Inter-State sales and exemption under commercial tax law defeated local levy on Form 75 transactions.

Commercial tax could not be levied on the twelve Form 75 transactions because the vegetable seed goods were covered by the Schedule I exemption under the Madhya Pradesh Commercial Tax Act, 1994, one form did not relate to the assessee, and the remaining sales were effected directly from Chennai as inter-State trade. As movement commenced outside Madhya Pradesh, Section 79 barred State levy since the sales were not shown to have taken place within the State. Mere issuance of Form 75 from the Bhopal branch was held insufficient to establish a local taxable sale, and the authorities' contrary view was unsupported by the record.

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Issues: Whether commercial tax could be levied in Madhya Pradesh on the transactions covered by the twelve Form 75s, including goods claimed to be exempt and sales said to have been concluded at Chennai in the course of inter-State trade.

Analysis: The transactions relating to vegetable seeds were covered by the exemption for specified goods in Schedule I to Section 15 of the Madhya Pradesh Commercial Tax Act, 1994, and one Form 75 did not pertain to the assessee at all. The remaining transactions were found to be sales effected directly from the head office at Chennai, with movement commencing from outside Madhya Pradesh and, therefore, falling within the scope of inter-State trade under Section 9(2) of the Central Sales Tax Act, 1956. On that basis, Section 79 of the Madhya Pradesh Commercial Tax Act, 1994 barred levy by the State because the sales were not shown to have taken place within Madhya Pradesh. The finding of the authorities that mere issuance of Form 75 from the Bhopal branch established local sales was held to be unsupported by the record and misconceived.

Conclusion: The levy of commercial tax on the twelve Form 75 transactions was unsustainable, and the assessee was entitled to relief.

Ratio Decidendi: Mere issuance of a transport or transfer form from a local branch does not by itself establish a taxable sale within the State; levy depends on proof that the sale actually took place within the taxing State, and inter-State sales effected from outside the State cannot be subjected to local commercial tax where the statute exempts or excludes them.

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