2026-VIL-982-TEL
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VAT High Court Cases

Central Sales Tax Act, 1956 - Classification of Stock Transfers as Inter-State Sales - Vehicles manufactured at factory in Andhra Pradesh were transferred to regional sales offices in other States. Appellant claimed exemption under Section 6A of CST Act, 1956 on ground that these were branch stock transfers. Tax authority disallowed exemption and treated them as inter-state sales under Section 3(a) of CST Act, 1956 - Whether stock transfers of vehicles from manufacturing unit to regional sales offices qualify for exemption under Section 6A of CST Act or constitute inter-state sales under Section 3(a) of CST Act, 1956 – HELD - The appellant's characterization of impugned transactions as branch stock transfers simpliciter is not acceptable. The function and effect of the APO document which originates in dealer-level demand is aggregated at central planning stage and directly triggers manufacture and despatch of vehicles to branch from which demand emanated is indistinguishable from an indent or purchase order. Data gathered at audit establishes concrete material that dealers placed firm orders on branches accompanied by advance payments before vehicles were despatched. The transactions bear all essential incidents of a pre-existing contract of sale occasioning inter-state movement of goods – The Form F declarations do not immunize transactions where material establishes that movement was occasioned by pre-existing contract of sale. The presumption raised by Form F is rebuttable and stands rebutted here by appellant's own admitted business practice read together with evidence gathered at stage of audit regarding advance orders and payments at branch level - The denial of exemption is sustainable both for non-compliance with statutory requirements and on independent ground that transactions satisfy ingredients of Section 3(a) CST Act - The impugned order is upheld. Transactions constitute inter-state sales and are exigible to tax – The writ petition is dismissed
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