Inter-State sales tax treatment controls deduction where goods are brought from outside the State and taxed under the CST Act.

Deduction under section 3F(2)(b)(i) of the U.P. Trade Tax Act cannot be denied merely because Central sales tax was not shown as paid where the goods were brought from outside Uttar Pradesh and were liable to tax under the Central Sales Tax Act. The decisive factor is the inter-State character of the transaction, as shown by the record and counter-affidavit, not proof of actual CST payment. On that basis, the assessee was entitled to be charged at the rate applicable under the Central Sales Tax Act for rori, and the Tribunal's order was modified accordingly.

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Issues: Whether deduction under section 3F(2)(b)(i) of the U.P. Trade Tax Act could be denied merely because Central sales tax had not been shown as paid, when the goods were brought from outside the State and were liable to tax under the Central Sales Tax Act.

Analysis: The assessee claimed deduction for rori on the footing that it had been purchased from outside Uttar Pradesh and was therefore governed by the Central Sales Tax Act. The record and the counter-affidavit showed that the goods were brought from outside the State, and the liability depended on the character of the transaction as one falling under the Central Sales Tax Act. The Court held that actual payment of Central sales tax was not the requirement for denying the deduction where the nature of the transaction established its inter-State character.

Conclusion: The assessee was entitled to be charged at the rate applicable under the Central Sales Tax Act for rori, and the Tribunal's order was modified to that extent in favour of the assessee.

Ratio Decidendi: For deduction under section 3F(2)(b)(i) of the U.P. Trade Tax Act, the decisive factor is whether the goods were brought from outside the State and were taxable under the Central Sales Tax Act, not whether Central sales tax was actually shown as paid.

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