Inter-State sale requires a prior contract causing movement; branch dispatches from stock remain stock transfers under CST law.

Movement of goods from a plant to branch offices under a Time Bound Supply Scheme and Demand Registration Scheme is treated as an inter-State sale only if a concluded contract of sale is the proximate cause of the movement under section 3(a) of the Central Sales Tax Act, 1956. Where bulk goods are sent to branches in another State, documents are raised in the branches' names, and sales are made later from branch stock to local buyers, the transaction is characterised as a stock transfer rather than a sale occasioning inter-State movement. Supporting branch-transfer declarations under section 6A may discharge the assessee's burden when the Revenue cannot show a prior contract with identified buyers.

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Issues: Whether the movement of goods from the Rourkela Steel Plant to the appellant's branches in other States under the Time Bound Supply Scheme and Demand Registration Scheme constituted inter-State sales under section 3(a) of the Central Sales Tax Act, 1956, or mere stock transfers.

Analysis: The decisive question was whether there was a contract of sale that occasioned the movement of goods from one State to another, with a direct and inextricable nexus between the contract and the movement. The record showed that the plant dispatched standard goods in bulk to branches, the plant documents were in the name of the branches, and the branches thereafter made their own local sales from stock. The earlier appellate order had already held that the scheme itself was only a broad framework and not an offer or agreement of sale, and that a typical transaction did not establish a concluded contract preceding movement. On the materials examined after remand, the later finding that the scheme and pre-offer constituted an agreement of sale could not be sustained, particularly when the goods were not earmarked for identified buyers at the time of dispatch and the branch-level offers and deliveries occurred after receipt of stock. The statutory burden under section 6A stood discharged by the assessee through the established branch-transfer pattern and supporting declarations, and the Revenue failed to show that the movement was occasioned by a prior contract of sale.

Conclusion: The movement of goods was not an inter-State sale; it was a branch stock transfer. The issue is answered in favour of the assessee and against the Revenue.

Ratio Decidendi: For a transaction to fall within section 3(a) of the Central Sales Tax Act, 1956, the contract of sale must be the proximate cause of the inter-State movement of goods; where bulk goods are transferred to branches independently of any concluded contract with identified buyers and subsequent branch sales are made from stock, the movement is a stock transfer and not an inter-State sale.

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