Inter-State sale under Section 3(a) governs when the contract itself causes movement of goods, fixing Karnataka tax jurisdiction.

Where the contract itself occasions movement of goods from one State to another, the sale is an inter-State sale under Section 3(a) of the Central Sales Tax Act, not a subsequent sale in transit under Section 3(b) read with Section 6(2). On the facts, the contract terms, lorry receipts, and supply of goods manufactured to specification for delivery in Karnataka showed that the movement was directly attributable to the sale. Section 23 of the Sale of Goods Act, 1930 did not change that character. The proviso to Section 9(1) made Karnataka the State competent to levy and collect tax, and the Revenue's challenge succeeded.

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Issues: Whether the supply transaction was an inter-State sale falling under Section 3(a) of the Central Sales Tax Act, 1956 rather than a subsequent sale in transit under Section 3(b) and Section 6(2), and whether Karnataka was the appropriate State to levy tax under the proviso to Section 9(1) of the Central Sales Tax Act, 1956.

Analysis: The transaction was examined in the light of the contract terms, the lorry receipts, and the fact that the goods were manufactured to specification and supplied for delivery to the buyer in Karnataka. The Court applied the principle that where the movement of goods from one State to another is occasioned by the contract of sale, the sale falls under Section 3(a); where property passes during movement by transfer of documents of title, Section 3(b) applies. It further held that Section 23 of the Sale of Goods Act, 1930 did not alter the result on the facts, and relied on the proviso to Section 9(1) to determine the State competent to levy tax on the transaction.

Conclusion: The sale was held to be an inter-State sale under Section 3(a) of the Central Sales Tax Act, 1956, Karnataka was held to be the appropriate State for levy and collection of tax, and the Revenue's challenge succeeded.

Final Conclusion: The revision petition was allowed, and the Tribunal's view was set aside in favour of taxability in Karnataka.

Ratio Decidendi: A sale occasioning movement of goods from one State to another by the contract itself is an inter-State sale under Section 3(a), and the State from which the movement commenced is the appropriate State for levy under Section 9(1) unless the transaction is a subsequent sale exempt under Section 6(2).

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