Inter-State sale versus branch transfer turns on customer orders, specifications, and the dealer's burden under stock transfer rules.

Movement of goods from a manufacturing unit to branches is an inter-State sale under the Central Sales Tax Act when the transfer is occasioned by customer orders and pre-existing specifications, rather than a genuine stock transfer. Section 6A places the burden on the dealer to prove branch transfer, and a Form F declaration is effective only after that burden is discharged. On the recorded facts, customers approached branch offices, specifications were finalised, and dispatch instructions were sent to the factory, so the movement was treated as arising from sale contracts and not branch transfer.

---

---

Issues: Whether the movement of goods from the assessee's manufacturing unit in Maharashtra to its branches in other States was an inter-State sale occasioned by pre-existing customer orders or a branch transfer within the meaning of the Central Sales Tax Act, 1956.

Analysis: Section 3 of the Central Sales Tax Act, 1956 brings a transaction within inter-State trade where the sale occasions movement of goods from one State to another. Section 6A places the burden on the dealer to prove that the movement was by way of stock transfer and not sale, and a Form F declaration operates only where the dealer establishes that position. The materials recorded before the Customs, Excise and Service Tax Appellate Tribunal showed that customers approached branch offices, specifications were worked out, and dispatch instructions were sent to the factory for goods manufactured to those specifications. On those facts, the movement of goods was occasioned by customer orders and not by a mere transfer to branches. The assessee could not adopt a contrary stand in the sales tax proceedings after having ed the factual position in the earlier proceedings.

Conclusion: The transaction was an inter-State sale and not a branch transfer; the assessee's claim for branch transfer failed.

Final Conclusion: The assessment order was restored in substance and the finding that only part of the turnover was branch transfer was rejected. The revenue authorities were held entitled to proceed on the basis that the disputed movement of goods attracted Central sales tax.

Ratio Decidendi: Where goods are manufactured and moved to branches pursuant to customer orders and specifications, the presence of branch offices and Form F declarations does not displace the character of the transaction as an inter-State sale if the movement of goods is occasioned by a pre-existing contract of sale.

---