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2015 (7) TMI 1004 - HC - VAT and Sales TaxClassification of sale - Inter state sale or intra state sale - timber sold through auction by the forest corporation - validity of Circular No. 1251, dated 5.10.1993 issued by the Commissioner of Sales Tax , U.P. Lucknow - Held that:- A sale of goods can be said to have taken place in the course of inter-State Trade or commerce under Clause (a) of Section 3 of the Act if it can be shown that the sale has occasioned the movement of goods from one State to another. - The word "occasions" is used as a verb and means "to cause or to be the immediate cause of". A transaction of sale becomes subject to tax on completion of sale. For a sale to be exigible to tax under the Act, it must be shown to have occasioned the movement of goods from one State to another and the movement must be the result of a covenant or incident of the contract of sale. Thus, the sale of goods is in the course of inter-State Trade if the sale and movement of goods from one State to another are integral part of the same transaction. There must exist a direct nexus between the sale and movement of goods from one State to another. - A movement of goods which takes place independently of a contract of sale would not fall within the ambit of the above clause (a) of Section 3 of the Act Clause 3 of the approval specifically provides that if the timber is not removed by the auction purchaser within the specified time or within a further period of 15 days on payment of late fees then the amount deposited by the purchaser shall be forfeited and the Forest Corporation shall also become the owner of the timber of the lots, kept in the depot. This indicates that the delivery to the petitioner of the timber auctioned was complete at the depot of the Forest Corporation on payment of the agreed amount of consideration. - auction by the forest corporation is an intrastate sale and not inter-state sale - Decided against assessee.
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