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Judgment
Veeraswami, J.—This is a Tax Case filed by the State directed against an order of the Tribunal which, in respect of the five transactions,
took the view that they were outside depot sale and were not inter-State in character. The assessee has its headquarters in Sivakasi in this State,
and has depots in Mysore State, one at Sholapur and another at Devanagere. These depots collect orders from local buyers of Mysore State,
transmit them to the head office with instructions to despatch and deliver goods directly to the buyer. While despatching the goods the head office
writes to the buyer, vide letter dated 11-7-1960 to Ramesh Vajirkar, Safety Match Dealer, Bijapur to pay the lorry charges and clear the goods.
After the arrival of the goods at the destination, the depot concerned in the Mysore State prepares the bills or invoices which include also the
transport charges and collect the money from the buyer.
The Tribunal took the view, as we said that the transactions constitute outside sales. We are unable to accept that view. The Tribunal appears to
have been mainly led by the fact that there was no contract between the head office and the buyer and therefore, there could not be any inter-State
movement in pursuance of such a contract. This is obviously a wrong approach. The question is whether there was a contract of sale which
occasioned the movement of the goods from one State to another. Such movement should be under or as incidental to the contract, incidental in
the sense that the parties to the contract did contemplate movement of goods from one State to another. When goods were sent by the head office
in this State to the buyer in the other State and the purchaser was advised about it with the stipulation that the latter should pay the lorry freight and
clear the goods, it is obvious that the movement is under the contract for transport of the goods from one State to the other. The fact that orders
are collected outside the State, invoices are prepared there and collection also is made there, can make no difference to the position that under the
contract of sale, though entered into with the Mysore depot, the goods moved from one State to the other and in this case directly to the buyer at
least in one instance. We are of the view that the transaction in such a case is clearly inter-State in character.
On that view the tax case is allowed and the appeal is remitted to the file of the Tribunal with a direction that it will examine whether all the
transactions are like what we have stated and dispose of the appeal in the light of this judgment. There will be no order as to costs.