2024-VIL-946-P&H

VAT High Court Cases

Central Sales Tax, 1956 - Inter-State Sales or stock transfer and Intra-State sales - Petitioner entered into an agreement with the Government of Bihar to supply Poshahar (energy food) under social welfare programs – petitioner’s Faridabad plant supplied the Poshahar to its Patna office, which was then distributed to various block offices in Bihar – Tribunal treated these transactions as inter-State sales and confirmed levy of tax - Whether the transactions between petitioner's Faridabad plant and Patna office should be treated as inter-State sales or intra-State stock transfers, and whether petitioner is entitled to a refund of the CST paid – HELD – As movement of goods took place from Faridabad to Patna and other branches for specific purpose in pursuance of a prior contract and specific formulation hence it being an inter-State sales - the Sales Tax Tribunal treated the transactions as inter-State sales, as the goods were moved from Faridabad to Patna pursuant to a prior contract of sale - the Poshahar supplied from Faridabad to Patna was in pursuance of a contract of sale already in existence. Only the goods rejected, being of inferior quality, could be returned or not paid for. There is no stock kept at Patna which could be said to be over and above the requirements of Government of Bihar. So far as the sales tax is concerned, the same was appropriately imposed by creating a demand - merely because the petitioner has been assessed by the concerned respective States for the local sales, it cannot absolve itself from the claim raised by the State of Bihar and the petitioner was required to pay the same – the writ petitions are dismissed but the company is granted the liberty to claim a refund of the CST paid to the States of Bihar and Uttar Pradesh, as per the Supreme Court's decision in Tata Motors Limited case - the writ petitions are dismissed

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