Stock transfer versus inter-State sale: revisional interference failed where the Revenue did not prove a contract of sale.

Despatches were treated as a stock transfer under section 6A of the Central Sales Tax Act, 1956 because the assessee produced covering letters, Form XX, sale patti, despatch statements and running account details showing branch movement of goods, while the Revenue did not establish a contract of sale. The Court held that the revisional authority could not upset the appellate finding of stock transfer by relying on statements and materials not forming the basis of the original assessment or appellate determination. The writ petition was allowed and the revisional order was set aside.

---

---

Issues: Whether the despatch of goods by the assessee was a stock transfer exempt under section 6A of the Central Sales Tax Act, 1956, or an inter-State sale liable to tax.

Analysis: For determining the nature of the transaction, the Court noted two relevant considerations: whether the movement of goods from one State to another was occasioned by the assessee, for which the burden lay on the assessee, and whether there was a contract of sale, for which the burden lay on the Revenue. The assessee had produced covering letters, Form XX, sale patti, later despatch statements, and running account details. The Appellate Assistant Commissioner accepted these materials and found the transaction to be a stock transfer. The Joint Commissioner, in revision under section 31 of the Central Sales Tax Act, 1956, relied on statements said to have been made by the assessee without those materials having formed the basis of the original assessment or appellate decision, and the Court found that approach unsustainable.

Conclusion: The transaction was a stock transfer and not an inter-State sale. The assessee was entitled to succeed.

Final Conclusion: The writ petition was allowed, and the revisional order was set aside.

Ratio Decidendi: In a dispute whether despatches are stock transfers or inter-State sales, the assessee must show the movement of goods, while the Revenue must establish a contract of sale; a revisional authority cannot disturb a factual finding of stock transfer by relying on materials not forming the basis of the appellate determination.

---