20TH CENTURY FINANCE CORPN.LTD. vs STATE OF MAHARASHTRA

The Supreme Court examined the power of State legislatures to levy sales tax on the transfer of right to use goods under clause (29A)(d) of Article 366 of the Constitution. The Court held that a State cannot impose sales tax on such transfers solely based on the location of goods within the State if the contract was executed outside the State or if the sale occurred in the course of inter-State trade or import/export. The judgment clarified that the taxable event must be determined by the nature of the transaction rather than the location of the goods post-transfer.