Important Case Laws distinguishing Inter State Sales and Local Sales

Posted on 08-05-2016        By ADMIN

Important Case Laws distinguishing Inter State Sales and Local Sales. 1 CST v.Lakhmi Ladha & Co. 77 STC 366(Bom) In this case Lakhmi Ladha & Co was manufacturer of Tarpaulins at Bombay. They entered into contract with Gujrat State Road Transport Corporation for supply of Tarpaulins to Ahemedabad. The goods were first transferred to Branch at Surat and that branch delivered the goods to the Transport Corporation. It was held to be inter-State transaction as the goods had moved from Bombay to Surat under a contract of sale. 2 State of Bihar v. Tata Engineering & Locomotive Company Ltd. 27 STC 127(S.C.) Tata Engineering & Locomotive Company Ltd. had agreement with the dealers stipulating that delivery of the vehicles will be made in the State of Bihar and the dealer had to remove the goods to place outside the State. TELCO delivered the vehicles against payment to the dealers in Bihar and this was held by Supreme Court as inter-State sale. 3 CST Delhi v. Motorades 89 STC 542(Delhi) Dealer in Delhi sold auto part to government departments of Himachal Pradesh and Haryana Governments. Vehicles sent from those state to Delhi, parts were fitted therein by the dealer and vehicles reached to purchasers and parts supplied approved orally. In this case Delhi High Court held that there is implied term that parts will move from Delhi to H.P. or Haryana and it was held as inter- State sale. 4 Sahney Steel Press Works Ltd. v. Commercial Tax Officer (1985)60 STC 301 (S.C.) While delivering this landmark judgment the apex court has observed that the movement of goods from the registered office in Hyderabad was occasioned by the order placed by the customer and movement was an incident of the contract and therefore from the very beginning from Hyderabad all the way until delivery to the customer it was an interstate movement even though the customer placed an order with the branch office and the branch office communicated the terms and specifications of order to registered office .

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