Commissioner of Sales Tax, Uttar Pradesh and others, etc. etc Vs. M/s. Bakhtawar Lal Kailash Chand Areti and others, etc. etc
to B in State Y and if B accepts them a sale take place. It will be seen that in this case the movement of goods is neither in pursuance of the agreement to sell nor is the movement occasioned by the sale. The seller himself takes the goods on State Y and sells the goods there. This is, therefore, purely an internal sale which takes place in State Y and falls beyond the purview of Section 3(a) of the Central Sales Tax Act not being an inter-State sale Case No. III - B a purchaser in State Y comes to State X and purchases the goods and pays the price thereof. After having purchased the goods he then books the goods from State X to State Y in his own name. This is also a case where the sale is purely an internal sale having taken place in State X and the movement of goods is not occasioned by the sale but takes place after the property is purchased by B and becomes his property Generally these are the only type of cases that can occur in the day to day commercial transactions. It is, therefore, manifest that there can hardly be a case where once a sale takes place the movement is subsequent to the sale." 14. The learned Judge proceeded further and held thus : (SCC p. 53, para 15) "(2) That the following conditions must be satisfied before a sale can be said to take place in the course of inter-State trade or commerce (i) that there is an agreement to sell which contains a stipulation express or implied regarding the movement of the goods from one State to another; (ii) that in pursuance of the said contract the goods in fact move from one State to another; and (iii) that ultimately a concluded sale takes place in the State where the goods are sent which must be different from the State from which the goods move "If these conditions are satisfied then by virtue of section 9 of the Central Sales Tax Act it is the State from which the goods move which will be competent to levy the tax under the provisions of the Central Sales Tax Act. This proposition is not, and cannot, be disputed by the learned counsel for the parties." * 15. Shri Sehgal relies particularly upon "Case No. III" contained in the first extract and clause (iii) mentioned in the second extract. Relying upon these statements, the learned counsel contends that a concluded sale must necessarily take place in the other State and not in the State from which the goods emanate. According to him a concluded or completed sale must follow the movement of goods and should not precede. If a purchase or sale is complete in the State from which the goods emanate, he says, it can never be an inter-State purchase or sale. We cannot accede to this understanding of the learned counsel. The said observations, no doubt rather widely worded, must be understood in the context of the question that arose for consideration in the case viz., whether an agreement of sale is included within the definition of sale as defined in the Central Sales Tax Act. Be that as it may, the true position has since been explained in the later decision in Khosla and Co. It is immaterial whether a completed sale precedes the movement of goods or follows the movement of goods, or for that matter, takes place while the goods are in transit. What is important is that the movement of goods and the sale must be inseparably connected. The ratio of Balabhagas ( 1976 (2) SCC 44 : 1976 SCC(Tax) 164 : 1976 (2) SCR 939 ) is this : if the goods move from one State to another in pursuance of an agreement of sale and the sale is completed in other State, it is an inter-State sale. The observations relied upon by Shri Sehgal do not constitute the ratio of the decision and cannot come to rescue of the appellant State. Indeed, if one looks to the language employed in clause (a) of Section 3 it seems to suggest that the movement of goods follows upon and is the necessary consequence of the sale or purchase, as the case may be, and not the other way round. 16. Shri Sehgal is equally not right in saying that the movement of goods from the State of U.P. to other State (s) is immaterial and that the U.P. Legislature is competent to tax each and every purchase that takes place within the 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. 17. 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 event the instructions to despatch the goods are independent of the instructions to purchase. There is break between the purchase and despatch of goods. It would not be an inter-State purchase. An out-State principal may first instruct his commission agent within the State of U.P. to purchase the goods on his behalf and to await his further instructions. Depending upon the market conditions and other circumstances, the ex-State principal may instruct his agent in the State either to sell the goods within the State or to despatch the goods beyond the State. If such were the case, Shri Sehgal would have been right in saying that the State of U.P. was competent to tax the purchase by respondent-dealer. But that is not case here on the facts found by the .appropriate authorities.
0[ds]11. It we examine the facts of this case in the light of the above principles, it would be clear that the purchases effected by the respondent-dealer were inter-State purchases. The purchases were made by the respondent as a commission agent on behalf of the ex-U.P. principals and the goods purchased under each of the purchases were duly despatched to such principals. It is found that such despatch took place not later than three days from the date of purchase, as soon as the railway wagon was available. The purchase of goods and their despatch to ex-State principal were parts of the same transaction. The movement of goods from Uttar Pradesh to another State was occasioned by and was the result - or the incident of - the purchase. It was the consequence of the purchase. Such movement of goods, though not proved to have been expressly stated in the contract of sale, was yet held to have been agreed upon between the parties. We must emphasise that the question whether a sale/purchase is an inter-State sale/purchase depends on the facts of each case. The principles are well settled; it is only a question of application of these principles to the facts found in each casehe said observations, no doubt rather widely worded, must be understood in the context of the question that arose for consideration in the case viz., whetheran agreement of sale is included within the definition of sale as defined in the Central Sales TaxAct.Be that as it may, the true position has since been explained in the later decision in Khosla and Co. It is immaterial whether a completed sale precedes the movement of goods or follows the movement of goods, or for that matter, takes place while the goods are in transit. What is important is that the movement of goods and the sale must be inseparably connected. The ratio of Balabhagas ( 1976 (2) SCC 44 : 1976 SCC(Tax) 164 : 1976 (2) SCR 939 ) is this : if the goods move from one State to another in pursuance of an agreement of sale and the sale is completed in other State, it is an inter-State sale. The observations relied upon by Shri Sehgal do not constitute the ratio of the decision and cannot come to rescue of the appellant State. Indeed, if one looks to the language employed in clause (a) of Section 3 it seems to suggest that the movement of goods follows upon and is the necessary consequence of the sale or purchase, as the case may be, and not the other way roundWe cannot accede to this understanding of the learned counsel.Thesaid observations, no doubt rather widely worded, must be understood in the context of the question that arose for consideration in the case viz., whetheran agreement of sale is included within the definition of sale as defined in the Central Sales TaxAct.Be that as it may, the true position has since been explained in the later decision in Khosla and Co. It is immaterial whether a completed sale precedes the movement of goods or follows the movement of goods, or for that matter, takes place while the goods are in transit. What is important is that the movement of goods and the sale must be inseparably connected.Theratio of Balabhagas ( 1976 (2) SCC 44 : 1976 SCC(Tax) 164 : 1976 (2) SCR 939 ) is this : if the goods move from one State to another in pursuance of an agreement of sale and the sale is completed in other State, it is an inter-State sale.Theobservations relied upon by Shri Sehgal do not constitute the ratio of the decision and cannot come to rescue of the appellant State. Indeed, if one looks to the language employed in clause (a) of Section 3 it seems to suggest that the movement of goods follows upon and is the necessary consequence of the sale or purchase, as the case may be, and not the other way round16. Shri Sehgal is equally not right in saying that the movement of goods from the State of U.P. to other State (s) is immaterial and that the U.P. Legislature is competent to tax each and every purchase that takes place within the 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, 195617. 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 event the instructions to despatch the goods are independent of the instructions to purchase.e is break between the purchase and despatch of goods. It would not be an inter-State purchase. An out-State principal may first instruct his commission agent within the State of U.P. to purchase the goods on his behalf and to await his further instructions. Depending upon the market conditions and other circumstances, the ex-State principal may instruct his agent in the State either to sell the goods within the State or to despatch the goods beyond the State. If such were the case, Shri Sehgal would have been right in saying that the State of U.P. was competent to tax the purchase by respondent-dealer. But that is not case here on the facts found by theappropriate authoritiesCivil Appeal No. 1534 of 1990For the purpose of the U.P. Sales Tax Act, it is enough that a sale or purchase takes place within the State; the subsequent movement of the goods is irrelevant, says the counsel. We find it not possible to agree.
### Instruction:
Hypothesize the court's verdict (affirmation (1) or negation (0) of the appeal), and then clarify this hypothesis by interpreting significant sentences from the case proceeding.

### Input:
to B in State Y and if B accepts them a sale take place. It will be seen that in this case the movement of goods is neither in pursuance of the agreement to sell nor is the movement occasioned by the sale. The seller himself takes the goods on State Y and sells the goods there. This is, therefore, purely an internal sale which takes place in State Y and falls beyond the purview of Section 3(a) of the Central Sales Tax Act not being an inter-State sale Case No. III - B a purchaser in State Y comes to State X and purchases the goods and pays the price thereof. After having purchased the goods he then books the goods from State X to State Y in his own name. This is also a case where the sale is purely an internal sale having taken place in State X and the movement of goods is not occasioned by the sale but takes place after the property is purchased by B and becomes his property Generally these are the only type of cases that can occur in the day to day commercial transactions. It is, therefore, manifest that there can hardly be a case where once a sale takes place the movement is subsequent to the sale." 14. The learned Judge proceeded further and held thus : (SCC p. 53, para 15) "(2) That the following conditions must be satisfied before a sale can be said to take place in the course of inter-State trade or commerce (i) that there is an agreement to sell which contains a stipulation express or implied regarding the movement of the goods from one State to another; (ii) that in pursuance of the said contract the goods in fact move from one State to another; and (iii) that ultimately a concluded sale takes place in the State where the goods are sent which must be different from the State from which the goods move "If these conditions are satisfied then by virtue of section 9 of the Central Sales Tax Act it is the State from which the goods move which will be competent to levy the tax under the provisions of the Central Sales Tax Act. This proposition is not, and cannot, be disputed by the learned counsel for the parties." * 15. Shri Sehgal relies particularly upon "Case No. III" contained in the first extract and clause (iii) mentioned in the second extract. Relying upon these statements, the learned counsel contends that a concluded sale must necessarily take place in the other State and not in the State from which the goods emanate. According to him a concluded or completed sale must follow the movement of goods and should not precede. If a purchase or sale is complete in the State from which the goods emanate, he says, it can never be an inter-State purchase or sale. We cannot accede to this understanding of the learned counsel. The said observations, no doubt rather widely worded, must be understood in the context of the question that arose for consideration in the case viz., whether an agreement of sale is included within the definition of sale as defined in the Central Sales Tax Act. Be that as it may, the true position has since been explained in the later decision in Khosla and Co. It is immaterial whether a completed sale precedes the movement of goods or follows the movement of goods, or for that matter, takes place while the goods are in transit. What is important is that the movement of goods and the sale must be inseparably connected. The ratio of Balabhagas ( 1976 (2) SCC 44 : 1976 SCC(Tax) 164 : 1976 (2) SCR 939 ) is this : if the goods move from one State to another in pursuance of an agreement of sale and the sale is completed in other State, it is an inter-State sale. The observations relied upon by Shri Sehgal do not constitute the ratio of the decision and cannot come to rescue of the appellant State. Indeed, if one looks to the language employed in clause (a) of Section 3 it seems to suggest that the movement of goods follows upon and is the necessary consequence of the sale or purchase, as the case may be, and not the other way round. 16. Shri Sehgal is equally not right in saying that the movement of goods from the State of U.P. to other State (s) is immaterial and that the U.P. Legislature is competent to tax each and every purchase that takes place within the 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. 17. 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 event the instructions to despatch the goods are independent of the instructions to purchase. There is break between the purchase and despatch of goods. It would not be an inter-State purchase. An out-State principal may first instruct his commission agent within the State of U.P. to purchase the goods on his behalf and to await his further instructions. Depending upon the market conditions and other circumstances, the ex-State principal may instruct his agent in the State either to sell the goods within the State or to despatch the goods beyond the State. If such were the case, Shri Sehgal would have been right in saying that the State of U.P. was competent to tax the purchase by respondent-dealer. But that is not case here on the facts found by the .appropriate authorities.

### Response:
0

### Explanation:
11. It we examine the facts of this case in the light of the above principles, it would be clear that the purchases effected by the respondent-dealer were inter-State purchases. The purchases were made by the respondent as a commission agent on behalf of the ex-U.P. principals and the goods purchased under each of the purchases were duly despatched to such principals. It is found that such despatch took place not later than three days from the date of purchase, as soon as the railway wagon was available. The purchase of goods and their despatch to ex-State principal were parts of the same transaction. The movement of goods from Uttar Pradesh to another State was occasioned by and was the result - or the incident of - the purchase. It was the consequence of the purchase. Such movement of goods, though not proved to have been expressly stated in the contract of sale, was yet held to have been agreed upon between the parties. We must emphasise that the question whether a sale/purchase is an inter-State sale/purchase depends on the facts of each case. The principles are well settled; it is only a question of application of these principles to the facts found in each casehe said observations, no doubt rather widely worded, must be understood in the context of the question that arose for consideration in the case viz., whetheran agreement of sale is included within the definition of sale as defined in the Central Sales TaxAct.Be that as it may, the true position has since been explained in the later decision in Khosla and Co. It is immaterial whether a completed sale precedes the movement of goods or follows the movement of goods, or for that matter, takes place while the goods are in transit. What is important is that the movement of goods and the sale must be inseparably connected. The ratio of Balabhagas ( 1976 (2) SCC 44 : 1976 SCC(Tax) 164 : 1976 (2) SCR 939 ) is this : if the goods move from one State to another in pursuance of an agreement of sale and the sale is completed in other State, it is an inter-State sale. The observations relied upon by Shri Sehgal do not constitute the ratio of the decision and cannot come to rescue of the appellant State. Indeed, if one looks to the language employed in clause (a) of Section 3 it seems to suggest that the movement of goods follows upon and is the necessary consequence of the sale or purchase, as the case may be, and not the other way roundWe cannot accede to this understanding of the learned counsel.Thesaid observations, no doubt rather widely worded, must be understood in the context of the question that arose for consideration in the case viz., whetheran agreement of sale is included within the definition of sale as defined in the Central Sales TaxAct.Be that as it may, the true position has since been explained in the later decision in Khosla and Co. It is immaterial whether a completed sale precedes the movement of goods or follows the movement of goods, or for that matter, takes place while the goods are in transit. What is important is that the movement of goods and the sale must be inseparably connected.Theratio of Balabhagas ( 1976 (2) SCC 44 : 1976 SCC(Tax) 164 : 1976 (2) SCR 939 ) is this : if the goods move from one State to another in pursuance of an agreement of sale and the sale is completed in other State, it is an inter-State sale.Theobservations relied upon by Shri Sehgal do not constitute the ratio of the decision and cannot come to rescue of the appellant State. Indeed, if one looks to the language employed in clause (a) of Section 3 it seems to suggest that the movement of goods follows upon and is the necessary consequence of the sale or purchase, as the case may be, and not the other way round16. Shri Sehgal is equally not right in saying that the movement of goods from the State of U.P. to other State (s) is immaterial and that the U.P. Legislature is competent to tax each and every purchase that takes place within the 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, 195617. 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 event the instructions to despatch the goods are independent of the instructions to purchase.e is break between the purchase and despatch of goods. It would not be an inter-State purchase. An out-State principal may first instruct his commission agent within the State of U.P. to purchase the goods on his behalf and to await his further instructions. Depending upon the market conditions and other circumstances, the ex-State principal may instruct his agent in the State either to sell the goods within the State or to despatch the goods beyond the State. If such were the case, Shri Sehgal would have been right in saying that the State of U.P. was competent to tax the purchase by respondent-dealer. But that is not case here on the facts found by theappropriate authoritiesCivil Appeal No. 1534 of 1990For the purpose of the U.P. Sales Tax Act, it is enough that a sale or purchase takes place within the State; the subsequent movement of the goods is irrelevant, says the counsel. We find it not possible to agree.
