[tsql] How to improve a case statement that uses two columns

Just change your syntax ever so slightly:

CASE WHEN STATE = 2 AND RetailerProcessType = 1 THEN '"AUTHORISED"'
     WHEN STATE = 1 AND RetailerProcessType = 2 THEN '"PENDING"'
     WHEN STATE = 2 AND RetailerProcessType = 2 THEN '"AUTHORISED"'
     ELSE '"DECLINED"'
END

If you don't put the field expression before the CASE statement, you can put pretty much any fields and comparisons in there that you want. It's a more flexible method but has slightly more verbose syntax.