TaxTMI 
TaxTMI 
1993 (4) TMI 270
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....-operative sugar factory having its sugar factory at Chittur in the Kerala State. Inasmuch as sufficient quantity of sugarcane was not available within the State of Kerala, the appellant and the Government of Kerala approached the State of Tamil Nadu for supply of sugarcane to the appellant-factory. In pursuance of the understanding arrived at between them, the Government of Tamil Nadu issued an order contained in G.O. Ms. No. 2260 dated July 20, 1963. By virtue of this order, the appellant was permitted to draw sugarcane from not more than 3,000 acres in Coimbatore and Pollachi taluks in Tamil Nadu, subject to the conditions specified therein. Condition No. 5 read thus: "(Cl. 5): The Co-operative Sugars Ltd., Chittur, should remit to th....
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.... On a consideration of the above circumstances, the High Court concluded that inasmuch as the sale took place within the State of Tamil Nadu and the property in the goods passed to the appellant in Tamil Nadu, the mere fact of transport of the goods later from Tamil Nadu to Kerala as its own goods makes no difference. In such a case, the High Court held, it cannot be said that the movement of the goods was a stipulation of or an incident of the contract of sale. The correctness of the said view is challenged in this appeal. Section 3 of the Central Sales Tax Act, 1956, reads as follows: "3. When is a sale or purchase of goods said to take place in the course of inter-State trade or commerce.-A sale or purchase of goods shall be dee....
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.... every purchase that takes place within that State. Ordinarily, it is so, but where a sale or purchase, though effected within the State of U.P. occasions the movement of goods sold/purchased thereunder from the State of U.P. to other State, it becomes an inter-State sale. Such a sale cannot be taxed by the Legislature of Uttar Pradesh. It is taxable only under the Central Sales Tax Act, 1956. Situation could have been different if the respondent-dealer had purchased the goods on behalf of the ex-U.P. principals in the first instance and thereafter in pursuance of subsequent instructions despatched the goods. In such an evident the instructions to despatch the goods are independent of the instructions to purchase. There is a break bet....
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.... be dissociated in this case. There is no break between the purchase and the movement of the goods to another State, viz., Kerala. It is immaterial, in such a case whether the sale/purchase takes place within Tamil Nadu or within Kerala. So long as the movement of goods is an incident of the sale/purchase it amounts to an inter-State sale/purchase. It is not also necessary that the contract of sale must expressly provide for movement of goods. It is sufficient if the movement of goods is implicit in the sale. In our opinion, the High Court was not right (in holding) in the facts and circumstances held established by it in this case that the sale and movement of goods are unconnected and dissociated transactions. They are not. Mr. Poti, l....