Cooperative Sugars (Chittur) Ltd. vs State Of Tamil Nadu on 13 April, 1993
15. The question as to whether a particular sale is an inter-State sale is a question of fact to be determined in the light of the statutory provisions. That question can also be regarded as a mixed question of law and fact in so far as the correct application of the relevant principles of law to these facts are concerned. A consideration of the factual background in which the decisions were rendered in other cases is not of much assistance in determining as to whether a particular sale is an inter-State sale or not. The essential tests to be applied are well-settled. Unless the movement and the sale forman integral whole, the sale cannot be an inter-State sale. A sale which ostensibly takes place within the State can be an inter-State sale if the movement is essential and inevitable, or necessary incidental, part of the sale transaction as held by the Supreme Court in the decision reported in [1993] 90 STC 1 [Co-operative Sugars (Chittur) Ltd. v. State of Tamil Nadu]. In that case, sugar purchased by the agent of the sugar factory situated in Kerala was normally be required to be transported to Kerala in terms of the Government Order, and could not have been diverted within the State. That sale was held to be an inter-State sale as there was an obligation on the buyer to whom the goods had been sold out to take the goods any of the State to its factory in the neighbouring State.