ORDER DIPAK MISRA, J. - The petitioner, a registered company under the Indian Companies Act, 1956 carries on its business activities in the State of Madhya Pradesh which include cement manufacturing, trading, execution of turnkey project, etc. The company is a registered dealer under both the local and the Central Sales Tax Acts. The petitioner was assessed for the year 1992-93 under the Madhya Pradesh Commercial Tax Act, 1994 (for brevity "the 1994 Act") and the assessment order was passed on March 30, 1996 determining the tax liability at Rs. 6,15,38,551. The said liability was fastened on the assessee partly due to disallowance of labour charges and disallowance of claim on inter-State sale. A rectification order came to be passed on May 25, 1996 and the demand was reduced to Rs. 5,64,68,015. The rectification was carried out as certain factual error had occurred. Against the aforesaid order an appeal No. 387/97 was preferred before the Deputy Commissioner, Commercial Tax, Bhopal which was allowed by order dated April 20, 1998 and the case was remanded to the Commercial Tax Officer for reassessment. In pursuance of the order of remand the assessing officer, respondent No. 2, passed a fresh order on May 31, 2001 and the demand was reduced to Rs. 5,12,89,521. The demand was reduced due to full exemption allowed for labour charges but on reassessment the assessing officer did not allow any part relating to inter-State sales. Being aggrieved by the aforesaid order the petitioner preferred revision before the Additional Commissioner, Commercial Tax, Bhopal, in revision No. 158 of 2001. The Additional Commissioner disposed of the revision and directed to reassess the inter-State transaction keeping in view the various judicial pronouncements in view. Thereafter the Assistant Commissioner assessed the petitioner and allowed inter-State sales relating to transit sales but disallowed the direct inter-State sales of specific goods moved from outside the State of M.P. in pursuance of respective contracts and on these sales imposed tax under section 6 and assessed the petitioner to a sum of Rs. 2,04,16,245. Though there was no concealment or inaccurate particulars yet the assessing officer without affording opportunity to the petitioner imposed a penalty amounting to Rs. 3,06,98,368. It is put forth that the petitioner had already deposited the tax but penalty was imposed by the respondents. 2,04,16,245. Though there was no concealment or inaccurate particulars yet the assessing officer without affording opportunity to the petitioner imposed a penalty amounting to Rs. 3,06,98,368. It is put forth that the petitioner had already deposited the tax but penalty was imposed by the respondents. It is set forth that during the assessment proceeding on March 30, 1991 a certificate was filed under the Central Sales Tax Act, 1956 relating to various works contract executed in the State of Madhya Pradesh and further the movement of goods was exclusively in pursuance of such contracts from outside the State of M.P. Because of the aforesaid demand and penalty imposed the petitioner has preferred the present writ petition. It is contended that while disallowing a turnover of Rs. 17,01,35,378 relating to dispatch of specific goods of project requirement from outside the State of M.P., the assessing officer has ascribed two grounds, namely, turnover relates to goods dispatched from other States which the petitioner had treated such supply as stock transfer and second the turnover claimed as inter-State sale was effected from outside the State of M.P. without providing proof of its having been declared or liability discharged in other States. It is urged that the reasons ascribed by the authorities are contrary to the settled position of law inasmuch as supply was effected from outside the State of M.P. in course of inter-State trade or commerce is covered as a deemed sale under sub-clause (29A) of article 366 of the Constitution of India and, therefore, it is not liable to any tax under the sales tax laws of the State. The finding of the second respondent about the petitioner having dispatched the goods from other State on stock transfer basis cannot be held as an inter-State sale for the purpose of exclusion while computing the taxable turnover as inter-State sale would be decided exclusively under section 3(a) of the CST Act, 1956 where the movement of goods from one State to another is found to be in pursuance of a contract of sale. The assessing officer has fallen into error by treating the transaction as a sale in the State of M.P. As pleaded, the second respondent failed to take note of the definition of "sale" under section 2(g) of the CST Act that was substituted by the Finance Act, 2002 which has substantially widened the scope of the concept of deemed sale. That apart it is urged that respondent No. 2 has failed to appreciate the correct position of law applicable to assessment year 1992-93. A counter-affidavit has been filed by the respondents contending, inter alia, that the petitioner had submitted its return for the year 1992-93 and at the time of assessment it was found by the assessing authority that the so-called inter-State sale from four States, i.e. Orissa, Bombay, Uttar Pradesh, Haryana was not supported by the documents as on the basis of the documents which were submitted along with the return, it was not conclusively proved that the aforesaid transactions were by way of inter-State sale. The petitioner - assessee was directed to produce the required documents before the assessing officer but despite the sufficient opportunity being granted the petitioner failed to produce any documentary evidence in support of its stand. It was put forth by the petitioner before the respondents that the transaction being old the petitioner is unable to produce the documents. Regard being had to the stance taken in the return an investigation was carried out by the assessing officer to ascertain the correct position and it was found that transaction was a stock/branch transfer from factories of the petitioner in different States to its registered branches in the State of M.P. and the transactions were basically stock transfers. It is asserted that it was a transaction within the definition of "sale" under section 2(n) of the M.P. General Sales Tax Act, 1958 and accordingly the tax was imposed. It is further urged that the contention that the stance that the transaction in question is a inter-State transfer is not only misconceived but also misleading inasmuch as while transferring the goods from the State concerned to its registered branch in the State of M.P., the petitioner had shown the transfer as the stock transfer. It is further urged that the contention that the stance that the transaction in question is a inter-State transfer is not only misconceived but also misleading inasmuch as while transferring the goods from the State concerned to its registered branch in the State of M.P., the petitioner had shown the transfer as the stock transfer. In a proceeding of assessment that was carried out in the State of Orissa a plea was taken by the petitioner that it was not liable to pay tax as the transfer was branch transfer and it was not an inter-State sale. A copy of the assessment order passed by the competent assessing officer in the Orissa State has been brought on record as annexure R1. The assessing officer did not accept the contentions of the petitioner that the transfer was a stock/branch transfer treating it as a inter-State transfer and the tax was demanded from the petitioner. The petitioner, being aggrieved with the same, preferred an appeal and the appellate authority accepted the contention of the petitioner that it was a stock/branch transfer and consequently no tax was levied on the petitioner under the Central Sales Tax Act. It is put forth that the assessee - petitioner had taken the stand before the assessing officer that the transaction was in the nature of inter-State sale and they have paid the commercial sales tax and when proof was demanded no document was supplied. The petitioner had not produced the assessment orders of respective assessing authorities. The plea regarding payment of Central sales tax which was taken by the petitioner before the assessing officer had not been substantiated and as is manifest in the writ petition a new stand has been taken that even if it is a stock or branch transfer it is not liable to be taxed which clearly establishes that no Central sales tax was paid by the petitioner. It is contended that no evidence was produced before the assessing officer to show that the same was inter-State sale. The plea of delay has seriously been criticised on the ground that the petitioner had produced the documents relating to assessment year 1986-87 in Writ Petition No. 4411 of 2003 but in the present case for the assessment year 1992-93 the documents have not been produced stating that they were not available being very old. The plea of delay has seriously been criticised on the ground that the petitioner had produced the documents relating to assessment year 1986-87 in Writ Petition No. 4411 of 2003 but in the present case for the assessment year 1992-93 the documents have not been produced stating that they were not available being very old. It is the stand in the return that the assessing authority has imposed the penalty regard being had to the facts and circumstances of the case and the contentions raised by the petitioner and the stand in the writ petition that the assessee has been not afforded any opportunity of hearing before imposition of penalty is totally incorrect inasmuch as the petitioner has waived the right to receive the notice under section 43 read with rule 33 of the Rules and accordingly the penalty has been imposed. A rejoinder - affidavit has been filed contending, inter alia, that the petitioner has always taken a stand that it is an inter-State sale and various factors have to be adjudicated and taken note of for treating a transaction as inter-State sale but the same has not been done by the assessing officer. It is worth noting here that an application has been filed taking three documents, namely, copy of the assessment order dated December 31, 1993, copy of the order dated October 19, 2000 passed in appeal and the grounds urged in appeal before the Sales Tax Tribunal, Sundergarh, Orissa on record. The said documents are taken on record. I have heard Mr. H. S. Shrivastava, learned Senior Counsel along with Mr. Sandesh Jain and Mr. Akshat Shrivastava for the petitioner and Mr. Deepak Awasthy and Mr. Alok Pathak, learned Government Advocates for the State. The question that arises for consideration is whether the authorities below have correctly assessed the petitioner and justifiably imposed the penalty. I have heard Mr. H. S. Shrivastava, learned Senior Counsel along with Mr. Sandesh Jain and Mr. Akshat Shrivastava for the petitioner and Mr. Deepak Awasthy and Mr. Alok Pathak, learned Government Advocates for the State. The question that arises for consideration is whether the authorities below have correctly assessed the petitioner and justifiably imposed the penalty. The learned Senior Counsel for the petitioner has submitted that the order of assessment is contrary to the law laid down in Sahney Steel and Press Works Ltd. v. Commercial Tax Officer [1985] 60 STC 301 (SC); [1985] 4 SCC 173, State of Orissa v. IDL Chemical (P) Ltd. [2006] 147 STC 231 (Orissa), Oil India Ltd. v. Superintendent of Taxes [1975] 35 STC 445 (SC); [1975] 1 SCC 733, Indian Oil Corporation Ltd. v. Union of India [1981] 47 STC 1 (SC); [1980] Suppl SCC 426, Tan India Ltd. v. State of Tamil Nadu [2003] 133 STC 311 (Mad), Gannon Dunkerley & Co. v. State of Rajasthan [1993] 88 STC 204 (SC), State of Karnataka v. ECE Industries Limited [2006] 144 STC 605 (Karn), Desmet Chemfood Engg. Pvt. Ltd., Bombay v. Asstt. Commissioner of Sales Tax [1999] 32 VKN 121 and Pennwalt India Ltd. v. Divisional Deputy Commissioner [1999] 32 VKN 354. It is also urged by him that no notice to show cause was issued and, therefore, the order of penalty is vulnerable. The learned Senior Counsel has placed heavy reliance on the decision in South India Viscose Ltd. v. State of Tamil Nadu [1981] 48 STC 232 (SC) wherein it has been held as under : "If there is a conceivable link between the contract of sale and the movement of goods from one State to another in order to discharge the obligation under the contract of sale, the inter position of an agent of the seller who may temporarily intercept the movement will not alter the inter-State character of the sale." In this context we may refer with profit to the decision rendered in Pennwalt India Ltd. [1999] 32 VKN 354, wherein it has been held as under : "10. In the matter of Bharat Heavy Electricals Ltd. v. Union of India [1996] 102 STC 373, the Supreme Court has observed that the question whether a particular sale is an inter-State sale or intra-State though, essentially one of a fact, is not a pure question of fact inasmuch as the facts of a given case have to be examined in the light of the provisions contained in section 3 of the Central Sales Tax Act. Supreme Court further observed that it is a mixed question of fact and law. The Supreme Court further observed that if the agreement between the parties causes movement of the goods in another State then simple supply of the goods in the works contract in another State would not amount to an intra-State sale but it would form the character of inter-State sale. 11. In the matter of Orient Paper and Industries Ltd. v. State of M. P. [1982] 15 VKN 272, the Division Bench has found that the property passed when it was delivered in M.P. The movement of it to another State was incident under the contract. Therefore, the same was an inter-State sale. In the said matter certain bamboos were purchased for transportation to Brijrajnagar in Orissa. The petitioner of the said case was bound to take immediate delivery of bamboos made available by the Forest Department at the mutually agreed rail head depots in Madhya Pradesh for onward transportation to Brijrajnagar. The Division Bench found that the sale was falling under section 3 of the Central Sales Tax Act, 1956. The Division Bench was also of the opinion that if the movement of the goods from one State to another is under a covenant or incident of the contract of sale and the property in goods may pass in either State, then the same would be inter-State sale. It was further observed that the property might have passed in State of Madhya pradesh at the time of taking delivery but the movement of bamboos to Brijrajnagar in Orissa from Madhya Pradesh was an incident of the two contracts and sale was inter-State sale. The division Bench in view of its finding held that as the sale was inter-State sale, the State could not recover State sales tax. The said view was followed in the matter of Orient Paper and Industries Ltd. v. State of M.P. [1982] 15 VKN 272. The division Bench in view of its finding held that as the sale was inter-State sale, the State could not recover State sales tax. The said view was followed in the matter of Orient Paper and Industries Ltd. v. State of M.P. [1982] 15 VKN 272. In the said case this court observed that the tax can be levied only under statutory provisions and assessment is to be made under the statutory provisions. The court also observed that the covenant contained in agreement would in fact decide the liability of the parties. To the same effect is the judgment in the matter of Desmet Chemfood Engg. Pvt. Ltd. [1999] 32 VKN 121." From the aforesaid decisions cited at the Bar it is clear as day that a sale can be regarded as an inter-State sale if two conditions are satisfied, namely, sale of goods and second transfer of those goods from one State to another as a result or incident of the contract of sale, are satisfied. In the concept of inter-State sale or commerce there should be existence of such a bond between the contract of sale and the actual transportation outside the State so that each link is inseparably connected with the one immediately linked up with the sale and the question of disjunction or dissociation does not occur. In Shankerjee Raut Gopalji Raut v. State of Bihar [1968] 22 STC 241 the Full Bench of the Patna High Court has reviewed the case-law on the subject with regard to interpretation of the expression sale "in the course of import of the goods into, or export of the goods out of, the territory of India" which fully applies to the expression "in the course of inter-State trade or commerce". Thus, it is a matter of immense signification that to treat a sale as one in the course of inter-State trade there must be an obligation to transfer outside the State. The obligation is that of the seller or that of the buyer. The aforesaid obligation may ensure by reason of statute or contract between the parties or from mutual understanding or agreement between parties. This can also emanates from the nature of transaction which links the sale to such transaction. Such an aspect may not always be discernible from direct evidence and can be inferred from the circumstantial evidence. The aforesaid obligation may ensure by reason of statute or contract between the parties or from mutual understanding or agreement between parties. This can also emanates from the nature of transaction which links the sale to such transaction. Such an aspect may not always be discernible from direct evidence and can be inferred from the circumstantial evidence. In the case at hand, the learned Senior Counsel for the petitioner has submitted that the authorities below have exclusively been guided by the fact that the goods have moved in pursuance of the branch transfer and have been utilised in the works contract and, therefore, they can partake of the character of inter-State sale : Mr. Shrivastava has commended me to section 6A of the Central Sales Tax Act, 1956 to highlight the proposition that the burden is on the dealer to prove that any movement of goods from one State to another by the assessee or at his instance is the result of sale and for the purpose of discharging such burden the dealer is entitled to produce a declaration in the prescribed form duly filled and signed by the consignee or recipient of the goods though on the face of such burden cast, if being in the other State and the evidence of dispatch of goods. If the transferor discharges the burden of proof and assessing officer is not satisfied with the particulars and information furnished by the transferor he could proceed to verify the same after calling for further particulars. It is submitted by Mr. Shrivastava that the provisions come into play where the goods are sent by the head office to branches or by one person to another person for sale on consignment basis or by an agent to a principal or on stock-transfers, etc. It is urged by him that sales involved in a works contract follow the general principles to determine whether the sale is a "within State sale", "an inter-State sale" or and "ex-State sale". The learned senior counsel would submit that no distinction is made between sales simpliciter and sales involved in course of execution of a works contract after the Constitution (Forty-sixth) Amendment Act, 1982 on general rules and its nature and effect should be carried towards its logical end. The learned senior counsel would submit that no distinction is made between sales simpliciter and sales involved in course of execution of a works contract after the Constitution (Forty-sixth) Amendment Act, 1982 on general rules and its nature and effect should be carried towards its logical end. If the assessment order is tested on the decisions cited at the Bar and propositions put forth I am inclined to think that the matter requires re-scrutiny from various angles. As is patent, the assessing officer and the higher authorities who have affirmed the order of assessment have not addressed themselves appositely to the nature and character of the transfer in its very essentiality but have analysed the facts in a transient manner. There has to be keener probe and greater scrutiny. Be it noted, the assessee - petitioner has deposited the principal tax demanded. Regard being had to the facts and circumstances, I am inclined to set aside the order of the final authority and direct remit to the Board of Revenue to consider the matter from all spectrums by ascribing detailed reasons and scrutinising all the documents that have been brought on record and likely to be brought on record by the assessee as there should be no impediment in bringing further documents on record. Presently, I shall proceed to deal with the issue of penalty. I am obliged to state that the assessing officer as well as the higher authorities have proceeded on wrong premises with regard to imposition of penalty. It is well-settled in law that the penalty necessarily follows from the determination of tax and nature of transaction. Be it placed on record that it is the sacrosanct duty of the Tribunal and authorities to examine the relevant facts and appreciate the legal provisions while deciding such question. In the case at hand, the assessee - petitioner had been contending that the transactions are branch transfer and thereafter the goods were utilised in the works contract. The provisions of sections 3 and 6A of the CST Act, 1956 cannot co-exist simultaneously since the provisions are contra-indicative. The onus is on the department to show that the transaction is an inter-State sale while the onus is on the dealer to show that the transaction is a branch transfer. The provisions of sections 3 and 6A of the CST Act, 1956 cannot co-exist simultaneously since the provisions are contra-indicative. The onus is on the department to show that the transaction is an inter-State sale while the onus is on the dealer to show that the transaction is a branch transfer. Similarly for showing that the goods have been used in a works contract the necessary agreement either expressed or implied has to be looked into and scanned. While imposing penalty the show-cause notice was not given. A plea has been taken in the return there has been waiver. The concept of penalty has to be strictly construed and, therefore, the facet of imposition of penalty should not have been lightly dealt with by the authorities. The Board of Revenue the authority to whom the matter has been remitted shall look into all the said spectrums. In the result, the writ petition is allowed to the extent indicated above. There shall be no order as to costs.