Intra-State coal sale not subject to CST where inter-State movement arose from purchaser's later resale; VAT applied instead.

In an e-auction sale of coal completed within Jharkhand, the original transaction was an intra-State sale because the later movement of goods to Uttarakhand arose only from the purchaser's subsequent resale. Section 3 of the Central Sales Tax Act, 1956 applies only where the sale itself occasions inter-State movement, so CST could not be levied on the first sale. The correct levy on that transaction was VAT under the Jharkhand Value Added Tax Act, 2005, and the tax invoice had to be corrected accordingly.

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Issues: Whether, in an e-auction sale of coal between parties situated within Jharkhand, the invoice could validly levy Central Sales Tax instead of Value Added Tax and whether the tax invoice required correction accordingly.

Analysis: The sale between the petitioner and the coal company was completed within Jharkhand, and the movement of coal to another State occurred only because of a subsequent sale by the petitioner to a buyer in Uttarakhand. Section 3 of the Central Sales Tax Act, 1956 applies only where a sale itself occasions movement of goods from one State to another. On the admitted facts, the first sale was an intra-State sale, and the later inter-State movement was independent of that transaction. The Court also noted that the seller was not concerned with the petitioner's onward sale, while VAT under the Jharkhand Value Added Tax Act, 2005 was the correct levy on the first sale.

Conclusion: CST could not be levied on the first sale, and the invoice had to be corrected to reflect VAT instead.

Ratio Decidendi: Where goods are sold within a State and their inter-State movement arises only from a subsequent resale by the purchaser, the original sale does not fall within the scope of Section 3 of the Central Sales Tax Act, 1956 and is taxable as an intra-State sale under the local VAT law.

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