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I. 1. X of Delhi sells good to B of Madhya Pradesh. As per the terms ofcontract, goods are delivered by X in Delhi to a transport company and transportcompany delivers goods to B at Indore. In this case, because of the sale, goodshave moved from Delhi to Indore and, therefore, it is inter-State sale chargeable to the central sales tax.

2. X of Delhi sends goods in his own name to Bombay. At Bombay goodsare sold to different parties by the employees of X. In this case, the movemen

t of goods is not pursuance of sale or agreement to sell. It is sale which takes place in Bombay and, therefore, it is not chargeable to the central sales tax.

3. X of Kanpur enters into an agreement to sell 100 bags of chemical toY of Bhopal. X sends 110 bags by a transport company in his own name to Bhopal. At Bhopal Y selects 100 bags and takes delivery. Remaining 10 bags are soldon the spot to Z. In this case, sale of 100 bags is subject to central sales tax, whereas sale of 10 bags is a local sale at Bhopal and not chargeable to central sales tax.

4. A of Delhi comes to Patna and purchases goods from B in Patna. After purchasing, A transports these goods to Delhi in his own name. In this case movement of goods from Patna to Delhi is not occasioned by sale but takes after g

oods are purchased by A. It is, therefore, not chargeable to central sales tax.5. A of Delhi comes to Ajmer to purchase goods from B with the unders

tanding that B will send goods to Delhi under his supervision. This is chargeable to central sales tax.II. 1. Indian Oil Corporation (IOC) had a factory in Barauni (Bihar) anda depot at Kanpur. There was a contract with Indian Explosives Ltd (IE) for supply of naphtha to the fertilizer factory of IE in Kanpur. To materialize the contract, IOC installed a pipeline from its factory in Bihar to its depot in Kanpurand from the depot in Kanpur to the fertiliser factory of IE in Kanpur. Naphtha was supplied from the factory of IOC in Bihar to the fertiliser factory in Kanpur through this pipeline. All costs were borne by the buyer (i.e. IE). This involved movement of goods at two stages: one, from Bihar to Kanpur and the secon

d from Kanpur to Kanpur. The IOC contended that the first movement was a branchtransfer while the second amounted to intra-State sale (i.e sale within the same State). The Supreme Court, however, held that the movement of goods right from IOC in Bihar to fertilizer factory in Kanpur involved only one movement of goods and was termed as inter-State sale as the terms of contract were such that goods could not be sold except if they moved from Bihar to UP Indian Oil Corpn. Ltd. v. Union of India [1981] 47 STC 1 (SC).

2. In Balabhagas Hulaschand v. State of Orissa [1976] 37 STC 207, thefirm used to purchase raw jute through brokers in forward market in Orissa. The goods were dispatched in bags from Cuttack (Orissa) to Calcutta by rail. Thegoods were to be inspected, accepted, and weighted at railway siding at Calcuttaby the buyer and they would accept the same if the goods were according to thei

r specifications. The firm contended that when the goods were booked from Orissa, there was an agreement to sale. Sale concluded only at Calcutta after goodswere accepted. It was held by the Supreme Court that though sales took place atCalcutta, movement of goods from Orissa was in pursuant to agreement to sale.

In this case, the Supreme Court observed :The serious question that arises for consideration in this case is whethe

r or not the term sale of goods as used in section 3 includes an agreement to sell.It has already been pointed out that an agreement to sell is undoubtedly an element of sale. In fact a sale consists of three logical steps (i) that there isan offer, (ii) that there is an agreement to sell when the offer is accepted; and (iii) that in pursuance of the said agreement a concluded sale takes place. When the statute uses the words sale or purchase of goods, it automatically attracts the definition of sale of goods, as given in section 4 of the Sale of Goods Act,

1930, which is a statute passed by the same Parliament and is to some extent pari materia to the Central Sales Tax Act so far as transaction of sale is concerned.


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Thus, the movement for Orissa to West Bengal was in pursuance of agreement to sale and hence it is an inter-State sale.III. 1. X of Calicut sells goods to Y of Amritsar and delivers the sameto a transport company. The lorry receipt (i.e. LR) is sent to Y by post. While goods are in transit, Y sells the goods to Z of Mathura by making an endorsement on the LR and goods are diverted to Mathura. Delivery of Goods is taken by Zat Mathura. In this case there are 2 inter-State sales first by X to Y from cal

icut to Amritsar and second by Y to Z from Amritsar to Mathura. The first is chargeable to central sales tax. The second sale is, however, exempt in some casesunder section 6(2).IV. 1. East Indian Corporation Ltd. (EIC) purchased cotton from outside the State of Tamil Nadu. The goods were sent through railways. While goods were in transit from that other State to State of Tamil Nadu, EIC endorsed the RR in favour of another purchaser in Tamil Nadu. Though EIC and the subsequent buyer both were in the State of Tamil Nadu, this sale was treated as inter-state sale, on the basis of transfer of documents to tiltle, which moved from the other State toTamil Nadu- East India Corpn. Ltd. v. State of Tamil Nadu [1975] 36 STC 370(Mad).

2. Bombay Metal Depot (BMD) having office in Madras, got order from th

e Government of Kerala. In turn, BMD placed order to a supplier in Bombay. TheBombay supplier directly dispatched goods to Kerala. The document of title was sent to BMD which endorsed the document of title in favour of the Government of Kerala and later on BMD raised bill on the Government of kerala. It was held thatthe sale between BMD and the Government of Kerala is an inter-State sale State of Tamil Nadu v. Bombay Metal Depot [1978] 41 STC 140 (Mad).V. 1. Dalmia Paper Mills Ltd. (DPM) manufactures printing paper of various sizes, shades and quality at its factory in Andhra Pradesh. DPM has a depot at Delhi. Paper is sent by DPM to its depot at Delhi. In such case though goodsmove from Andhra Pradesh to Delhi, there is no inter-State sale because elementof sale is missing. If a publishing house at Delhi purchases paper from Delhi depot of DPM it is intra-State sale within Delhi. Suppose a publishing house in Delhi requires paper of a specific size, colour and weight which is not of a stan

dard size, colour and weight. It contacts DPM in Andhra Pradesh and the lattermanufactures paper of the specific requirement of the publishing house. After manufacture, paper is sent to the Delhi depot of DPM and goods are sold by the Delhi depot of DPM. In this case, the movement of paper from Andhra Pradesh to Delhi has ocasioned as a necessary incident of the order of the publishing house and, consequently, it is inter-State sale regardless of the facts that goods aresupplied and invoiced from depot of DPM at Delhi see also Indian Oil CorporationLtd. v. Union of India [1981] 47 STC 1(SC).VI. 1. A company manufacturing silk yarn, had factory in Tamil Nadu. Government announced a scheme of allotment of silk yarn to weavers at a concessional rate. The weavers could enter into a contract with the company for supply of silk yarn to them on production of allotment cards which were issued to them by theGovernment. On doing so, the company sent silk yarn to its depot in Maharashtra where its selling agents sold it to the allottees in the state of Maharashtraonly. The companys contention was that this was only a case of stock transfer, butthe Supreme Court held that it was not stock transfer but was an inter-State sale since goods were sent from Tamil Nadu to Maharashtra in pursuance of terms ofcontract only. Had the goods been otherwise sent from Tamil Nadu to Maharsshtra depot from where the goods were further sold by the selling agents in Maharashtra, the transfer of goods from Tamil Nadu to Maharashtra would be termed as stock transfer- South India Viscose Ltd. v. State of Tamil Nadu [1981] 48 STC 232 (SC).VII. 1. X of Delhi goes to Y of Baroda for purchase of 1000 bales of cotton.The goods are ascertained and are ready for delivery at Ys godown at Baroda. Thesale shall take place in the State of Gujarat even if after taking delivery, X

takes cotton bales to Delhi. If goods are unascertained but are lying in Barodaand are also appropriated in Baroda e.g. packed in Baroda, the sale will also be deemed to have taken place in the State of Gujarat.


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VIII. 1. If goods leave the territorial waters of India and are shipped to aforeign destination, it will make the export complete, even if the goods do notfactually reach the destination. Where, however the goods are merely shipped toa foreign country, there being no destination specified this will not be considered to be sale in the course of export. In Burmah Shell Oil Storage & Distributing Co. of India Ltd v. CTO [1960] 11 STC 764, the company supplied aviation fuel to foreign going aircraft at the airport, as there was no destination of goods

in foreign country, it was not treated as a sale in the course of export.IX. 1. X of Faridabad agrees to send goods to Y of USA and goods are sent byair/sea to USA. The sale in this example is deemed to take place in the courseof export of goods out of territory of India.X. 1. If X of Delhi books his goods by air to his branch office abroad (there being no contract of sale) and subsequently transfers the documents of titleto buyer abroad after the goods have crossed the customs frontiers of India, this will be a sale in the course of export.XI. 1. X an export house, of Delhi first enters into a contract of salewith Y of London and subsequently purchases these goods from Z of Kanpur for the purpose of export abroad. The sale by Z to X (the export house) which is thelast sale before export shall be termed as sale in the course of export. Conver

sely, if contact of sale or purchase of goods to a foreign buyer is made at a future date, i.e. at a date after the goods have been sold to an export house, this sale will be subjected to sales tax.XII. 1. Where an importer imports goods, transfers the documents to a buyerin India and the buyer clears the goods from the customs, this is sale during import. The documents have to be transferred to the buyer by the importer beforethe goods are cleared from the customs.

If, however, an importer imports the goods, and subsequently sells them(after obtaining clearance from customs) to buyer in India, this is not sale inthe course of import and is, therefore, subject to tax under central sales tax.For instance, where X of Delhi purchases goods from Y of London through transfer of documents of title e.g. while the goods are in transit from London to Delhi, this will be considered as purchase in the course of import. If these goods a

re resold by him to Z, while the goods are still in transit, it will be termed as sale in the course of import. If however, he sells these goods after customsclearance, this will not be sale in the course of import.XIII. X of Delhi places an order of 1000 bales of cotton with Y of Bombay. Y dispatches the goods and sends railway receipt to X. X sells an identical quantity of cotton to Z of Amritsar. He endorses the railway receipt (sent byY) in favour of Z and re-routed the goods to Amritsar. In this case, if otherconditions are satisfied, the sale of goods by X to Z is exempt from the centralsales tax. If however, X takes delivery of cotton bales at Delhi and then books these goods to Amritsar in pursuance to his sale to Z, the sale from X to Z cannot be subsequent sale as it is not effected during the movement of goods from one State to another (it is effected after the movement of goods comes to an end).XIV. Discuss whether registration is required in the following cases under section 7 of the CST Act state the advantages if registration is required-Name & State of Dealer Purpose of purchasing goods State from which goods are purchased State in which goods are soldX of Delhi Resale Delhi DelhiY of Delhi Resale Delhi Harayana And DelhiZ of Delhi Resale Punjab DelhiA of Delhi Resale Punjab RajasthanB of Delhi Manufacture and sale Delhi DelhiC of Delhi Manufacture and sale Delhi Rajasthan and DelhiD of Delhi Manufacture and sale Rajasthan Delhi

E of Delhi Manufacture and sale West Bengal Punjab


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*Compulsory registration compulsory registration is required if goods are sold outside the State or if sale is made in inter-State trade or commerce. ThereforeY, A, C and E are required to get compulsory registration under the CST Act.

A and E make inter-State purchases of goods for resale/manufacturing. They will get an additional advantage of registration. They can purchase goo

ds at 2 per cent central tax if C Form is submitted to the seller.Voluntary registration In the other cases, the dealers can apply fo

r voluntary registration X and B will not be able to take any advantage of voluntary registration as they purchase goods from and sell the same (or after manufacturing) within the same State. However Z and D purchase goods from outside Delhi. In their cases, registration will be beneficial as inter-State purchases can be made at 2 per cent central sales tax if C Form is submitted.XV. E1 From the information given below ascertain whether registration is required-1. X of Bombay purchases goods from Indore for domestic use.2. Y of Bombay purchases goods from Bombay for domestic use.3. Z of Bombay purchases goods from Bhopal for selling the same in Goa, Guj

arat and Bombay.4. A of Bombay purchases goods from Patna for selling the same in Bombay5. B of Bombay purchases goods from Bombay for selling in Bombay.6. C of Bombay purchases goods for selling in Goa.XVI. Section 14(iv) specifies iron and steel as declared goods. Entry iron andsteel has 16 sub-entries, some of which are reproduced below :

Sub Entry (iv) - Steel bars (round, rods, squares, flats, etc.)Sub-entry (xv) Wire rods and wires (rolled, drawn, galvanized, alum

inized, tinned or coated).If a company purchases wire rods from a State (which imposes tax @ 4 per

cent) and manufactures steel wires to sell in the same State sale of steel wires will not be subject to tax again as both input and output pertain to the same sub-entry (xv) of main entry iron and steel Telengana Steel Industries v. state

of Andhra Pradesh [1994] 93 STC 187 (SC). If, however, steel wires are manufactured out of steel bars, the sale of wires shall be taxable even if tax has oncebeen paid on steel bars.XVII. The table given below highlights the requirement of submission of Forms E-I

and E-II:

Inter-State saleSelling dealerPurchasing registered dealer/GovernmentFormsE-I/E-II

Form C/D Is it chargeable under the CST Act.First sale X of Delhi Y of Jaipur X will submit Form E-I to YX should obtain Form C from Y Yes.Second sale (which takes place during movement of goods from Delhi and Jaipur)Y of Jaipur

Z of Baroda Y will give Form E-II to Z Y should obtain Form C from Z No.Third sale (which takes place during goods movement from Jaipur to BarodaZ of Baroda A of Bombay(a Government department)

XVIII.Place where the central sales tax will be collected


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If the second and third salesAre exempt as stated If second and third sales are not exempt as the relevantconditions are not satisfied

First sale Delhi DelhiSecond sale Exempt RajasthanThird Sale Gujarat

XIX. Pl During 1998-1999, the gross inter-state sales made by X Ltd. of Ajmeris Rs. 47,86,000. Although the central sales tax is not shown separately, the following information is available from the records of the company 1. The company sells machinery which makes copper wire rods. If it is soldin the Rajasthan State, sales tax rate is 7 per cent (plus additional tax @ 10%of sales tax)2. Information regarding sales with and without C Form is as follows :

Inter-State sale with C Form Inter-State sale without C FormGross sales 29,50,000 18,36,000It includes the following-

Excise duty 12,75,000 4,10,000Freight (not being shown separately) 37,000 48,000Freight (shown separately) 70,000 17,000Packing charges 15,210 19,700Cost of installation (shown separately) 92,000 1,06,000Insurance charges to cover the risk of the seller 10,500 15,200Insurance charges for covering the risk of buyer at the request of the buyer15,000 84,000The following items have not been deducted to calculate gross sales turnoverTrade discount (given by way of credit note on March 31, 1999) 18,000 20,000Goods returned within 6 months 2,00,000 1,00,000Incentive bonus for additional sale 25,000 20,000Ascertain the sales turnover and central sales tax payable

XX. It shall be calculated ad under -Inter-State sale with C Form

Rs. Inter-State sale without C Form Rs.Gross sale turnover 29,50,000 18,36,000Less :Excise duty (not to be deducted) -- --Freight not shown separately (not to be deducted -- --Freight shown separately 70,000 17,000Packing charges (not to be deducted) -- --Cost of installation shown separately 92,000 1,06,000Insurance charges for covering the risk of seller (not to be deducted) ----Insurance charges in respect of insurance cover taken at the request of buyer15,000 84,000Trade discount (as it is not deducted from gross turnover, it shall be deducted)18,000 20,000Goods return within 6 months 2,00,000 1,00,000Incentive bonus for additional sale (not to be deducted from sale price)-- --Aggregate sale price [total : Rs. 40,64,000] (a) 25,55,000 15,09,000Local sales tax rate (7% + 10% of 7%) 7.70% 7.70%Central sales tax 4% 10%Central sales tax [i.e.4/104 of Rs. 25,55,000; 10/110 of Rs. 15,09,000](b)98,269 1,37,182

Sales turnover [(a)-(b)][total Rs. 38,28,549] 24,56,731 13,71,818

1. The dealer had his office in Delhi and factory in the state of Haryana.


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The office at Delhi booked the order and intimated the Haryana factory to manufacture the goods as per the buyers specification. Later on, the factory manufactured the goods and sent them to Delhi office in order to deliver the goods to theultimate purchaser. It was held that goods moved from Haryana to Delhi as a necessary incident of the contract of sale and therefore the sale is covered by section 3(a) [Pandit Bros. Vs. State of Tamil Nadu (50 STC 67)(Delhi) as well asSahani Steel and Press Works Ltd. vs. C.T.O. (60 STC 301) (SC)].

2. A bidder from Bombay was successful in his bid at an auction sale at Madras. On payment of the price quoted, the purchaser asked the assessee to deliver the goods at Bombay. In this case, the movement of goods was a necessary incident of the sale although the sale itself did not provide for such despatch. Accordingly, such sale was held as an inter-State sale as held by the Madras HighCourt [M/s. National Mineral Development Corpn. Vs. State of Tamil Nadu (67 STC1)].3. Suppose a buyer takes the delivery of goods in State A itself and withoutthe sellers association moves the goods to State B. There is no implied or express condition for such movement. In this case, the sale is complete in state A itself. The movement of goods from state A to B has no connection with the contract ofsale. Therefore, this is an intra-State; i.e., local sale and not inter-State s

ale.4. A dispatches goods by railway from one state to another, showing consignorand consignee in the railway receipt as self. B pays the price of the goods and A eorses the railway receipt in favour of B who takes the delivery from railway at the destination. Here, the inter-State movement is not the result of the contractof sale between A and B nevertheless, a sale has been effected after such movementhas commenced but before it ended by transfer of railway receipt. Therefore, this is a sale falling under section 3(b).

Another example may be, where A from Mumbai has sold goods to B of Ahmedabad and has accordingly dispatched goods to Ahmedabad by lorry. In lorry receipt the consignor will be A and consignee will be B. Now B instead of taking deliry, sells the said goods to C on payment and therefore transfers the said lorry receipt in favour of C. This is also an inter-State sale by transfer of documents of

title to goods during course of movement from B to C. Of course, this is subsequent inter-State sale, where first inter state sale is between A and B5. A sold and dispatched goods to B. The bill of lading was marked as the goodsbeing deliverable to A or order along with the bill of exchange for value which was forwarded to As bankers with a direction to endorse the bill of lading only on payment of price by B. Here, the appropriation of goods made by A on dispatch isa conditional one. Nevertheless, it is made by A in his state and the situs ofsale is fixed in his state.6. The term export has been discussed in M/s. Burma Shell Oil Storage and Distributing Co. of India Ltd. vs. Commercial Tax Officer (11 STC 764). The Supreme Court held that the export requires a definite destination out of the country. The above company sold aviation spirit to international airplanes at Calcuttaairport. This sale was not in the course of export since the spirit was meantfor use in journey and there was no definite destination for the export of suchspirit.7. M/s. K.G. Khosla & Co. Pvt. Ltd. vs. Deputy Commissioner of C.T. (17 STC473)(SC). The appellants entered into a contract with D.G.S. & D., a Governmentbody to sale them axle box bodies. These axle box bodies were to be manufactured in Belgium according to the specifications of D.G.S. and D. The buyers representative at London was to inspect the goods at works in Belgium as well as in theport of destination; i.e. Madras. The goods were liable to be rejected if theywere not in conformity with the specifications of D.G.S. & D. The court heldthat the manufacture and importation of goods from Belgium to Madras was pursuant to the contract between the appellants and D.G.S. & D. and the goods were incapable of being diverted for any other purpose. Therefore, both the two sales,

i.e. first between foreign seller to K.G. Khosla and second from K.G. Khosla toD.G.S. (Ahd.) were held to be a part of an integrated transaction and the saleby M/s. K.G. Khosla & Co. was held to be in the course of import.


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8. (60 STC 310)(SC) in case of Dy. Com. Of S.T. vs. Indian Explosives Ltd. here, the assessee entered into contract with several parties to import some chemicals on their behalf. These parties were allotted import entitlements on the basis of their export performance. Although the assessee entered into contract with foreign party in his own name, he acted purely as an agent of the local parties. The property in goods never passed in him since import licences were in the name of the parties who alone could import the goods. This transaction was tr

eated as agency transaction and therefore, not liable to tax.9. It may be noted that every small thing done to the goods purchased, to make them exportable does not disqualify the sale to be exempt u/s 5(3). For example, the Supreme Court has held that the processes of cutting heads and tails ofshrimps, prawns and lobsters, peeling and divining them and cleaning, freezing them for the purpose of export do not alter their commercial identity and therefore, exemption u/s 5(3) was available for the last sale [M/s. Sterling Foods vs. State of Karnataka (63 STC 239)].10. A from Maharashtra sells goods to B in Gujarat who in turn endorses the transport receipt and advises transporter to deliver the said goods to C in Maharashtra, this second sale is also in the course of inter-state trade and will becovered by section 6(2) if other conditions are fulfilled. Here though physical

ly goods have not gone outside to Maharashtra still it will not affect the transaction.11. A similar situation may arise when the first sale is effected by the personin the same state. If A and B in the above example are in the state of Maharashtra and B instructs A to deliver the goods to his customer C in Gujarat, both the sales are in the course of inter-state trade and the second sale by B to C qualifies to be exempt u/s 6(2) provided conditions are met.12. In case of State of Gujarat vs. Haridas Madhavji (84 STC 317), (Guj.), Gujarat High Court has an occasion to deal with such kind of transaction. The dealer in Gujarat got an order for supply of goods from another dealer in Gujarat. For the purpose of said supply the Gujarat party placed order on dealer in Maharashtra to supply the said goods and the goods were instructed to be delivered directly to its purchaser customer in Gujarat. The Gujarat authorities were of the

view that the transaction of supply by one seller in Gujarat to purchaser in Gujarat is a local transaction liable to tax under local Sales Tax Act. High Court held that the transaction is inter-state sale transaction originating from Maharashtra. Analysing the position High Court held that the first transaction byseller in Maharashtra to purchaser in Gujarat is a transaction covered by section 3(a) of the Act and the subsequent sale by Gujarat purchaser to his customer in Gujarat is a transaction covered by section 3(b) of the Act. High Court heldthat there was notional transfer of documents, even though there was no physicalendorsement on the documents.13. In the case of Sahaney Steel & Pressing Works (60 STC 301)(SC), branch accepted the orders and transmitted the same to its manufacturing units in other state. The goods were manufactured as per order of the customer and then they were dispatched to branch. Branch took delivery of goods from carrier and delivered them to the ultimate purchaser. On above facts, Supreme Court held that themovement of goods from the state in which they were manufactured is pursuant tosale and hence liable to Central Sales Tax in that State.1. (a) From the following details, compute the central sales-tax payable by a dealer carrying on business in New Delhi:

Rs.Total turnover for the year which included

16,00,000(i) Trade commission for which credit notes have to be issued separately48,000(ii) Installation charges

25,000(iii) Excise duty

80,000


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(iv) Freight, insurance and transport charges recoveredseparately in the invoice

60,000(v) Goods returned by dealers within six months of sale,

but after the end of financial year.40,000

(vi) Central Sales tax

Buyers have issued C forms for all purchases.

Ans. (a)Rs. Rs.

Gross Turnover16,00,000

Less : Trade Commission48,000

Installation charges25,000

Freight, transport charges etc. shown separately 60,000Goods returned within six months

40,000 1,73,000Turnover including Central Sales Tax

14,27,000Central Sales Tax at 4% 4/104 x 14,27,000

54,885Turnover

13,72,115CST at 4% thereof

58,884.60

Or 54,885

(b). Mr. Vishal is a dealer. His sales during the first quarter of 1997-98 (April to June) are as under :

Date Invoice Nos.Amount Rs.

(i) 05-04-97 103/FCA/01/97 10,000 plus tax @ 4%(ii) 12-04-97 103/FCA/02/97 80,000 plus tax @ 4%(iii) 05-05-97 103/FCA/03/97 62,400 (inclusive of tax)(iv) 06-06-97 103/FCA/04/97 14,000 plusC.S.T.@ 4%(v) 27-06-97 103/FCA/05/97 18,000 plusC.S.T.@ 4%(vi) Goods worth Rs. 7,000 (exclusive of tax ) against Invoice No. 103/FCA/04/97 were returned on 29.06.97(vii) Goods worth Rs. 13,000 (inclusive of tax) sold on 26.12.96 were returnedon 30.06.97(viii) Goods worth Rs. 6,500 (inclusive of tax) sold on 27.12.96 were returnedon 30.06.97

All the above sales were made in the course of interstate trade. Calculate the turnover and sales tax payable if the rate of tax is 4%.

Ans. (b) First quarter (April 1997 to June,1997)Aggregate sale value (inclusive of Sales Tax)


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Rs.

Invoice No. 103/F.C.A./01/97/(10,000 + 4%) 10,400Invoice No. 103/F.C.A./02/97/(80,000 + 4%) 83,200Invoice No. 103/F.C.A./03/97 62,400Invoice No. 103/F.C.A./04/97/(14,000 + 4%) 14,560

Invoice No. 103/F.C.A./05/97/(18,000 + 4%) 18,7201,89,280

Less : Sales Return within 6 months 7,280

1,82,000Turnover = 100 X 1,82,000 = 1,75,000

100 + 4Sales Tax payable = 1,75,000 X 4/1000 = Rs. 7,000

Note : Goods returned beyond six months are not deductible. Hence amount of Rs. 13,000 and Rs.6,500 vide item No. (vii) & (viii) are not deductible.(c) Mr. A of Madras sends his consignment of goods to his branch at Bangalore

, without any prior contract of sale when the goods are in transit, Mr. B of Bangalore bought the railway receipt from A branch office. Does this amount to sale?Ans : The sale is tantamount to inter-State sale. It is a sale by transfer ofdocuments. As per Section 3(b) of the Act, a contract comes into existence af

ter commencement and before termination of the inter-State movement of goods. In the instant case, the Railway receipt is a document of title according to Section 2(4) of Sale of Goods Act, The endorsement of the same and by delivery enables the possessor of document to transfer or receive goods thereby represented.(d) State giving reasons whether the following Sales are Inter-state or Intra-state:(a) A manufacturer in Andhra Pradesh supplies goods to his appointed agentsoutside the State against their orders.(b) A manufacturer in Mumbai delivers goods to his dealers at the factory wh

o move the goods for resale outside the State.Ans : (a) In this case, the sales are inter-State sales since the movement of the goods from within the State of Andhra Pradesh to outside takes place in pursuance of the orders placed by the dealers outside that State.

(b) The sale will be an intra-state sale since the transaction is completed in

Mumbai and the goods are subsequently transported outside the State.

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