior customer orders, earmarked for particular buyers, and moved from Karnataka to Maharashtra in direct fulfilment of those orders.

Conclusion: The transactions were inter-State sales and not genuine stock transfers.

Issue (ii): Whether reassessment could be reopened after the original assessment accepted the F forms under section 6A(2) of the Central Sales Tax Act, 1956.

Analysis: Once the assessing authority accepts the F forms after due verification and records satisfaction under section 6A(2), the statutory deeming fiction and conclusive presumption operate, and the concluded assessment cannot be reopened on a mere reappraisal of the same material. Reopening is permissible only on exceptional grounds such as fraud, collusion, misrepresentation, wilful suppression of material facts, or a jurisdictional defect in the original order. No such exceptional ground was established here.

Conclusion: The reassessment proceedings were without jurisdiction and could not be sustained.

Final Conclusion: Although the transactions were held on merits to be inter-State sales, the assessee succeeded because the concluded assessments could not lawfully be reopened after acceptance of the F forms under section 6A(2). The demand raised in reassessment was therefore set aside.

Ratio Decidendi: Acceptance of F forms under section 6A(2) after due verification creates a conclusive statutory determination that bars reassessment, except on limited grounds such as fraud, wilful suppression, collusion, misrepresentation, or jurisdictional invalidity.

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