AIR 1981 SUPREME COURT 446 ::1980 TAX. L. R. 1795 ::1981 SCC (Tax) 95 ::1980 UJ (SC) 928 ::1980 U J (SC) 628 ::1980 STI 525 ::(1981) 47 STC 1 ::47 S T C 1 ::(1981) 1 SCR 673 (SC) ::1980 SCC (Supp) 426 ::1981 (1) SCR 673 ::1981 UPTC 557 ::1981 (UP) STJ 151

Supreme Court Of India

Hon'ble Judge(s): A. C. Gupta, S. Murtaza Fazal Ali, P. S. Kailasam , JJJ

Central Sales Tax Act (74 of 1956) , S.9, S.3— Inter-State sale or intra State sale - Determination ( Sale of naphtha by factory in Bihar to a factory in Kanpur (U.P.) - On facts held it was inter-State sale. The Indian Oil Corporation Ltd. (I.O.C.) engaged in manufacturing and making petroleum products have a refinery at Barauni in the State of Bihar and also a depot at Panki, Kanpur in U.P. At their Barauni refinery I.O.C. manufacture naphtha which is the principal raw material for production of fertilizers. An agreement was entered into by and between I.O.C. and Indian Explosives Ltd. who had a factory at Panki, Kanpur in U.P. manufacturing urea fertilizers in terms of which I.O.C. were to sell and Indian Explosives were to buy the entire quantity of naphtha required for the fertiliser factory. Held, that the terms of agreement make it quite clear that the sales of naphtha to Indian Explosives were inter-State sales. Under clause 4 of the agreement the seller was "to make the supply of naphtha to the buyer from its refinery at Barauni". The source of supply was thus the seller's refinery at Barauni in Bihar and the destination is the buyer's factory at Kanpur. This one clause alone was @page-SC447 sufficient to prove that the sales in question were inter-State sales.(Para 6) Secti....