Stock transfer, not inter-State sale, arises where goods move to depots before any concluded sale or supply order.

Movement of goods from Rajasthan to depots in Bihar and Jharkhand was held to be stock transfer, not an inter-State sale under section 3(a) of the Central Sales Tax Act, because the movement was not occasioned by any concluded sale or agreement to sell. The Liquor Policy required supply only against Orders for Supply, imposed no minimum purchase obligation, and the Master Agreement merely regulated delivery, risk, storage, and pricing without creating a binding sale at the time of dispatch. Since the actual sale was concluded later on issuance of Orders for Supply from depot stock, the disputed central sales tax liability on the stock movements could not stand.

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Issues: Whether the movement of beer from the appellants' manufacturing units in Rajasthan to their depots in Bihar and Jharkhand was an inter-State sale falling under section 3(a) of the Central Sales Tax Act, 1956, or merely stock transfer; and whether the Liquor Policy, Master Agreement, and Order for Supply occasioned the movement as a contract of sale.

Analysis: Section 3(a) of the Central Sales Tax Act, 1956 applies only when a sale or agreement to sell occasions movement of goods from one State to another. A mere branch transfer or stock transfer is not a sale in the course of inter-State trade. The Liquor Policy required the Corporation to issue Orders for Supply based on demand, imposed no obligation to procure any minimum quantity, and treated supply against OFS as an agreement to sell under section 4(3) of the Sale of Goods Act, 1930 only when delivery was made pursuant to an OFS. The Master Agreement regulated delivery, risk, storage, and pricing, but did not bind the Corporation to purchase any specified quantity or by itself fix a concluded sale. The appellants maintained stock at their depots to satisfy licensing and inventory requirements, and the actual sale was concluded only when OFS was issued and goods were sold from the depots. The movement from Rajasthan to the depots was therefore prior stock transfer, not movement occasioned by any prior contract of sale.

Conclusion: The movement of goods to the depots in Bihar and Jharkhand was not an inter-State sale under section 3(a); it was stock transfer, and the finding of the Tax Board was unsustainable.

Final Conclusion: The impugned order was set aside and the appeals were allowed, leaving the appellants not liable to the disputed central sales tax on the stock movements in question.

Ratio Decidendi: For section 3(a) of the Central Sales Tax Act, 1956, inter-State taxability arises only where the movement of goods is occasioned by a concluded sale or agreement to sell; where goods are moved to maintain depot stock and the sale is concluded later on issuance of supply orders, the movement is a stock transfer and not an inter-State sale.

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