INDIAN OIL CORPORATION LTD. vs UNION OF INDIA

The Supreme Court ruled that the sale of naphtha from the Indian Oil Corporation's factory in Barauni, Bihar, to a fertilizer manufacturer in Kanpur, U.P., constituted an inter-State sale under Section 3(a) of the Central Sales Tax Act, 1956. The Court held that the movement of goods was initiated by a contract of sale, making it taxable only in Bihar, as per Section 9 of the Central Sales Tax Act. Consequently, the U.P. authorities lacked jurisdiction to impose sales tax under the U.P. Sales Tax Act.