ORDER MRS. B. V. NAGARATHNA :- This revision petition is filed by the petitioner, which is a public limited company, by challenging the order dated August 6, 2007 passed in S.T.A. No. 2582 of 2004 for the assessment year 2001-02. The petitioner - company is a manufacturing unit engaged in the business of manufacture and sale of computer peripherals, i.e., printers, ribbons, UPS, etc. For the assessment year 2001-02 the petitioner declared his gross as well as net turnover under the Karnataka Sales Tax Act, 1957 (hereinafter, referred to as, "the KST Act") as well as under the Central Sales Tax Act, 1956 (hereinafter referred to as, "the CST Act") and also filed revised form No. 4 on December 1, 2003 by declaring the gross and net turnover under the KST and the CST Act. The respondent passed an order under section 12(3) of the KST Act read with rule 18(3) of the Rules and under section 9(2) of the CST Act and also issued notice in form No. 6 under rules 17A(2), 37 and 38 of the KST Rules on March 3, 2004. The respondent assessed the total taxable turnover and disallowed reimbursement of Rs. 19,36,999 claimed under section 5A of the KST Act by his order dated March 3, 2004. The petitioner also filed a rectification letter under section 25A of the KST Act on March 17, 2004. Being aggrieved by the order of the respondent, the petitioner filed an appeal before the Joint Commissioner of Commercial Taxes (Appeals), City Division, Bangalore challenging, inter alia, disallowance of reimbursement under section 5A as unjustified, by contending that the definition of "sale" encompasses branch transfer as per Explanation 4 of section 2(1)(t) of the Act. The Joint Commissioner, however, dismissed the appeal by order dated September 3, 2004 against which, an appeal was preferred before the Appellate Tribunal in S.T.A. No. 2582 of 2004 which was also dismissed by order dated August 6, 2007. Being aggrieved by the said order the petitioner has filed this revision petition by raising the following questions of law : "1. Being aggrieved by the said order the petitioner has filed this revision petition by raising the following questions of law : "1. Whether, on facts and in the circumstances of the case, the honourable Karnataka Appellate Tribunal was right in law in holding that the petitioner is not entitled to the benefit of reimbursement of purchase tax under section 5A of the KST Act even though the petitioner has used the goods so purchased for the purpose of the manufacture inside the State for sale ? 2. Whether, on the facts and in the circumstances of the case, the honourable Karnataka Appellate Tribunal was right in law in interpreting section 5A so that in order to be entitled to the benefit of reimbursement, the petitioner should not only manufacture within the State but also sell the manufactured goods within the State when section 5A merely requires that the petitioner shall manufacture goods inside the State for sale ? 3. Whether, on the facts and in the circumstances of the case, the honourable Karnataka Appellate Tribunal was right in law in not applying the ratio laid down in the case of Assessing Authority-cum-Excise and Taxation Officer v. East India Cotton Mfg. Co. Ltd. reported in [1981] 48 STC 239 (SC) that there is no requirement that the manufactured goods should be sold by the manufacturer himself for availing of the benefit of reimbursement of purchase tax ?" We have heard the learned counsel for the petitioner and the learned Additional Government Advocate for the respondent/State and perused the material on record. It is contended on behalf of the petitioner that the authorities concerned including the Appellate Tribunal were not right in holding that the petitioner had not made out a case within the provisions of section 5A of the KST Act by holding that in the instant case there was no sale of the manufactured goods within the State and that there was only stock transfer which is not a sale. He has also submitted that the petitioner had fulfilled the conditions stipulated under section 5A of the KST Act and that what is relevant is manufacture of goods inside the State for sale and it does not require that the sale should take place inside the State. He has also submitted that the petitioner had fulfilled the conditions stipulated under section 5A of the KST Act and that what is relevant is manufacture of goods inside the State for sale and it does not require that the sale should take place inside the State. According to counsel for the petitioner, in the instant case there was a sale by the petitioner/company and the said sale is not restricted within the State, but the goods were transferred to another branch in other States only for the purpose of sale. Therefore, the authorities concerned ought to have given the benefit under section 5A of the Act as the intention of the Legislature was to extend certain benefits with regard to component parts and consumables. Per contra, the learned Government Advocate has contended that in the instant case, the manufactured goods were sold not within the State but to the purchasers outside the State and that as between the petitioner/company in Karnataka and its other branches there was no sale as such but only stock transfer and therefore there was no compliance with the conditions mentioned under section 5A of the KST Act and the Tribunal, therefore, rightly disallowed reimbursement under the said section which order does not call for any interference in this revision petition. She has also relied upon the decisions of this court rendered in the case of Sipani Fibres v. State of Karnataka reported in [1993] 91 STC 261 and the case of B.V. Aswathaiah & Bros. v. State of Karnataka [2010] 31 VST 496 (Karn), which decision has referred to the decision in Hotel Balaji v. State of Andhra Pradesh [1993] 88 STC 98 rendered by the apex court to contend that since there has been no sale, the reimbursement cannot be granted to the petitioner - assessee under section 5A of the Act and therefore, the revision petition does not call for any interference by this court. Having heard counsel on both sides and on perusal of the material on record, the points that arise for our consideration are : 1. Whether in the instant case, the transaction in question is a sale or a mere stock transfer ? 2. Having heard counsel on both sides and on perusal of the material on record, the points that arise for our consideration are : 1. Whether in the instant case, the transaction in question is a sale or a mere stock transfer ? 2. If answer to point No. 1 is that the transaction in question is a sale, whether under section 5A of the KST Act any industrial input which is used to manufacture any goods inside the State has to be sold within the State only ? Before answering the said questions it is necessary to extract section 5A of the KST Act prior to the amendment of April 1, 2002, which reads as follows : "5A. Reimbursement of tax on industrial inputs. - (1) Where a registered dealer purchases any industrial input liable to tax under section 5 from another registered dealer for use by the former as a component part or raw material or packing material of any other goods which he intends to manufacture inside the State for sale or purchases consumables liable to tax under section 5 for use in such manufacture, he shall be eligible for reimbursement of tax, - (a) in respect of declared goods mentioned in column (2) of the Fourth Schedule, paid at a rate exceeding three per cent on the turnover relating to such purchase; (b) in respect of any other goods, paid at a rate exceeding two per cent on the turnover relating to such purchase. (2) Such amount shall be reimbursed to the registered dealer making such purchase, - (i) by adjustment towards tax payable by him for any month or year as the case may be, under the Act or the Central Sales Tax Act, 1956 (Central Act 74 of 1956), or the Karnataka Tax on Entry of Goods Act, 1979 (Karnataka Act 27 of 1979), in such manner and subject to such condition as may be prescribed; (ii) by refund in such manner and subject to such condition as may be prescribed : Provided further that such reimbursement shall be made only against a bill or cash memorandum issued by the seller showing separately the amount collected by way of tax : Provided also that if any dealer, after claiming reimbursement of tax on purchase of any inputs under the first proviso to this sub-section fails to make use of the whole or part of such inputs in the manufacture of other goods before the expiry of the accounting year immediately succeeding the one in which such inputs are purchased, either due to cessation of his manufacturing activity or for any other reason, but has not sold away such inputs, he shall be liable to pay the difference between the tax payable at the rate specified under section 5 and the tax computed at the rate of two or three per cent, as the case may be, on the turnover relating to the sale of such quantity of these inputs to him as have remained unutilised with him for the declared purpose at the end of the period specified above. (3) If any person, - (i) not having his manufacturing unit inside the State, purchases any inputs and claims reimbursement under sub-section (2), or (ii) having his manufacturing unit inside the State and claiming reimbursement on purchase of any inputs under sub-section (2), sells away such inputs contrary to such claim, the assessing authority, after giving such person, a reasonable opportunity of being heard, shall, by order in writing, impose upon him by way of penalty a sum, which shall not be less than double the amount of tax leviable under section 5 on the sale of the inputs so purchased, but which shall not exceed three times the amount of such tax; (iii) having his manufacturing unit inside the State and claiming reimbursement on purchase of any inputs under sub-section (2), uses such inputs contrary to such claim, the assessing authority, after giving such person a reasonable opportunity of being heard, shall, by order in writing, impose upon him by way of penalty a sum which shall not be less than twice the amount of tax leviable under section 5 but not exceeding thrice the amount of such tax on the inputs so purchased. (4) (a) Every dealer who, during the course of the year, claims reimbursement of tax on purchase of any inputs under sub-section (2), shall maintain in the prescribed manner a day-to-day account of the opening balance, purchases, consumption and closing balance of every input, which is purchased by him under sub-section (2). (b) If any dealer fails to maintain in the prescribed manner, true and complete accounts as required by clause (a) of this sub-section, the assessing authority shall, after giving such dealer a reasonable opportunity of being heard pass an order, - (i) disentitling such dealer from making use of reimbursement specified under sub-section (2); and (ii) imposing upon him a penalty not exceeding double the amount of tax leviable under the provisions of section 5 on the sale value of the inputs already purchased by him on which he has claimed reimbursement. (c) If any dealer, in respect of whom an order has been passed under clause (b) of this sub-section, pays the penalty and complies with other terms of such order, the assessing authority may, in his discretion, permit such dealer to claim reimbursement on purchase of inputs in the State. (c) If any dealer, in respect of whom an order has been passed under clause (b) of this sub-section, pays the penalty and complies with other terms of such order, the assessing authority may, in his discretion, permit such dealer to claim reimbursement on purchase of inputs in the State. Explanation I. - (1) For the purpose of this section, the expressions 'industrial inputs', mean either a 'component part' of 'raw material', or 'packing materials' but do not include cement, wood, bamboo, timber other than veneer, casuarina, eucalyptus, pulpwood and packing shooks and inputs falling under serial number 12 of Part S and serial number 10 of Part M of the Second Schedule. (2) The expression 'component part' means an article which forms an identifiable constituent of the finished product and which, along with others, goes to make up the finished product. (3) The expression 'raw material' means any material, - (a) from which another product can be made, through the process of manufacture, either by itself or in combination with other raw materials; or (b) a processing or any other chemical solvent (including chemicals used for testing, analysis or research) used in the solvent extraction process or a catalyst required in the manufacturing process, but it does not include fuels and consumable stores of similar type. (4) The expression "consumables" does not include petroleum products falling under serial number 11A of Part F, serial number 12 of Part M and serial number 5 of Part P of the Second Schedule. Explanation II. - For the purpose of this section, the expression 'tax payable', shall not include the tax payable under section 6B of the Act." Chapter 3 of the KST Act deals with incidence and levy of tax. Section 5 as it then stood states that every dealer shall pay for each year, tax on his taxable turnover at the rate of ten per cent at the point of first sale. Section 5A speaks about the reimbursement of tax on industrial inputs. Section 5 as it then stood states that every dealer shall pay for each year, tax on his taxable turnover at the rate of ten per cent at the point of first sale. Section 5A speaks about the reimbursement of tax on industrial inputs. It states that if a registered dealer purchases industrial input liable to tax under section 5 from another registered dealer for use by the former as a component part or raw material or packing material of any other goods which he intends to manufacture inside the State for sale or purchases consumables liable to tax under section 5 for use in such manufacture, he shall be eligible for reimbursement of tax at a particular rate. Section 5A(1) speaks of reimbursement under two circumstances, namely, when a registered dealer purchases any industrial input or the other dealer for use as a component part or raw material or packing material of any other which he intends to manufacture inside the State for sale and secondly, when he purchases consumables liable to tax under section 5 for use in such manufacture. Therefore, in the first instance the industrial input is used as a component part or raw material or packing material of any other goods which is intended to be manufactured inside the State for sale and in the second instance, consumables are purchased for use in such manufacture. The significant words are "to manufacture inside the State for sale", in the first instance, and in the second instance, for use in such manufacture with regard to consumables. In the instant case, we are not dealing with consumables but component parts intended to be used in the manufacture of other goods inside the State for sale. Therefore, the criteria are that the manufacture must be inside the State and the manufacture must be for sale and not for any other purpose and incidentally question would also arise as to whether goods manufactured inside the State must also be sold within the State for the purpose of section 5A of the Act. The said provision came up for consideration before a Division Bench of this court in the case of Sipani Fibres v. State of Karnataka reported in [1993] 91 STC 261, wherein the Division Bench held that the manufacture must be held inside the State and the said goods have to be manufactured for the purpose of sale. The said provision came up for consideration before a Division Bench of this court in the case of Sipani Fibres v. State of Karnataka reported in [1993] 91 STC 261, wherein the Division Bench held that the manufacture must be held inside the State and the said goods have to be manufactured for the purpose of sale. According to the Division Bench, if taxable goods are manufactured inside the State, though the said goods are not sold inside the State, but meant for sale anywhere, the benefit of section 5A(1) can be availed of by the dealer. If the purchaser of the industrial input had no intention at all to manufacture taxable goods "for sale", the furnishing of declaration in form No. 37 by him would amount to circumventing the provisions of section 5A(1). In the said case it was held that the buyer of the industrial input had no intention to manufacture HDPE tapes "for sale" as the buyer never "sold" any HDPE tapes and the manufacture of tapes by the buyer (dealer) was not meant for sale to anyone as HDPE tapes were at the most an intermediate product captively consumed in the manufacture of the fabric. The Division Bench further held as follows : "... The idea is to give the benefit of section 5A(1) to the industrial input meant to be used in the manufacture of goods in the State; the manufacture is to be inside the State; but said goods are to be manufactured for sale. If the manufacture is not for sale then section 5A(1) cannot be availed of, at all by the purchaser of the inputs. If taxable goods are manufactured inside the State, though the said goods need not be sold inside the State, but meant for sale anywhere, benefit of section 5A(1) can be availed of, by the dealers. 'Intention to manufacture inside the State for sale' are the crucial words, which cannot be ignored while construing section 5A(1). If taxable goods are manufactured inside the State, though the said goods need not be sold inside the State, but meant for sale anywhere, benefit of section 5A(1) can be availed of, by the dealers. 'Intention to manufacture inside the State for sale' are the crucial words, which cannot be ignored while construing section 5A(1). If the purchaser of the industrial input had no intention at all to manufacture taxable goods 'for sale', furnishing of a declaration in form No. 37 by him would be circumventing the provisions of section 5A(1) ..." The aforesaid ruling was in the context of levy of penalty under section 5A(2), for not adhering to the declared object of purchasing an industrial input for manufacturing a final product for sale and not a case concerning reimbursement of tax on industrial inputs. According to the petitioner it is in the business of manufacture of computer peripherals and raw material components which are used in the manufacture of finished products and it stock transfers its products to its other branches as finished products and for the raw materials and components used reimbursement was claimed. The question is whether the disallowance of the reimbursement with regard to stock transfer of goods on the ground that there was no sale as held by the authorities and the Tribunal is correct or not. In order to answer this question definition of "sale" has to be considered. Section 2(1)(t) of the KST Act defines "sale" which reads as follows : "2(1)(t) 'Sale' with all its grammatical variation and cognate expressions means every transfer of the property in goods (other than by way of a mortgage, hypothecation, charge or pledge) by one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration, and includes, - (i) a transfer otherwise than in pursuance of a contract of property in any goods for cash, deferred payment or other valuable consideration; (ii) a transfer of properly in goods (whether as goods or in some other form) involved in the execution of a works contract; (iii) a delivery of goods on hire purchase or any system of payment by instalments; (iv) a transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration. Explanation 1. Explanation 1. - A transfer of property involved in the supply or distribution of goods by a society (including a co-operative society), club, firm or any association to its members, for cash or for deferred payment or other valuable consideration, whether or not in the course of business, shall be deemed to be a sale for the purposes of this Act. Explanation 2. ... Explanation 3. - (a) The sale or purchase of goods (other than in the course of inter-State trade or commerce or in the course of import or export) shall be deemed, for the purposes of this Act, to have taken place in the State wherever the contract of sale or purchase might have been made, if the goods are within the State, - (i) in the case of specific or ascertained goods, at the time the contract of sale or purchase is made; and (ii) in the case of unascertained or future goods, at the time of their appropriation to the contract of sale or purchase by the seller or by the purchaser, whether the assent of the other party is prior or subsequent to such appropriation. (b) Where there is a single contract of sale or purchase of goods situated at more places than one, the provisions of clause (a) shall apply as if there were separate contracts in respect of the goods at each of such places. (c) Notwithstanding anything contained in the Sale of Goods Act, 1930 (Central Act 3 of 1930), for the purpose of this Act, the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract shall be deemed to have taken place in the State, if the goods are within the State at the time of such transfer, irrespective of the place where the agreement for works contract is made, whether the assent of the other party is prior or subsequent to such transfer. (d) Notwithstanding anything contained in the Sale of Goods Act, 1930 (Central Act 3 of 1930), for the purposes of this Act, the transfer of the right to use any goods for any purpose (whether or not for a specified period) shall be deemed to have taken place in the State, if such goods are for use within the State, irrespective of the place where the contract of transfer of the right to use the goods is made. Explanation 3A. - Every transaction of supply by way of or as a part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating) where such supply or service is for cash, deferred payment or other valuable consideration, shall be deemed to be a sale of those goods by the person making the supply and purchase of those goods by the person to whom such supply is made. Explanation 4. Explanation 4. - Notwithstanding anything to the contrary contained in this Act or any other law for the time being in force, two independent sales or purchases shall, for the purposes of this Act, be deemed to have taken place - (a) when the goods are transferred from a principal to his selling agent and from the selling agent to the purchaser, or (b) when the goods are transferred from the seller to a buying agent and from the buying agent to his principal, if the agent is found in either of the cases aforesaid, - (i) to have sold the goods at one rate and to have passed on the sale proceeds to his principal at another rate, or (ii) to have purchased the goods at one rate and to have passed them on to his principal at another rate, or (iii) not to have accounted to his principal for the entire collections or deductions made by him in the sales or purchases effected by him on behalf of his principal, or (iv) to have acted for a fictitious or non-existent principal ..." A reading of the said definition makes it clear that in a sale, the following components are essential : (i) Transfer of property in goods by one person to another person; (ii) To whom supply or delivery of goods is made in the course of trade or business; (iii) For cash or for deferred payment or other valuable consideration. The apex court in a series of decisions has held that to constitute a transaction of sale of goods, there must be a consensus ad idem with regard to the identity of goods; a transfer of title in the goods and followed by delivery of goods by transferor to the transferee. Consequently, the transferor would lose all right, title and interest in the goods. Therefore, there has to be a delivery of goods by the seller to the purchaser pursuant to the transfer of ownership of the goods which has to take place during the course of trade or business and for which there is a consideration fixed. In the instant case, the authorities including the Tribunal has held that there is stock transfer of the goods manufactured by the petitioner to its branches and that such a stock transfer does not come within the definition of the term "sale" under the Act. In the instant case, the authorities including the Tribunal has held that there is stock transfer of the goods manufactured by the petitioner to its branches and that such a stock transfer does not come within the definition of the term "sale" under the Act. According to the said authorities stock transfer of the goods in the instant case outside the State are otherwise by way of sale and therefore, reimbursement of tax is not permissible with regard to the goods which are the subject-matter of stock transfer and that if the sale has taken place within the State, then only the benefit of section 5A is applicable. However, on a reading of the judgment of this court in Sipani Fibres [1993] 91 STC 261 it becomes clear that the sale need not take place within the State. But the taxable goods have to be manufactured inside the State and have to be sold. Hence, if there is no sale, the benefit of section 5A cannot be given. Therefore, stock transfers cannot be considered as sale or purchase as they are not effected in pursuance of an agreement of contract or sale and they cannot also be considered as deemed sales as the company in the instant case cannot sell its goods to its own branches. In a transaction of sale there is always a transfer of property, i.e., transfer of goods ownership for a valuable consideration from one person to another person which does not occur in a case of stock transfer. In the case of ICI India Ltd. v. State of Orissa reported in [2007] 10 VST 1 (SC) while interpreting the fifth proviso to section 5(1) of the Orissa Sales Tax Act, 1947, the apex court has stated that where a registered dealer purchases goods of the class or classes specified in its certificate of registration as being for use within the State of Orissa by him in the manufacture or processing of goods for sale at a concessional rate of tax, but utilises the same for any other purpose or outside the State he shall pay the difference in the tax or the tax payable if he had not furnished the declaration. The apex court further affirmed that materials purchased must be used for manufacture of goods in the State "for sale" and that in the said case, the manufactured product "bulk premix", had not been sold by the appellant but had been transferred to other branches of the assessee situated inside as well outside the State and that the word "transfer" fell within the expression "any other purpose" in fifth proviso to section 5(1) of the said Act. As the goods had not been sold but had been transferred there was a violation of the terms of the declaration and the assessee was held liable to pay the differential sales tax on the raw materials purchased at the concessional rate. In this context, it is apposite to cite the case of B.V. Aswathaiah & Bros. (S.T.R.P. Nos. 56 and 57 of 2007) to which one of us is a party, disposed of on February 15, 2010 by a Division Bench of this court ([2010] 31 VST 496) wherein it is held that the revision petitioner therein cannot be said to have sold by consignment sales "unto himself inasmuch as if the consignment sales were to be 'sale' within the definition of section 2(1)(t) of the Act the same would have constituted a part of the total turnover". In the said decision, the judgment of the apex court in Hotel Balaji's case [1993] 88 STC 98 is cited as follows : "... The levy created by the said provision is a levy on the purchase of raw material purchased within the State which is consumed in the manufacture of other goods within the State. If, however, the manufactured goods are sold within the State, no purchase tax is collected on the raw material, evidently because the State gets larger revenue by taxing the sale of such goods (The value of manufactured goods is bound to be higher than the value of the raw material). The State Legislature does not wish to - in the interest of trade and general public - tax both the raw material and the finished (manufactured) product. This is a well-known policy in the field of taxation. The State Legislature does not wish to - in the interest of trade and general public - tax both the raw material and the finished (manufactured) product. This is a well-known policy in the field of taxation. But where the manufactured goods are not sold within the State but are yet disposed of or where the manufactured goods are sent outside the State (otherwise than by way of inter-State sale or export sale) the tax has to be paid on the purchase value of the raw material. The reason is simple : if the manufactured goods are disposed of otherwise than by sale within the State or are sent out of the State (i.e., consigned to dealers' own depots or agents), the State does not get any revenue because no sale of manufactured goods has taken place within Haryana. In such a situation, the State says, it would retain the levy and collect it since there is no reason for waiving the purchase tax in these two situations. Now coming to inter-State sale and export sale, it may be noticed that in the case of inter-State sale, the State of Haryana does get the tax revenue - may not be to the full extent. Though the Central sales tax is levied and collected by the Government of India, article 269 of the Constitution provides for making over the tax collected to the States in accordance with certain principles. Where, of course, the sale is an export sale within the meaning of section 5(1) of the Central Sales Tax Act (export sale) the State may not get any revenue but larger national interest is served thereby. It is for these reasons that tax on the purchase of raw material is waived in these two situations. Thus, there is a very sound and consistent policy underlying the provision. The object is to tax the purchase by a manufacturer of goods whose existence as such goods is put an end to by him by using them in the manufacture of different goods in certain circumstances. The tax is levied upon the purchase price of raw material, not upon the sale price - or consignment value - of manufactured goods. Would it be right to say that the levy is upon consignment of manufactured goods in such a case ? The tax is levied upon the purchase price of raw material, not upon the sale price - or consignment value - of manufactured goods. Would it be right to say that the levy is upon consignment of manufactured goods in such a case ? True it is that the levy materialises only when the purchased goods (raw material) is consumed in the manufacture of different goods and those goods are disposed of within the State otherwise than by way of sale or are consigned to the manufacturing dealer's depots/agents outside the State of Haryana ..." In Balaji's case [1993] 88 STC 98 the apex court was, inter alia, dealing with section 42E of the Gujarat Sales Tax Rules and went on to opine as follows : "Even if we agree with the appellants and read rule 42E along with section 15B, they cannot succeed. Rule 42E provides for set-off, etc., in case the manufactured goods are sold within the State of Gujarat. It no doubt means the set-off, etc., is not available if the manufactured goods are disposed of otherwise than by way of sale or are consigned to manufacturer's own depots (or to the depots of his agents) outside the State of Gujarat. What in effect the State says is this : 'Raw material when purchased is taxable but I won't tax the raw material if you sell the goods manufactured out of such raw material within the State because I derive larger revenue there; I do not want to tax both the raw material and the manufactured goods, in the interest of trade and public. But if you dispose of the manufactured goods in some other manner, I will tax the purchase of raw material because there is no reason why I should forego the purchase tax due to raw material, when I am not getting any revenue from your method of disposal or dispatch of manufactured products'. There is nothing objectionable in the State saying so. It can indeed rely on the principle of the decision of this court in Godrej & Boyce Mfg. Co. Pvt. Ltd. v. Commissioner of Sales Tax reported in [1992] 87 STC 186 (SC) ..." In the case of Godrej & Boyce Mfg. Co. There is nothing objectionable in the State saying so. It can indeed rely on the principle of the decision of this court in Godrej & Boyce Mfg. Co. Pvt. Ltd. v. Commissioner of Sales Tax reported in [1992] 87 STC 186 (SC) ..." In the case of Godrej & Boyce Mfg. Co. Pvt. Ltd. v. Commissioner of Sales Tax reported in [1992] 87 STC 186, the apex court, while dealing with rules 41 and 41A of the Bombay Sales Tax Rules, 1959 and section 18B of the Bombay Sales Tax Act, 1953 dealing with exemptions, set-off and compensation held that a manufacturing dealer pays tax when he purchases raw material and he is again obliged to pay the sales tax when he sells the goods manufactured by him out of the said raw material. Tax on both the transactions has the inevitable effect of increasing the price to the consumers besides adversely affecting the trade. It is for this reason that the aforesaid Rules enable the manufacturing dealer to claim set-off of the tax paid by him on the purchase of raw materials from out of the tax payable by him on the sale of goods manufactured from out of the tax payable by him on the sale of raw material. The rule further provides that in respect of manufactured goods despatched by the manufacturing dealer to his own place of business or to his agent outside the State and actually sold there, the amount of set-off shall be reduced by one per cent of the sale price of the goods so despatched. This is the result flowing from a combined reading of clause (e) of rule 41 read with the Explanation and the proviso appended to the Explanation. Same is the position flowing from the relevant portions of rule 41A of the Bombay Sales Tax Rules made under the Bombay Sales Tax Act. In the aforesaid case, the facts were that the manufacturing dealer purchased raw material both outside the State of Maharashtra as well as within the State. The State of Maharashtra could collect tax only in respect of purchases made within the State. So far as sales tax was concerned, with regard to the sale of the goods manufactured by the dealer of State of Maharashtra could levy sales tax in respect of sales made within the said State. The State of Maharashtra could collect tax only in respect of purchases made within the State. So far as sales tax was concerned, with regard to the sale of the goods manufactured by the dealer of State of Maharashtra could levy sales tax in respect of sales made within the said State. It could not levy or collect tax in respect of tax which was despatched by the dealer to its branches and agents outside the State of Maharashtra and sold there. The apex court held that the right to claim set-off of the purchase tax paid by him was on his purchases within the State from out of the sales tax payable by him on the sale of the goods manufactured by him. It is only by virtue of the said Rules which as stated above, are conceived mainly in the interest of public that he is entitled to such set-off. It is really a concession and an indulgence shown by the State and that when the manufactured goods were not sold within the State of Maharashtra, but were despatched to out-State branches and agents and sold there, no sales tax can be or is levied by the State of Maharashtra. The State of Maharashtra gets nothing in respect of such sales effected outside the State. In respect of such sales, the rule-making authority could well have denied the benefit of set-off. But it chose to be generous and has extended the said benefit to such out-State sales as well, subject to deduction of one per cent of the sale price of such goods sent out of the State and sold there. Therefore, the apex court in the said case clearly held that the State of Maharashtra had no legal right to collect sales tax in respect of sales made outside the State of Maharashtra, but by virtue of rules 41 and 41A of the Bombay Sales Tax Rules, a concession was shown and a set-off was given in respect of out State sales as well which was a generous benefit extended by the State. Therefore, on a reading of the aforesaid judgments of the apex court it becomes clear that with regard to sales made within the State and in respect of which sales tax was remitted, the benefit of reimbursement of purchase tax to the manufacturing dealer under section 5A of the KST Act is applicable. Therefore, on a reading of the aforesaid judgments of the apex court it becomes clear that with regard to sales made within the State and in respect of which sales tax was remitted, the benefit of reimbursement of purchase tax to the manufacturing dealer under section 5A of the KST Act is applicable. In fact, section 5A(1) of the KST Act itself says that the reimbursement is on the turnover relating to the purchase and that such amount shall be reimbursed to the registered dealer by making adjustment towards tax payable by the dealer for any month or year as the case may be under the Act or the Central Sales Tax Act or the Karnataka Tax on Entry of Goods Act, 1979 and such reimbursement shall be made only against a bill or cash memorandum issued by the seller showing separately the amount collected by way of tax. If the aforesaid principle as stated by the apex court is applied to the present case, then, not only the manufacture has to be within the State, but manufactured goods must be also sold within the State. This proposition is contrary to what is stated in the case of Sipani Fibres [1993] 91 STC 261 by a Division Bench of this court, wherein it is stated that the goods manufactured within the State need not be sold within the State. Therefore, by following the decisions of the apex court, we have to hold that not only the manufacture but also sale of goods has to be within the State in order to claim reimbursement under section 5A of the KST Act. Thus, for the application of section 5A of the Act, the industrial inputs have to be used in the manufacture of goods within the State and the said goods have to be sold within the State and further, at the time of the sale of such finished goods tax under section 5 of the Act is leviable. It is only under the aforesaid circumstances that reimbursement of tax paid on the raw materials or industrial inputs can be claimed under section 5A of the Act. Hence, any disposal of goods otherwise than by way of sale within the State, namely, by way of stock transfer which do not amount to sale cannot be reckoned for the purpose of section 5A of the Act with regard to reimbursement. Hence, any disposal of goods otherwise than by way of sale within the State, namely, by way of stock transfer which do not amount to sale cannot be reckoned for the purpose of section 5A of the Act with regard to reimbursement. In fact, section 6A of the CST Act regulates transaction outside the State, in the context of inter-State sale when they do not amount to a sale or purchase. Further, inter-State sale of finished products also cannot be taken into consideration for the purpose of section 5A of the Act. The reason being that in order to obtain reimbursement of tax under section 5A of the Act vis-a-vis, the industrial inputs utilised in the manufacture of goods sold within the State, a necessary sine qua non is that the said finished goods should have been a subject-matter of levy of tax under section 5 of the KST Act, i.e., sold within the State. It is only then, the reimbursement under section 5A of the Act arises. From the aforesaid discussion what becomes apparent is that "stock transfer" or "a consignment sale" by an assessee who is a manufacturer does not come up within the definition of "sale" and in the instant case, it is held by all the authorities that stock transfer of the goods by the assessee does not come within the definition of "sale" and the petitioner is not entitled to the benefit of section 5A of the Act since there is no sale at all in the instant case with regard to the quantity of goods which are a subject-matter of stock transfer. However, such of the goods which are not a subject-matter of stock transfer and which come within the definition of "sale", then in that case, if the sale has taken place within the State of Karnataka, then applying the reasoning of the apex court in Hotel Balaji's case [1993] 88 STC 98, the petitioner would be entitled to the benefit of the provision under section 5A of the Act. The facts and the ratio in the decision of the apex court in Assessing Authority-cum-Excise and Taxation Officer, Gurgaon v. East India Cotton Mfg. Co. Ltd. reported in [1981] 48 STC 239 are not at all applicable to the present case. The facts and the ratio in the decision of the apex court in Assessing Authority-cum-Excise and Taxation Officer, Gurgaon v. East India Cotton Mfg. Co. Ltd. reported in [1981] 48 STC 239 are not at all applicable to the present case. In view of the foregoing reasons, it is held that the transaction in question, namely, mere stock transfer of goods by the petitioner is not a "sale" within the meaning of the KST Act. Hence plaintiff No. 1 is answered against the petitioner. It is a transfer to branch offices in different companies of the country and hence, the petitioner is not entitled to the benefit under section 5A of the Act. In view of our answer to point No. 1, it is not necessary to answer point No. 2 on the facts of the present case, except by stating that the observations of the Division Bench in the case of Sipani Fibres [1993] 91 STC 261 that the goods manufactured within the State could be sold even outside the State to get the benefit of section 5A of the KST Act is not in conformity with the decision of the apex court in the case of Hotel Balaji [1993] 88 STC 98 and Godrej & Boyce Mfg. Co. Pvt. Ltd. [1992] 87 STC 186 which decisions are binding on this court. In the result, the revision petition is dismissed by answering the question of law raised in this revision petition in favour of the Revenue and against the petitioner.