Stock transfer versus inter-State sale: exemption failed where goods were first sold in Assam and then moved to a branch.

Goods purchased and invoiced in Assam, with the Uttar Pradesh unit shown as consignee, were treated as a completed intra-State sale followed by movement to the dealer's own branch, not as an inter-State sale effected by transfer of documents of title during transit. On that basis, the movement was characterised as a stock transfer. Because Section 6(2) applies only to a qualifying subsequent sale during movement supported by the prescribed declarations, the furnished Form C and Form E-I could not secure exemption; Form F was identified as the appropriate form in the circumstances. The exemption claim therefore failed.

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Issues: (i) Whether the transaction was an inter-State sale effected by transfer of documents of title during movement or only a stock transfer to the dealer's Uttar Pradesh branch. (ii) Whether exemption under Section 6(2) of the Central Sales Tax Act, 1956 was available on the basis of the statutory declarations and forms furnished.

Issue (i): Whether the transaction was an inter-State sale effected by transfer of documents of title during movement or only a stock transfer to the dealer's Uttar Pradesh branch.

Analysis: The record showed that the purchase was made at Assam through the dealer's Assam registration, the tax invoice and railway receipt reflected completion of the sale at Assam, and the Uttar Pradesh unit was shown as consignee. The movement of goods commenced from Assam and the goods were sent to the Uttar Pradesh registered dealer after the purchase had already been concluded. On these facts, the movement was not treated as a sale in the course of inter-State trade effected by transfer of title during transit, but as a branch or stock transfer.

Conclusion: The transaction was held to be a stock transfer and not an inter-State sale in favour of the assessee.

Issue (ii): Whether exemption under Section 6(2) of the Central Sales Tax Act, 1956 was available on the basis of the statutory declarations and forms furnished.

Analysis: Exemption under Section 6(2) applies only to a subsequent sale during movement that satisfies the statutory conditions, including the prescribed declarations under Section 8(4) and Rule 12(1). Since the transaction was found to be a stock transfer and not a subsequent inter-State sale, the forms furnished, including Form C and Form E-I, could not confer the claimed exemption. The Court also held that the appropriate form in the circumstances would have been Form F.

Conclusion: The claim to exemption under Section 6(2) failed and was rejected in favour of the revenue.

Final Conclusion: The revisions failed because the goods had already been purchased and moved as a completed sale within Assam, with the later movement to Uttar Pradesh being treated as a stock transfer rather than a taxable subsequent inter-State sale exempt under the Central Sales Tax Act.

Ratio Decidendi: Where goods are purchased and the sale is completed in one State and are thereafter sent to another State to the dealer's own branch or registration, the movement is a stock transfer and not an inter-State sale by transfer of documents of title, so the exemption for subsequent sales under Section 6(2) is unavailable.

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