Inter-State sale character prevails where goods move pursuant to a prior contract, despite Form F and stock-transfer claims.

Movement of goods from the Faridabad unit to the Bihar supply chain was treated as an inter-State sale because the supplies were made pursuant to a pre-existing arrangement with the Bihar Government, with orders routed through the Patna office and dispatches made to satisfy those orders. The court noted that a claim of stock transfer and production of Form F did not displace the sale character where the movement was referable to a contract of sale, and payment of local tax in another State did not alter the central sales tax consequence. It also noted that refund or adjustment issues may be worked out under the later Tata Motors position, but that did not unsettle the Haryana demand.

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Issues: (i) whether the movement of energy food from the Faridabad unit to the Bihar supply chain amounted to inter-State sales under the Central Sales Tax law or only a branch transfer supported by Form F; (ii) whether the petitioner could still seek refund or adjustment of tax already paid in other States in respect of the same transactions.

Issue (i): whether the movement of energy food from the Faridabad unit to the Bihar supply chain amounted to inter-State sales under the Central Sales Tax law or only a branch transfer supported by Form F.

Analysis: The decisive test was whether the movement of goods from one State to another was occasioned by, or was an incident of, a prior contract of sale. The record showed that the supplies were made pursuant to a pre-existing arrangement with the Bihar Government, orders were placed through the Patna office, and the goods were manufactured and dispatched to satisfy those orders. In such circumstances, the mere assertion of stock transfer and production of Form F did not displace the finding that the movement was referable to a contract of sale. Payment of local tax in another State also did not neutralise the CST consequence of the inter-State movement.

Conclusion: The transaction was rightly treated as an inter-State sale and the Haryana assessment was upheld.

Issue (ii): whether the petitioner could still seek refund or adjustment of tax already paid in other States in respect of the same transactions.

Analysis: The Court noticed the later legal position recognised in Tata Motors, under which refund or transfer of tax may be worked out in appropriate cases even where the disputed transaction has already suffered tax in another State. At the same time, the Court preserved the revenue's entitlement to interest in terms of the interim order and did not disturb the finding that the impugned Haryana demand itself was sustainable. The refund question was therefore not a ground to interfere with the substantive assessment.

Conclusion: The petitioner was left open to pursue refund in accordance with the principles recognised in Tata Motors, but no relief was granted against the Haryana demand.

Final Conclusion: The writ petitions failed on the merits of the sales tax liability, while the separate refund issue was kept open for appropriate action in accordance with the later legal position.

Ratio Decidendi: Where the movement of goods from one State to another is pursuant to a prior contract of sale and not a mere independent branch transfer, the transaction is an inter-State sale liable to central sales tax, and the production of Form F does not by itself override that characterisation.

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