Branch stock transfer, not inter-State sale, where goods are moved for stocking and later sold without a sale contract.

Regular despatch of goods to a branch for stocking and later sale, where the movement is not occasioned by any contract of sale and there is no privity with the ultimate buyer, constitutes a stock transfer and not an inter-State sale. On the facts, ossein sent from the factory to the Cochin branch was held as branch stock and later sold from there to the exporter, so the Tribunal correctly treated the movement as a branch transfer. The High Court found the earlier decision on materially similar facts applicable and sustained the relief granted to the assessee.

---

---

Issues: Whether the movement of ossein from the assessee's factory to its Cochin branch was a stock transfer not liable to tax as an inter-State sale, and whether the Tribunal was right in applying the earlier decision on substantially similar facts.

Analysis: The factual record showed regular despatches from the factory to the Cochin branch as part of the assessee's normal business activity, with goods held there as stock and not earmarked against any particular purchase order. The goods were later sold from the Cochin stock to the exporter. There was no privity of contract between the assessee and the export buyer, and the movement of goods was not occasioned by the subsequent export sale. The Tribunal examined the documents and found the present case materially identical to the earlier decision concerning the same assessee, where such movement had been held to be a branch transfer and not an inter-State sale.

Conclusion: The movement was a stock transfer and not an inter-State sale; the Tribunal correctly applied the earlier precedent, and the revenue's challenge failed.

Final Conclusion: The Tribunal's order granting relief to the assessee was sustained, and the writ petition was dismissed.

Ratio Decidendi: Regular movement of goods to a branch for stocking and later sale, without the movement being occasioned by a contract of sale and without privity of contract with the ultimate buyer, constitutes a stock transfer and not a taxable inter-State sale.

---