Inter-State stock transfer principle applied where depot supplies were made for future orders, not under a binding sale contract.

Beer moved from a manufacturing unit in Rajasthan to depots in Bihar and Jharkhand was treated as an inter-State stock transfer, not an inter-State sale. The governing liquor policy and master agreement showed that the State corporations had no obligation to buy any minimum quantity, and supply orders were placed only through later OFS instructions. Because movement of stock was undertaken to keep depots ready for future orders, and not pursuant to any concluded contract of sale or enforceable agreement to buy, central sales tax was not payable.

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Issues: Whether the movement of beer from the appellant's manufacturing unit in Rajasthan to its depots in Bihar and Jharkhand was an inter-state sale liable to central sales tax, or an inter-state stock transfer not occasioned by any prior contract of sale or agreement to sell.

Analysis: The governing liquor policy and the master agreement showed that the State corporations were not obliged to purchase any minimum quantity, that orders for supply were placed through OFS from time to time, and that delivery, quantity, and timing depended on those subsequent orders. The agreement required the appellant to maintain stock at the depots and to deliver at its own cost and risk, but it did not bind the corporations to purchase any specified quantity or create an enforceable obligation to buy. The supply against OFS was treated as an agreement to sell only when the OFS was issued, and the movement from Rajasthan to the depots was undertaken to maintain stock readiness, not because of any concluded contract of sale. The agreement was therefore in the nature of a standing arrangement or tender, and the movement of goods was not incidental to a prior sale agreement.

Conclusion: The movement of goods was an inter-state stock transfer and not an inter-state sale; the levy of central sales tax was unsustainable.

Ratio Decidendi: Where the buyer is under no obligation to purchase any minimum quantity and the seller moves goods only to maintain depot stock for future orders, the movement is not occasioned by a prior contract of sale or agreement to sell and does not constitute an inter-state sale.

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