C.S.P. Singh J.
1. In pursuance of the direction issued by this Court, the Revising Authority, Gorakhpur, has referred the following question of law for the opinion of this Court:
Whether, on the facts and in the circumstances of the case, the turnover of gunny bags was liable to tax under the Central Sales Tax Act for the assessment years 1962-63 and 1963-64 ?
2. The assessee dealt in foodgrains, oil-seeds, and also acted as purchasing agent for ex-U.P. buyers. It purchased foodgrains and oil-seeds for ex-U.P. principals and, thereafter, packed and stored the commodities in its own gunny bags before sending them to its principals. The ex-U. P. principals were charged separately for the gunny bags. The assessee's contention that the sale of gunny bags was complete in U. P. and, as such, taxable under the U.P. Act, did not find favour with the Sales Tax Officer, who treated it as an inter-State sale. An appeal filed against the assessment, on this point, failed. The Judge (Revisions) has allowed the revision. He has taken the view that the supply of gunny bags was an implied term of the contract of purchase and integrally connected with the purchase of the commodities on behalf of ex-U. P. principals. Treating the assessee as enjoying two capacities, one as a purchasing agent of ex-U. P. principals, and the other as supplier of gunny bags, he held that the transaction of sale of gunny bags was complete in U. P. and, as such, the assessee was not liable to pay Central sales tax on the sale of gunny bags.
3. The turnover of gunny bags can be taxed under the Central Sales Tax Act only if there is an inter-State sale. The taxability of the transaction depends on the question as to whether it comes within the scope of section 3 of the Central Sales Tax Act, 1956. It is necessary to quote the relevant part of section 3 of the Central Sales Tax Act, 1956 (hereinafter to be referred as the Act):
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 occasioned the movement of goods from one State to another
4. The two requirements that have to be met before a transaction becomes exigible to tax under section 3 of the Act are, firstly, that there should be a contract of sale and, secondly, that the sale must occasion the movement of the goods from one State to another or be incidental to the movement.
5. Sri V. D. Singh, appearing on behalf of the department, urged that all the conditions necessary for the transaction to constitute an inter-State sale were present. It was urged that there was an agreement to sell the gunny bags, which was clear from the fact that the assessee had charged the price for the gunny bags irom its principals, and had instructions to despatch the foodgrains in gunny bags. Secondly, the gunny bags would not have moved outside U. P. but for the purchasing agreement for foodgrains, which were to be despatched in the gunny bags in fulfilment of the agreement.
6. Counsel for the assessee, on the other hand, urged that there was no agreement for the sale of gunny bags and, as such, section 3 had no application at all. It was also contended that there was no sale of the gunny bags, as before a transaction could be a sale at least two entities must be involved in the transaction, one a purchaser and the other a seller and, as in the present case, the assessee acted both as the seller and the purchaser, the element of sale was missing. It was also urged that the movement of the gunny bags was not incidental to the purchase of foodgrains.
7. Before the other contentions are considered, it is necessary to consider as to whether there was any agreement for sale of the gunny bags. The question as to whether there is any agreement for sale can be deduced not only from a written contract, which, in the present case, is not on the record, but also from the conduct of the parties. The revising authority has given a finding that an agreement to sell the gunny bags can be implied from the conduct of the parties. The revising authority has held to this effect on a consideration of the dealings of the parties. This finding is one of fact and cannot be challenged in the present reference, as no specific question has been asked for or framed challenging this conclusion. See Karnani Properties Ltd. v. Commissioner of Income-tax  82 I.T.R. 547 (S.C.).
8. The contention that no transaction of sale was involved is devoid of merit. The word 'sale' has been defined in section 2(g) of the Act in the following terms :
2. (g) 'Sale' with its grammatical variations and cognate expressions, means any transfer of property in goods by one person to another for cash or for deferred payment or for any other valuable consideration, and includes a transfer of goods on the hire-purchase or other system of payment by instalments, but does not include a mortgage or hypothecation of or a charge or pledge on goods.
9. The definition postulates that, before a transaction can be a sale, there must be a transfer of property in goods by one person to another, and the transfer must be for cash or for deferred payment or for any other valuable consideration. It is thus obvious that two entities must be involved in the transaction. The assessee in the present case had two capacities, one as the purchasing agent of ex-U. P. buyers and the other as the owner ot the gunny bags. After it purchased foodgrains and oil-seeds for ex-U. P. buyers, it utilised its gunny bags for packing and storing the commodities purchased, and charged the price of the gunny bags from the ex-U. P. buyers. As the assessee was acting in two capacities, two entities were involved in the transaction, one the owner ol the gunny bags and the other, the purchasing agent of ex-U. P. buyers. The fact that the assessee himself was enjoying the two capacities would not make any difference, as in law, he, as the owner of the goods, would be treated separate from the purchasing agent of ex-U. P. buyers. The fact that a person may have two capacities is not unknown to law, e. g., a member of a Hindu undivided family, who is also the karta of the family; a receiver or a trustee, who enjoys the status of a receiver or a trustee separately from his individual capacity. There were thus two entities involved in the transaction, and there was also transfer of property in the gunny bags and the assessee charged the price of the gunny bags from its ex-U. P. principals in pursuance of an agreement with its ex-U. P. principals. Thus, all the ingredients of a sale were present.
10. So far as the movement of gunny bags from one State to another is concerned, it will be seen that the foodgrains purchased by the assessee were packed in them and then the bags containing the foodgrains were despatched to placesoutside U. P. The movement of gunny bags outside U. P. was directly linked up to their sale or at least incidental to it, inasmuch as right from the start the parties contemplated that they should be sent outside U. P., after the foodgrains were packed in them.
11. The question is answered by saying that the turnover of gunny bags was liable to tax under the Central Sales Tax Act for the assessment years in question. As the question has been answered in favour of the department, the department is entitled to its cost, which is assessed at Rs. 200.