Transaction-wise scrutiny governs inter-State sale classification; blanket rejection of stock transfer claims is not sustainable.

Movement of goods is treated as an inter-State sale where the recorded purchase order shows predetermined quantity, delivery terms, destination and specifications, and Form F declarations by themselves do not establish branch transfer. However, turnover cannot be disallowed in bulk on the basis of a single purchase order when the balance transactions are not separately examined. For later assessment years, the authority must analyse each transaction independently and cannot sustain an assessment by relying on reasons drawn from another period or a different buyer. The document therefore stresses transaction-wise scrutiny under the Central Sales Tax framework and limits blanket rejection of stock transfer claims.

---

---

Issues: (i) Whether the disallowance of the stock transfer claim for the year 2006-07 could be sustained in full when the purchase order on record covered only part of the turnover; (ii) Whether the assessment for the year 2007-08 could stand when the reasons recorded did not independently examine the individual transactions and relied on material relating to a different period and buyer.

Issue (i): Whether the disallowance of the stock transfer claim for the year 2006-07 could be sustained in full when the purchase order on record covered only part of the turnover.

Analysis: The transaction covered by the Tata Steel purchase order contained predetermined details of quantity, delivery dates, delivery point and specifications, and the movement of goods in relation to that order was rightly treated as occasioning an inter-State sale. The record also showed verification of documents under Section 6A(2) of the Central Sales Tax Act, 1956, and production of Form F declarations did not, by itself, establish branch transfer. At the same time, the entire turnover for the year could not be rejected merely on the basis of that single purchase order when no specific material was discussed for the balance transactions.

Conclusion: The disallowance was correct only to the extent of the turnover covered by the purchase order on record, and the balance disallowance was unsustainable and required remand.

Issue (ii): Whether the assessment for the year 2007-08 could stand when the reasons recorded did not independently examine the individual transactions and relied on material relating to a different period and buyer.

Analysis: The assessment order repeated the earlier reasoning without specifically dealing with the transactions said to relate to M/s Omni Auto Ltd. and without identifying the other buyers referred to in the show-cause notice. The legal position requires examination of each individual transaction to determine whether it amounts to an inter-State sale under Section 3(a) of the Central Sales Tax Act, 1956, and general statements or borrowed reasons from another assessment period are insufficient. The order therefore suffered from material lacunae and could not be sustained as a whole.

Conclusion: The assessment for 2007-08 was set aside and remanded for fresh decision in accordance with law.

Final Conclusion: The decision sustained the inter-State sale character only for the turnover specifically supported by the recorded purchase order, while the remaining turnover and the entire assessment for the later year were sent back for fresh adjudication after proper transaction-wise examination.

Ratio Decidendi: In determining whether a movement of goods amounts to an inter-State sale, the authority must examine each individual transaction on the basis of its own material, and a turnover cannot be rejected in bulk on the strength of a purchase order or reasoning relating only to part of the transactions.

---