Desai, J.
1. The applicant in Sales Tax Reference No. 4 of 1981 (hereinafter referred to as 'the applicant-company') is a private limited company registered under the Companies Act, 1956. The applicant-company carries on the business of manufacturing and selling ferrous and non-ferrous metals at Bombay where it is registered as a dealer under the Bombay Sales Tax Act, 1959. The applicant-company is not carrying on any business and it has no place of business within the State of Gujarat.
2. The Western Railway authorities at Sabarmati in Ahmedabad, held a public auction for the sale of non-ferrous metal scrap by description through an auctioneer carrying on business at Bombay. The auction was held at Sabarmati in Ahmedabad on 13th March, 1973. At the said auction the applicant-company's bid to purchase the scrap at the rate of Rs. 11,280 per metric tonne being the highest was accepted. At the time of acceptance of the bid, the goods in question which were lying in the Sabarmati Railway Yard were not ascertained and specific and they were not in a deliverable state. Between 13th March, 1973, i.e., the day on which the auction was held, and 17th March, 1973, the applicant company instructed the railway authorities at Sabarmati to weigh the goods in question and to arrange for their delivery at Bombay. The railway authorities thereupon despatched the goods in question to the applicant-company in two lots by loading them in two motor trucks on one occasion, and in one motor truck on another occasion. Goods weighing 16,174 kgs. (as weighed on beam scale) were despatched in two motor trucks bearing Nos. M.R.R. 8564 and G.T.D. 5049 on 17th March, 1973. Goods weighing 3,826 kgs. (as weighed on beam scale) were despatched in motor truck No. G.T.A. 3128 on 27th March, 1973. According to the applicant-company, after the goods were loaded in the trucks and weighed for being despatched to Bombay, the price thereof was determined and paid by the applicant-company to the railway authorities. At the time of the despatch of the goods in the two above-mentioned lots, the railway authorities issued two 'sale issue notes', which, inter alia, mentioned the description of the goods, their quantity and value, and the name of the applicant-company as the purchaser. The sale issue notes were signed by an officer of the railway administration and by a representative of the applicant-company. The sale issue notes show that the railway administration recovered from the applicant-company only the price of the goods covered by each sale issue note and that no extra amount was charged for making arrangement for the despatch of the goods to Bombay. In the transport receipt which the transport contractors and commission agents issued in respect of the goods loaded in each truck on the two different occasions, the Western Railway, Sabarmati, Ahmedabad, was shown as the consignor, and the applicant-company was shown as the consignee. The transport receipts, which were on the record of the sales tax authorities and copies whereof are taken on the record of this reference as annexure 5 (colly.) with the consent of the parties, show that the freight was to be paid by the consignee at the destination. No charges for hamali are shown as recoverable from the consignee nor are they shown as having been paid by the consignor to the transport contractors. Admittedly, the applicant-company paid the transport charges for the carriage of the goods from Sabarmati to Bombay, and it accordingly got delivery of the goods at Bombay.
3. The Sales Tax Officer served upon the applicant-company a notice in form No. 45 requiring it to produce the relevant account books and to furnish the necessary information relating to the above-mentioned transaction. On receipt of the notice, the applicant-company filed an application before the Commissioner of Sales Tax at Ahmedabad under section 62(1) of the Gujarat Sales Tax Act, 1969 (hereinafter referred to as 'the Act'), for the determination of the following questions :
(1) Whether, on the facts abovestated, the applicant-company had purchased the said goods within the State of Gujarat or not
(2) Whether the applicant-company was a 'dealer' within the meaning of section 2(10) of the Act
(3) Whether the applicant-company was liable to pay any tax under the Act in respect of the above purchase and
(4) Whether the applicant-company was liable to be registered as a dealer under the Act
4. The applicant-company was heard by the Deputy Commissioner of Sales Tax, who, by his order of determination dated 19th April, 1978, answered in the affirmative all the questions set out above. In other words, the determination was entirely against the applicant-company. The view of the Deputy Commissioner was that the purchase of the goods in question was completed before they were loaded in the truck by the railway authorities under instructions of the applicant-company and that, therefore, the transaction of purchase must be regarded as having taken place within the State of Gujarat. The Deputy Commissioner was also of the opinion that the applicant-company was a 'dealer' in regard to the good in question within the meaning of sub-section (10) of section 2 of the Act, even though there was a single isolated transaction of purchase of such goods by or on its behalf within the territory of the State of Gujarat and that since the turnover of purchase had exceeded the relevant limit specified in sub-section (4) of section 2 of the Act, the applicant-company was liable to pay purchase tax under section 15 of the Act. The Deputy Commissioner further held that the applicant-company was required to be registered under the Act.
5. The applicant-company feeling aggrieved by the determination of the Deputy Commissioner, filed an appeal before the Gujarat Sales Tax Tribunal (hereinafter referred to as 'the Tribunal'). The Tribunal observed that in the absence of any contract of sale reduced into writing, the nature and character of the transaction in question was required to be determined on the basis of the materials on record. Having considered the relevant facts and circumstances, the Tribunal held that : (1) at the time of auction, the goods were neither ascertained nor weighed and that the precise price payable for them was not determined though the rate of purchase was agreed upon; (2) it was only on 27th March, 1973, that the railway authorities finally segregated and completed the weighment of the entire quantity of the goods sold and it was then ascertained that 20 metric tonnes of goods were purchased by the applicant-company at the auction held on 13th March, 1973; (3) the goods were actually appropriated towards the contract of sale only after they were loaded in the three motor trucks and weighed thereafter, and the property in the goods passed to the applicant-company not on the completion of the auction on 13th March, 1973, but on 27th March, 1973, when the entire goods were appropriated towards the contract and delivered to the transport contractors for their carriage from Sabarmati to Bombay; (4) before a completed sale came into existence accordingly, the applicant-company had instructed the railway authorities to arrange for the despatch and delivery of the goods at Bombay and the railway authorities appeared to have undertaken and actually done so far and on behalf of the applicant-company; and (5) the transaction in question was, therefore, a purchase of goods in the course of inter-State trade within the meaning of section 3(a) of the Central Sales Tax Act, 1956 (hereinafter referred to as 'the Central Act'). Be it stated that the Tribunal has found that there was no prior stipulation, express or implied, between the Western Railway and the applicant-company in the 'original contract' itself, providing for despatch or movement of goods from Sabarmati to Bombay, and that therefore, the movement of the goods was not the result of any such prior agreement. However, in the opinion of the Tribunal, since the applicant-company had instructed the railway administration between 13th March, 1973, and 17th March, 1973, before the sale was complete, to send the goods from Sabarmati to Bombay, and the Western Railway had, pursuant to such instructions, packed and weighed the goods after loading them in the trucks and despatched them to Bombay, there was a conceivable link between the movement of the goods from Sabarmati to Bombay and the contract of purchase. In the aforesaid view of the matter, the Tribunal held that the purchase of the goods in question was in the course of inter-State trade and that it was not liable to levy of purchase tax under section 15 of the Act. The Tribunal found in the alternative that if the disputed purchase was to be regarded as a local purchase governed by the provisions of the Act and not a purchase taking place in the course of inter-State trade or commerce within the meaning of section 3(a) of the Central Act, then the applicant-company was a 'dealer' within the meaning of section 2(10) of the Act in regard to the purchase of the goods in question because the transaction was in connection with its business within the meaning of section 2(4)(i) of the Act, and that on such turnover of purchase the applicant-company was liable to pay purchase tax under section 15 of the Act after allowing a deduction of Rs. 30,000. Even in such a case, however, according to the Tribunal, the applicant-company was not liable to be registered as a dealer under sub-section (1) of section 29 of the Act.
6. Both the applicant-company and the revenue felt aggrieved by the decision of the Tribunal and they preferred separate applications under section 69(1) of the Act requiring the Tribunal to refer to this Court certain questions of law stated to be arising out of its order. The Tribunal consolidated both those applications and heard them together and ultimately referred the following questions for the opinion of this Court, and those questions are the subject-matter of Sales Tax References Nos. 27 of 1980 and 4 of 1981 in which the State of Gujarat and the applicant-company are the applicants respectively :
'(1) Whether, on the facts and in the circumstances of this case, the Tribunal was right in law in holding that the goods which the assessee (applicant-company) had purchased for Rs. 2,25,600 in all, from the Western Railways under the aforesaid public auction were the purchase of goods which was deemed to take place in the course of inter-State trade and commerce, in terms of clause (a) of section 3 of the Central Sales Tax Act, 1956, and that it was not a local purchase covered by the provisions of the Gujarat Sales Tax Act, 1969
(2) Whether, on the facts and in the circumstances of this case, the Tribunal was right in holding that the assessee (applicant-company) was not liable to be registered as a dealer under section 29(1) of the Gujarat Sales Tax Act, 1969
(3) Whether, on the facts and in the circumstances of this case, the Tribunal was right in law in holding that the assessee (applicant-company) had purchased the disputed goods in connection with its 'business' as defined in section 2(4)(i) of the Gujarat Sales Tax Act, 1969
(4) Whether, on the facts and in the circumstances of this case, the Tribunal was right in law in holding that the assessee (applicant-company) was a 'dealer' under section 2(10) of the Gujarat Sales Tax Act, 1969, even though it had no place of business within the State of Gujarat and even though it did not carry on any business within the State of Gujarat, as alleged by the assessee
(5) Whether, on the facts and in the circumstances of this case, the Tribunal was right in law in holding that the assessee (applicant-company) was liable to pay purchase tax under section 15 of the Gujarat Sales Tax Act, 1969, on the balance amount of Rs. 1,95,600 after deducting the amount of Rs. 30,000 by way of the said Act from the total purchase price of Rs. 2,25,600 (sic)
(6) Whether, on the facts and in the circumstances of this case, the Tribunal was right in law in holding that the assessee (applicant-company) was merely entitled to a deduction of Rs. 30,000 under section 3(2) of the Gujarat Sales Tax Act, 1969, and not the entire amount of the purchase price of Rs. 2,25,600 which represented the disputed transaction of purchase ?'
7. Be it stated that questions Nos. (1) and (2) are referred at the instance of the revenue, and questions Nos. (3) to (6) are referred at the instance of the applicant-company.
8. For the reasons which follow, we are of the view that question No. (1) set out above require to be answered in the affirmative, i.e., in favour of the applicant-company and against the revenue. Under the circumstances, it is not necessary for us to express any opinion on the remaining questions, since they are rendered academic.
9. Section 3 of the Central Act reads as under :
'3. A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase -
(a) occasions the movement of goods from one State to another; or
(b) is effected by a transfer of documents of title to the goods during their movement from one State to another.'
10. There are two explanations to this section, but they have no bearing on the decision of the reference and they need not, therefore, be cited.
11. Section 3 of the Central Act consists of two clauses. In the instant case, we are concerned only with clause (a) and we shall, therefore, confine our attention only to the said clause. Before clause (a) could be attracted, the following facts must be shown to be in existence : (i) there must be a sale or purchase of goods, and (ii) such sale or purchase must have occasioned the movement of goods from one State to another. If these two conditions are satisfied, then the sale or purchase assumes the character of an inter-State sale or purchase, and on such sale or purchase no tax would be leviable under the Act.
12. It is now well-settled by a series of decisions of the highest court that a sale will be an inter-State sale under section 3(a) of the Central Act if there is a contract of sale which occasions the movement of goods from one State to another. The movement may be the result of a covenant in the contract of sale or it may be an incident of that contract. 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 sale will assume the character of an inter-State sale. It is not necessary for a sale to be deemed to have taken place in the course of inter-State trade or commerce, that the covenant regarding inter-State movement must be specified in the contract itself. It would be enough if the movement was in pursuance of and incidental to the contract of sale. In order that a sale may be regarded as an inter-State sale, it is immaterial whether the property in the goods passes in one State or another : see Tata Iron & Steel Co. Ltd. v. S. R. Sarkar [1960] 11 STC 655 (SC), Kelvinator of India Ltd. v. State of Haryana [1973] 32 STC 629 (SC), Oil India Ltd. v. Superintendent of Taxes [1975] 35 STC 445 (SC), Balabhagas Hulaschand v. State of Orissa [1976] 37 STC 207 (SC), Union of India v. K. G. Khosla & Co. Ltd. [1979] 43 STC 457 (SC), Indian Oil Corporation Ltd. v. Union of India [1981] 47 STC 1 (SC) and South India Viscose Ltd. v. State of Tamil Nadu [1981] 48 STC 232 (SC).
13. Having considered the true import of section 3(a) of the Central Act, it would be necessary to consider the true effect of sub-section (2) of section 64 and sections 20 and 23 read with section 62 of the Sale of Goods Act, 1930, which too have a bearing on the decision of the question under consideration, since the purchase in the instant case had taken place at an auction sale. Sections 64(2), 20, 23 and 62 of the Sale of Goods Act read as under :
'64. In the case of a sale by auction -
(1) .........................
(2) the sale is complete when the auctioneer announces its completion by the fall of the hammer or in other customary manner; and, until such announcement is made, any bidder may retract his bid;
............................'
'20. Where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment of the price or the time of delivery of the goods, or both, is postponed.'
'23. (1) Where there is a contract for the sale of unascertained or future goods by description and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be expressed on implied, and may be given either before or after the appropriation is made.
(2) Where is pursuance of the contract, the seller delivers the goods to the buyer or to a carrier or other bailee (whether named by the buyer or not) for the purpose of transmission to the buyer, and does not reserve the right of disposal, he is deemed to have unconditionally appropriated the goods to the contract.'
'62. Where any right, duty or liability would arise under a contract of sale by implication of law, it may be negatived or varied by express agreement or by the course of dealing between the parties, or by usage, if the usage is such as to bind both parties to the contract.'
14. It is now well-settled that section 64(2) does not deal with the question of passing of the property at auction sale but merely deals with completion of the contract of sale which takes place at the fall of the hammer or at the announcement of the close of the sale in other customary manner by the auctioneer. In other words, all that happens at the fall of the hammer or at the announcement of the closure of the sale in other customary manner is that a contract of sale comes into existence and parties get into the relationship of a promissor and a promisee in a executory contract. If the auction sale of chattels is unconditional and is in respect of specific ascertained goods and nothing remains to be done to the goods for putting them in a condition ready for delivery, the property in the goods would pass to the purchaser upon the acceptance of the bid but that would not be because of section 64(2) but because of section 20. Section 64(2), therefore, has nothing to do with the aspect of the passing of the property at an auction sale and it is by virtue of the goods being specific and in a deliverable state that under section 20 the property in such goods passes to the buyer at the completion of the contract at the fall of hammer at such sale. The property would not simultaneously pass, however, if the goods sold at the auction are non-specific or unascertained goods or the auction sale is conditional. In the case of a sale of unascertained goods by description at an auction, the property in goods will pass upon unconditional appropriation of the goods of that description and in a deliverable state to the contract, either by the seller or the buyer, but with the assent of the other. Such assent may be express or implied and prior or subsequent to the appropriation. The delivery of goods pursuant to the contract by the seller to the buyer or to a carrier or other bailee for transmission to the buyer without reservation of right of disposal must be treated as an unconditional appropriation of the goods to the contract. It must be remembered, however, that section 64 is subject to a contract to the contrary. Section 62 is attracted even in regard to auction sales to which section 64 applies. The rights, duties and liabilities arising under a contract of sale by implication of law spoken of in section 62 refer to the rights, duties and obligations referred to in Chapter III of the Sale of Goods Act, 1930, which contains the provisions laying down rules as to transfer of property between a seller and a buyer and the transfer of title, but there is no reason why section 62 should not apply to rights, duties and obligations arising under section 64 in regard to auction sales. In other words, section 64 is subject to section 62. Moreover, once it is accepted that auction sales to which section 64 applied could be unconditional or conditional and that the auctioneer can prescribe his own terms and conditions on the basis of which the property is exposed to sale by auction, there is no escape from the conclusion that the acceptance of any bid as well as the passing of property in the goods sold there at would be governed by those terms and conditions : See Consolidated Coffee Ltd. v. Coffee Board [1980] 46 STC 164 at 192-194 (SC).
15. Having clarified the legal position on the material aspects, we shall now deal with the question under consideration. As pointed out by the Tribunal, the contract of sale in respect of the goods in question was not reduced into writing. The precise terms and conditions on which the auction sale was held, assuming that they were incorporated in an auction notice or such or similar document, are also not placed on the record of the case. In the absence of such documentary evidence, the Tribunal took into consideration the sale issue notes dated 17th March, 1973, and 27th March, 1973, and other material on record and recorded its findings on the material points in the following words :
'............. It appears from those facts that at the time the appellant had offered to bid at the above auction on 13th March, 1973, and when the Western Railways had accepted the appellant's bid on that day in order to enter into contract of sale and purchase, the goods which were the subject-matter of auction sale were not specific and in a deliverable state because, they were lying dumped together at the Sabarmati Railway Yard ....... The goods appeared to have been mixed up with other goods including 'waste cotton, wooden pieces and bronze lumps' which were not sole to the appellant and, therefore, the goods were not delivered to the appellate, as recorded in the two sale issue notes.'
'.............. at the time of the auction, neither the Western Railways nor the appellant knew or was in a position to know the exact quantity of the metal which was sought to be sold at the auction because the relevant goods were not segregated and weighed at that time. The appellant appeared to have merely offered to buy and the Western Railways to have accepted the appellant's offer and to have agreed to sell the relevant metal at the rate of Rs. 11,280 per metric ton. Therefore, the actual quantity of price payable by the appellant in respect thereof depended entirely upon the weighment of the goods which was to be made subsequently. It is, therefore, clear that at the time of auction, the goods were neither ascertained nor weighed and the amount of price payable for them was also not agreed upon though the rate was agreed upon. Therefore, the 'sale' could not be said to be complete till the goods were actually ascertained and weighed.'
'.............. it was only on 27th March, 1973, that the Western Railways, had completed weighment of the entire quantity of 20 metric tonnes of goods which the appellant had agreed to buy as unascertained goods at the auction held on 13th March, 1973. But the manner in which the authorities of Western Railways had packed, loaded and weighed the goods in question is important because it throws a ring of truth around the appellant's case as pleaded, that after the Western Railways had accepted the appellant's bid of purchase at the auction, but before the contract of sale had become a complete sale, the appellant had instructed the District Controller of Stores, Western Railways at Sabarmati, to arrange for the despatch and delivery of those goods at Bombay. Western Railways appeared to have undertaken to do so behalf of the appellant, as could be verified or inferred from the contents of the aforesaid two sale issue notes.'
'............. It is, therefore, clear that the goods which were the subject-matter of auction which was held on 13th March, 1973, were actually found to have been appropriated for contract of sale only after they were wholly ascertained and weighed on 27th March, 1973, and that was after they were put in the motor trucks for being moved from Sabarmati to Bombay under instructions from the appellant ...........'
'............. Therefore, on the above facts taken together, contract of sale in the present case which had transpired on 13th March, 1973, would have become a 'sale' under the Sale of Goods Act on 27th March, 1973, when the Western Railways had appropriated the goods and had delivered them to the transport carries for their carriage from Sabarmati to Bombay ............'
'............. We are, therefore, inclined to agree with the appellant and accept the plea that it was a case of inter-State purchase covered by section 3(a) of the Central Act and not a case of local purchase attracting any liability to pay tax under the Gujarat Act, as found by the learned Deputy Commissioner ........'
'.............. the facts of this case would not show that there was any prior stipulation, express or implied, between the Western Railways and the appellant in the original contract itself, at any stage, providing for the despatch or movement of goods from Sabarmati to Bombay, and that therefore, the aforesaid movement of goods which had taken place in this case could not and would not have been the result of any such prior agreement .........'
'But, in our view the law which the Supreme Court had declared or laid down,.............. does not require that the instructions to despatch the purchased goods should necessarily emerge only out of a term having been made a part of the original contract, either express or implied. In that connection, the Supreme Court appeared to have liberalised the law by saying that for the invocation or application of section 3(a) of the Central Act, it would be enough even if the movement of goods from one State to another is incidental to the contract of sale or purchase or even if the buyer is able to merely establish 'a conceivable link' between the movement of goods and his contract of purchase and if 'such a nexus is otherwise inexplicable' on the facts and circumstances of a given case. We have already found that on the facts and in circumstances of the present case, we are satisfied about the existence of the required 'conceivable link' in favour of the appellant and regarding the presence of the nexus, as appearing on record, between the movement of the goods and the appellant's contract and which nexus was 'otherwise inexplicable' in the light of facts present in the instant case ..........'
'.............. We are inclined to hold that for the reasons abovestated, the appellant's purchase was an inter-State purchase covered by section 3(a) of the Central Act and not a local purchase governed by the provisions of the Gujarat Act, and we, therefore, hold that the disputed purchase was not liable to levy of purchase tax under section 15 of the Gujarat Act because on the facts and circumstances as above discussed, we agree with the appellant that it had received the delivery of the goods at Bombay and not at Sabarmati as held by the learned Deputy Commissioner ....................'
16. Against the aforesaid background, the question for consideration is whether the Tribunal's view that the applicant's purchase of the goods in question was in the course of inter-State trade is correct in law. The goods were offered for sale by description at a public auction held on 13th March, 1973. The goods were not specific and ascertained and they were not in a deliverable state and their precise price was not determined though the rate was agreed upon when the applicant-company's bid was accepted at the public auction. But that did not have the effect of deferring the completion of contract of sale. At the closure of the auction sale, notwithstanding the presence of the above factors, a contract of sale came into existence and the Western Railway and the applicant-company got into the relationship of a promissor and promisee under an executory contract, having regard to the provisions of section 64(2) of the Sale of goods Act, 1930, as explained in Consolidated Coffee Ltd.'s case [1980] 46 STC 164 (SC). The property in the goods, of course, did not pass to the applicant-company upon the completion of contract as aforesaid. The title to the goods was acquired by the applicant-company subsequently upon the goods being ascertained, weighed and placed in a deliverable state and upon their being appropriated to the contract by the Western Railway by their delivery to the transport contractors for their carriage from Sabarmati to Bombay under the instructions of the applicant-company. Be it stated in this connection that is is nobody's case that there was a contract to the contrary as a result of which either the completion of the contract of sale by virtue of the operation of sub-section (2) of section 64 or the passing of property in the goods as a result of the operation of section 23 of the Sale of Goods Act, 1930, was, in the instant case, put off or postponed to a point of time later than that prescribed in those sections. Under the above-mentioned circumstances, the only conclusion possible is that a contract of sale in respect of the goods in question came into existence on 13th March, 1973, though the property in goods passed to the applicant-company later, that is, on 17th March, and/or 27th March, 1973.
17. Now, the other material facts found by the Tribunal in the instant case are as follows :
(1) The applicant-company is carrying on business of manufacturing and selling ferrous and non-ferrous metals at Bombay which is a place outside the State of Gujarat.
(2) The applicant-company does not carry on any business at any place within the State of Gujarat.
(3) The purchase of the goods in question at the public auction was a solitary business transaction entered into by the applicant-company within the State of Gujarat.
(4) After the applicant-company's bid was accepted at the public auction, but before the goods were ascertained and specified and put in a deliverable state, the applicant-company instructed the railway administration to despatch the goods from Sabarmati to Bombay, and the railway administration agreed to honour such instructions.
(5) Pursuant to such instructions, the railway authorities despatched the goods from Sabarmati to Bombay in two lots after packing, loading and weighing them in motor trucks on two different occasions; the goods were despatched in two motor trucks on 17th March, 1973, and in one motor truck on 27th March, 1973.
(6) The transport receipt were obtained by the railway authorities from the transport contractors and in those receipts the Western Railway was named as 'consignor' and the applicant-company as 'consignee'; though the freight was payable and paid by the applicant-company, no hamali charges for loading the goods in the trucks are shown to have been charged to the applicant-company.
18. Taking an overall view of the material facts and circumstances of the case in their proper perspective, the conclusion is inevitable that the movement of goods in the instant case was occasioned as a result of or in pursuance of the contract of sale. It is true that the contract of sale itself is not shown to have provided for the movement of goods and that the movement of goods is not shown to have been occasioned in accordance with the specific terms of such contract. For the purposes of section 3(a) of the Central Act, however, that is not essential. It is sufficient if the movement was an incident of such contract. The facts cumulatively indicate that the movement of goods herein satisfies the said test. The buyer, who carried on business in another State and for whom the instant transaction was a sole business venture within the territory of this State, had instructed the vendor after the conclusion of the contract of sale, but before the title to the goods passed, to despatch the goods to Bombay. Pursuant to such instructions, the goods were separated from the heap of goods and then loaded and weighed in the motor trucks and despatched to Bombay by the vendors as consignors. The buyer, who was the consignee, had to pay merely the transport charges. These facts cumulatively indicate that there was a conceivable link between the contract of sale and the movement of goods and the nexus is not otherwise explained. For the purposes of section 3(a), it is immaterial where the property in the goods passed. Against the aforesaid background, the only conclusion possible is that the purchase of goods in the instant case was in the course of inter-State trade and that it is not exigible to purchase tax under section 15 of the Act.
19. It was strenuously contended on behalf of the revenue, however, that since the Tribunal has found that there was no prior stipulation between the Western Railway and the applicant company in the contract of sale itself providing for the despatch of goods from Sabarmati to Bombay, the movement of goods could not be held to have taken place pursuant to or consequent upon such contract and that, therefore, the purchase could not be held to have been effected in the course of inter-State trade. We are unable to agree, for, as earlier pointed out, the law does not require that for the purposes of attracting the provisions of section 3(a) of the Central Act, the contract of the sale must itself make provision for or occasion the movement of the goods. Reference may be made in this connection to the decision in Union of India v. Khosla & Co. Ltd. [1979] 43 STC 457 (SC). The facts there were that the respondent-company having its head office in the Union Territory of Delhi, carried on the business of manufacturing air compressors and garage equipment in its factory at Faridabad within the State of Haryana. Orders for the supply of goods from various parties were received by the respondent-company at its head office in Delhi. The head office drew out a production programme and advised the factory to manufacture the goods in accordance therewith. After the goods were so manufactured in the factory, they were brought to the head office in Delhi and despatched from the head office to various customers whether outside or inside Delhi. The bills were sent from the head office and the price of the goods were also received at the head office. The question that arose for decision under the aforementioned circumstances was whether the sales made by the respondent-company were made at Faridabad in the course of inter-State trade or whether they were intra-State sales effected within the Union Territory of Delhi. The matter ultimately went by way of a writ petition before the Delhi High Court, which decided that the sales effected by the respondent-company fell under section 3(a) of the Central Act and that they were liable to be assessed as inter-State sales by the sales tax authorities at Faridabad, since those sales caused the movement of goods from Faridabad to Delhi. On appeal to the Supreme Court at the instance of the Union of India, one of the contentions urged for consideration was that the contracts of sale did not require or provide that the goods should be moved from Faridabad to Delhi, and that therefore, the sales in question cannot be deemed to have taken place in the course of inter-State trade. This contention was rejected in the following words at page 462 :
'It is true that in the instant case the contracts of sale did not require or provide that goods should be moved from Faridabad to Delhi. But it is not to say that for the purposes of section 3(a) of the Act it is necessary that the contract of sale must itself provide for and cause the movement of goods or that the movement of goods must be occasioned specifically in accordance with the terms of the contract of sale. The true position in law is as stated in Tata Iron and Steel Co. Ltd., Bombay v. S. R. Sarkar [1960] 11 STC 655 (SC), wherein Shah, J., speaking for the majority, observed that clauses (a) and (b) of section 3 of the Act are mutually exclusive and that section 3(a) covers sales in which the movement of goods from one State to another 'is the result of a covenant or incident of the contract of sale, and property in the goods passes in either State'. Sarkar, J., speaking for himself and on behalf of Das Gupta. J., agreed with the majority, that clauses (a) and (b) of section 3 are mutually exclusive but differed from it and held that 'a sale can occasion the movement of the goods sold only when the terms of the sale provide that the goods would be moved; in other words, a sale occasions a movement of goods when the contract of sale so provides' .............. In a recent decision of this court in Oil India Ltd. v. Superintendent of Taxes [1975] 35 STC 445 (SC), it was observed by Mathew, J., who spoke for the court, that : (1) a sale which occasions movement of goods from one State to another is a sale in the course of inter-State trade, no matter in which State the property in the goods passes; (2) it is not necessary that the sale must precede the inter-State movement in order that the sale may be deemed to have occasioned such movement; and (3) it is also not necessary for a sale to be deemed to have taken place in the course of inter-State trade or commerce, that the convenant regarding inter-State movement must be specified in the contract itself. It would be enough if the movement was in pursuance of and incidental to the contract of sale. The learned Judge added that it was held in a number of cases by the Supreme Court that if the movement of goods from one State to another is the result of a covenant or an incident of the contract of sale, then the sale is an inter-State sale.'
20. The law on the point, therefore, is clear. The mere fact that the contract of sale itself does not provide for or occasion a movement of goods, would not be an impediment in the way of holding that section 3(a) of the Central Act applies provided it is established that the movement of goods from one State to another is in pursuance of or incidental to the contract of sale. If there is a conceivable link between the contract of sale and the movement of goods from one State to another which is not otherwise explained, the transaction in question will have to be regarded as a 'sale' or 'purchase', as the case may be, in the course of an inter-State trade.
21. In view of the foregoing discussion, we are of the view that the Tribunal was right in law in holding that the purchase of goods made by the applicant-company at the public auction held by the Western Railway on 13th March, 1973, must be deemed to have taken place in the course of inter-State trade, and that in view of section 3(a) of the Central Act it was not exigible to purchase tax under the Act on the footing that it was a local purchase. The first question, therefore, is answered in the affirmative, i.e., in favour of the applicant-company and against the revenue.
22. As pointed out earlier, in view of the decision on question No. (1), it is not necessary to answer the other questions.
23. As regards costs, on the facts and in the circumstances of the case, it appears to be just to direct that each party in the two references shall bear its own costs.