Stock transfer vs inter-State sale: absence of a pre-existing contract meant consignment sales were not treated as inter-State sales.

Movement of goods from Aligarh to Delhi was treated as stock transfer to a consignment agent rather than an inter-State sale. The decisive test was whether there was material showing a pre-existing contract of sale and movement of goods in pursuance of that contract. On the Tribunal's findings, the goods were not sent directly to buyers, no payment was received at Aligarh, and the sales were made only by the consignment agent after receipt at Delhi. Mere same-day sale did not establish the required nexus between movement and sale, so the revision was rejected and the stock-transfer finding was sustained.

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Issues: Whether the movement of goods from Aligarh to Delhi was a stock transfer to a consignment agent or an inter-State sale effected in pursuance of a prior contract of sale.

Analysis: The dealer's case was that the goods were sent to a commission/consignment agent at Delhi and were sold there after arrival. The revenue relied mainly on the fact that the goods were sold on the same day they were received. The decisive test was whether there was material to show a pre-existing contract with the buyers and a movement of goods in pursuance of that contract. On the facts found by the Tribunal, the goods were not sent directly to buyers, no payment was received at Aligarh from buyers, and the sales were made by the consignment agent after receipt of the goods at Delhi. Mere prompt sale on the same day did not establish the necessary nexus between movement and sale.

Conclusion: The transaction was correctly treated as stock transfer through a consignment agent and not as an inter-State sale.

Final Conclusion: The revision was rejected and the Tribunal's finding in favour of stock transfer was sustained.

Ratio Decidendi: In the absence of material showing a pre-existing contract and movement of goods in pursuance of that contract, sale by a consignment agent after receipt of goods at the destination does not by itself amount to an inter-State sale.

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