A sale or purchase of goods shall be deemed to take place inside a State if the goods are within the State-
- in the case of specific or ascertained goods, at the time the contract of sale is made
- in the case of unascertained or future goods, at the time of their appropriation to the contract of sale by the seller or by the buyer, whether assent of the other party is prior or subsequent to such appropriation.
Analysis
There are 3 types of goods in case of sales
Specific Goods
Goods identified and agreed upon at the time a contract of sale is made
Unascertained Goods
These goods are defined only by description and not identified and agreed upon at the time of contract.
Unascertained goods may be existing goods or future goods .
Ascertained Goods
When unascertained goods are identified as per sales agreement, they became ascertained
WHEN IS SALE WITHIN STATE
In case of Specific Goods or Ascertained Goods
Sale is local if the goods are within the State at the time the contract of sale is made
In case of Unascertained Goods
Sale is local if the goods are within the State at the time of their appropriation to the contract of sale by the seller or by the buyer
|
Type of Goods |
Meaning |
Sale is local if goods are within state |
|
Specific Goods
|
Goods identified and agreed upon at the time a contract of sale is made
|
at the time the contract of sale is made |
|
Unascertained Goods
|
These goods are defined only by description and not identified and agreed upon at the time of contract.
They may be existing goods or future goods .
|
at the time of their appropriation to the contract of sale by the seller or by the buyer
|
|
Ascertained Goods
|
When unascertained goods are identified as per sales agreement, they became ascertained
|
at the time the contract of sale is made |
Important Points
Section 4 is subject to the provisions of section 3. Provisions of section 4 would apply only when sales of goods is not an ‘inter-State sale’ under section 3.
If there is a single contract of sale or purchase of goods situated at more than one places, it shall be deemed that there are separate contracts in respect of the goods at each of such place to determine whether they are sales within state or not.
