M/S. Aspick Engineering (P) Ltd. vs. State of Tamilnadu, [2013] 62 VST 216 (Mad),

FACTS
The petitioner company effected sale to the M/S. Vijayshree Colata Ltd., Warora, claimed it an inter-state sale. The assessing authority treated it as local sale as there was no written agreement, the goods were delivered locally, the price was ex-godown and the goods were moved out of the State by the buyer. The appellate authority including the Tribunal confirmed the assessment order. The appellant filed appeal before the Madras High Court against the order of the Tribunal upholding the assessment order treating it as local sale.

HELD
The terms of the agreement between parties are evidenced only by the dispatch details, indicative of the understanding between the parties. Given the fact that an agreement need not be in writing, the one and only ground on which the claim of inter-state sale could be considered is the factum of movement of goods pursuant to the contract of sale. If the sale effected by the assessee and the movement thereon are inextricably and intimately connected with each other, then the one and only interference that would flow from the same is that it is an inter-state sale. The fact that the purchaser has borne the insurance charges or the seller had born the insurance charges or that the purchaser had moved the goods at their own cost would not be a decisive factor for the purpose of determining the nature of sale as inter-State sale or not. The criteria for considering the transaction as an inter-state sale or not is the movement of goods intimately connected with the sale. The High Court further held that the Tribunal and the other authorities had misdirected themselves in placing emphasis on the transport and insurance made by the purchaser as indicators of the sale being local sale. With the movement and the sale inextricably connected, the High Court allowed the appeal and treated it as an interstate sale.