Inter-State sale characterization upheld where excavator movement beyond Karnataka followed the contract despite finance and hire-purchase routing.

Sales of hydraulic excavators were treated as inter-State sales because the evidence showed movement of the goods from Karnataka to destinations outside the State in pursuance of the contract of sale. Delivery documents, transporter records, finance-company ordering, and the link with hire-purchase arrangements supported the conclusion, while small advances and invoicing in the financiers' names did not change the true character of the transactions. The levy under the Central Sales Tax Act was therefore justified, and the concurrent findings that the turnover was exigible to inter-State sales tax were left undisturbed.

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Issues: Whether the disputed sales of hydraulic excavators were local sales or inter-State sales liable to tax under the Central Sales Tax Act.

Analysis: The material on record showed that the goods were ordered through finance companies, delivery documents and transporter records indicated movement of the equipment beyond the State, and the transactions were linked to hire-purchase arrangements with customers outside Karnataka. The receipt of small advances and invoicing in the name of financiers did not alter the true character of the transactions. The decisive factor was that the movement of goods took place in pursuance of the contract of sale and the evidence established that the sales occasioned movement from Karnataka to destinations outside the State.

Conclusion: The disputed transactions were inter-State sales and the levy under the Central Sales Tax Act was justified.

Final Conclusion: The revision failed as no ground was made out to interfere with the concurrent findings that the turnover in dispute was exigible to inter-State sales tax.

Ratio Decidendi: A sale is inter-State in character when the movement of goods from one State to another is in pursuance of, and occasioned by, the contract of sale, even if the transaction is routed through finance or hire-purchase arrangements.

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