Sale of Goods from Delivery Hub in Punjab to Customers of Punjab although brought from warehouse situated outside Punjab is inter-state supply

WS Retail Services (P.) Ltd. v Union of India (Punjab & Haryana)- where the assessee supplied goods to customer of Punjab, which it brought from its warehouse situated outside State of Punjab to its delivery hub located in Punjab and mentioned its TIN of Punjab in VAT- 36 return, it was held that the said supply shall have to be treated as inter-state supply.

As far as the present case is concerned, which is governed by the provisions of the Central Sales Tax, 1956 and the PVAT Act. It has been repeatedly held that irrespective of which state the property in the goods passes, a sale which occasions the “movement of goods from one State to another” is a sale in course of inter-state trade. All that is required is that the inter-state movement must be the result of the sale. It is not even necessary for the contract of sale to expressly state or provide for the movement of the goods from one State to the other. It can be implied from the contract itself. Nor is it necessary that the sale must precede the movement in order that the sale may be deemed to have occasioned such movement.

Full Text of the High Court Judgment / Order is as follows:-

1. Respondent Nos. 2 and 3 are the State of Punjab and the State of Karnataka. Respondent Nos. 4 and 5 are the Excise & Taxation Commissioner and the Excise and Taxation Officer-cum-Assessing Authority (ETO).

2. The petitioner seeks a writ of certiorari to quash two show cause notices dated 16.10.2014 and 05.06.2015, an assessment order dated 03.08.2015 and a demand notice dated 18.08.2015. The petitioner also seeks a writ of mandamus directing respondent No. 3- State of Karnataka to refund the Central Sales Tax (CST) collected from the petitioner.

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