INSTALMENT SUPPLY PVT. LTD. vs SALES TAX OFFICER

The Supreme Court held that the State of Gujarat was entitled to levy sales tax on a hire purchase agreement where the sale was deemed to occur within the state upon the hirer's exercise of the purchase option, as per Section 2(28) of the Gujarat Sales Tax Act and Section 4(2) of the Central Sales Tax Act, 1956. The Court clarified that the location of the contract and payment in Delhi did not affect the taxability of the sale, which was completed when the goods were within Gujarat. The petition under Article 32 was dismissed, affirming the state's authority to tax sales occurring within its jurisdiction.