Branch transfers to out-of-State depots were not inter-State sales where factual findings showed stock movement and local disposal.

Goods moved from branches and depots outside the State were held to be branch transfers, not inter-State sales under the Central Sales Tax Act, because the Tribunal's findings showed stock transfer invoices, no link to specific buyers, local disposal at depots, and proper Form-F records. Those findings were treated as factual and supported by evidence, so no substantial question of law arose for interference. Penalty was also not sustained as a separate challenge, since the Tribunal had already restricted it to the balance turnover upheld after deleting the major taxable portion. The Revenue's writ petitions therefore failed.

---

---

Issues: (i) Whether the despatches to the branches and depots outside the State were inter-State sales liable to tax under the Central Sales Tax Act, 1956, or mere branch transfers. (ii) Whether penalty could be sustained on the turnover upheld in assessment.

Issue (i): Whether the despatches to the branches and depots outside the State were inter-State sales liable to tax under the Central Sales Tax Act, 1956, or mere branch transfers.

Analysis: The Tribunal had examined the documents and recorded detailed findings that the assessee maintained branches at its own expense, goods were moved under stock transfer invoices without reference to any specific buyer, the depots retained discretion over disposal, the goods were sold locally at the branch level, and Form-F records were in order. The High Court found that these were pure findings of fact based on relevant evidence. It held that, on such facts, the movement of goods was by way of branch transfer and not inter-State sale, and no substantial question of law arose warranting interference.

Conclusion: The issue was decided in favour of the assessee and against the Revenue.

Issue (ii): Whether penalty could be sustained on the turnover upheld in assessment.

Analysis: The Tribunal had already deleted the substantial portion of the turnover treated as taxable and had considered the penalty only in respect of the balance upheld turnover. It also noted that penalty had to be worked out under the relevant provisions after remand. The High Court, having accepted the Tribunal's factual conclusions on the nature of the transactions, found no merit in the Revenue's challenge to the Tribunal's order as a whole.

Conclusion: The issue was decided in favour of the assessee and against the Revenue.

Final Conclusion: The writ petitions filed by the Revenue failed, and the Tribunal's view that the disputed despatches were branch transfers rather than inter-State sales was left undisturbed.

Ratio Decidendi: Where the Tribunal's conclusion that goods moved to out-of-State depots were transferred as stock/branch transfers is supported by detailed factual findings, the High Court will not interfere in the absence of a substantial question of law, and such transactions cannot be taxed as inter-State sales.

---