--..._ The High Court of Madras on the interpretation of the afore·said provisions and having regard to the modus operandi of the respondent in respect of the inside sales or inter-state sales of cotton yam was of the view :-"Where the terms of a first sale are such that it may well be said to be an inside sale but it bea.ta also the characteristics of an inter-state sa!e, and, therefore, it has been taxed under the Central Act, that sale being physically a first sale inside the State out of which the inter-state sale has been carved out, it should follow that as the· ta"< levied on the interstate sale must prevail, there will be no tax liability on the same sale under the loca) Act on the ground that it is an inside sale". In this view it held that"when the goods pursuant to the interstate sale have been delivered outside the State but brought back into the State and then sold, that sale cannot in fact or in law be re11arded as the first sale within the meaning of the secor.d schedule to the local Act. It did not, however, think it necessary to · consider on the facts of the case "what the position will be when a sale is an inside sale withih the meaning of Section 4 of the Central Act and is also an inter-state sale, because it occasioned the movement of the goods to another State and out of the goods delivered outside the State pursuant to the inter-state sale, a part has been brought into the. State and sold again as an inside sale, in the sense that every incident including delivery is in the State". In our view, this question does not arise because what we have to consider is having regard to the course of transactions of sale which bas not been traversed by the appellant, whether the sale by the Madurai Mills pursuant to the orders placed by the respon• dent, the cotton yam sold to. its branches in Andhra Pradesh and Kerala in respect of which the price was paid in the State of Madras, is an inside sale, and also a fint sale in the State. It apPears to us that when the cotton yam was sold to the respondent in Madras as the goods were in the State of Madras when the contract of inter-state was entered into, it will be a first sale in the State. Once that sale bas taken place. and the goods were delivered in the States of Andhra Pradesh and Kerala, pursuant to that inter-state sale, there was no further sale to the resPon~ent when it transferred to its branches those goods which "have already been ~ubiect to tax in Madras nor caa such salea if they were sold in Madras be subject to tax.
