Ramesh Ranganathan, JJ.

In these writ petitions, filed by Bharat Electronics Limited, Machilipatnam unit, the orders under challenge are the revisional orders passed by the first respondent under the Central Sales Tax Act, 1956 (the CST Act). W.P. No. 8258 of 2009 relates to the assessment year 2001-02, W.P. No. 9400 of 2009 to the assessment year 2002-03, W.P. No. 9414 of 2009 to the assessment year 2003-04, W.P. No. 9448 of 2009 to the assessment year 2004-05 and W.P. No. 9442 of 2009 to the assessment year 2005-06.

The facts in W.P. No. 9442 of 2009 (relating to the assessment year 2005-06) may be taken as representing the facts in this batch of writ petitions. The petitioner, a Central Government public sector undertaking engaged in the manufacture and sale of defence and scientific goods, has several units spread all over the country, i.e., Bangalore, Pune, Chennai, Kotdwara, Panchkula, Navi Mumbai and Machilipatnam. It is a dealer registered under the CST Act. At its Machilipatnam unit, the petitioner manufactures night vision devises, i.e., Hi-tech Electro Optic equipment, hand-held thermal imager, night vision goggles and binoculars, night scopes and integrated observation equipments, etc. The goods manufactured in the Machilipatnam unit are transferred to the Panchkula, Pune, Chennai and Bangalore units of the petitioner - company. It is the petitioner's case that these goods are not sold by the Machilipatnam unit but are only incorporated in the equipment manufactured at the other units, and are eventually sold therefrom to the end customers; and the respective units, which incorporate the components manufactured and transferred by the Machilipatnam unit, pay sales tax on the price of finished goods including the cost of components manufactured and supplied to them by the Machilipatnam unit.

The second respondent passed an order of assessment, for the year 2005-06, on April 8, 2008 exempting the turnover, representing such stock transfers, from levy of tax under the CST Act. The first respondent issued show-cause notice dated March 6, 2009 proposing to tax the turnover of Rs. 40,28,07,225, (which the petitioner had claimed to be the stock transferred from its Machilipatnam unit to other units of the petitioner - company located outside the State of A.P.), on the ground that they were inter-State sales from Andhra Pradesh to other States. The petitioner submitted a detailed reply on March 28, 2009 contending that the transactions were stock transfers and not inter-State sales. The first respondent passed the revisional order dated April 16, 2009 bringing the said turnover to tax holding that they were inter-State sales. Consequent to the revisional order of the first respondent dated April 16, 2009, the second respondent issued a revised assessment order dated April 20, 2009 demanding tax of Rs. 4,86,36,847.

Sri S. Ravi, learned senior counsel appearing on behalf of the petitioner, would submit that the goods manufactured by the Machilipatnam unit, and sent to other units of the petitioner - company located outside the State of A.P., were components such as hi-tech electro-optic equipment, hand-held thermal imager, night vision goggles and binoculars, night scopes and integrated observation equipments, etc., which form part of a larger machinery/unit manufactured by the units of the petitioner - company situated outside the State of Andhra Pradesh; the Machilipatnam unit did not enter into any contract with the Indian Defence Services/Para-Military forces; the units, where the final goods were manufactured, had entered into such contracts, and had paid tax on the sales effected by them; transfer of goods by the Machilipatnam unit, to other units of the petitioner - company located outside the State, did not constitute "sale" as the petitioner - company, a distinct legal entity, cannot be said to have sold goods to itself; movement of goods from within the State, to units situated outside the State, is not an inci