In-transit inter-State sale requires transfer of title documents; absent railway receipt endorsement, transaction was intra-State.

Sales of cement were treated as intra-State purchases within Uttar Pradesh rather than inter-State sales in transit under section 3(b) of the Central Sales Tax Act, 1956. The Tribunal accepted evidence that the selling dealers raised bills, charged and deposited tax, and delivered the goods at a railway station in Uttar Pradesh against their own form XXXI. The Revenue failed to prove endorsement of the railway receipts in favour of the assessee during movement or any transfer of documents of title in transit. On those findings of fact, the turnover was correctly treated as non-taxable in the assessee's hands under the U.P. Sales Tax Act, 1948.

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Issues: Whether the sales of cement were inter-State sales in transit attracting section 3(b) of the Central Sales Tax Act, 1956, or purchases and sales within Uttar Pradesh not liable to tax under the U.P. Sales Tax Act, 1948.

Analysis: The evidence accepted by the Tribunal showed that the two registered selling dealers raised bills, charged and deposited tax, and the goods were delivered at the railway station in Uttar Pradesh against their own form XXXI. The Revenue failed to prove that the railway receipts were endorsed in favour of the assessee during movement of the goods or that the assessee had imported the goods as the first purchaser. The Tribunal's findings that there was no transfer of documents of title in transit and that the assessee did not retire the railway receipts were findings of fact based on the material on record, and no infirmity was shown in those findings.

Conclusion: The sales were correctly treated as purchases within Uttar Pradesh and not as inter-State sales in transit; the turnover was held non-taxable in the hands of the assessee.

Ratio Decidendi: Where the Revenue fails to establish endorsement of railway receipts or transfer of documents of title during movement of goods, the transaction does not fall within section 3(b) of the Central Sales Tax Act, 1956 and may be treated as an intra-State purchase or sale, as found on the facts.

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