V. Ramaswami, J.
1. This is an appeal against the order of the Board of Revenue. The appellant-company is carrying on business in manufacturing and sale of yarn in Madurai District within the State of Tamil Nadu. It claimed that it has depots at Bombay, Nagpur, Calcutta and Burhanpur. It also effected sales during the assessment year 1964-65 through these alleged depots in other States as follows :
Bombay ... Rs. 13,11,303.09Burhanpur ... Rs. 43,771.00Calcutta ... Rs. 18,95,807.09Nagpur ... Rs. 2,63,014.97
In the return for this assessment year under the Central Sales Tax Act, the appellant returned only a taxable turnover of Rs. 1,33,681.20. But in respect of the above set-out sales, it claimed exemption on the ground that they were depot sales and not inter-State sales. This contention was accepted by the Joint Commercial Tax Officer, Madurai, except in regard to a turnover of Rs. 35,774.98. Even this turnover of Rs. 35,774.98 was held as not inter-State sales by the Appellate Assistant Commissioner in appeal preferred by the appellant. It appears, sometime later a team of officers were sent to Bombay, Nagpur, Calcutta and Burhanpur to investigate into the nature of these transactions. Since the facts investigated and the report disclosed that the said transactions were inter-State sales, the Board of Revenue initiated proceedings under Section 34 of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter called the Act) and indicated its provisional conclusion that the entire turnover of Rs. 35,13,896.15, including the turnover of Rs. 35,774.98 allowed by the Appellate Assistant Commissioner did not represent depot sales but inter-State sales and called upon the appellant to file its objections, if any. After following the prescribed procedure, ultimately, the Board held that the transactions effected through Burhanpur, Calcutta and Nagpur depots were depot sales and not inter-State sales, but so far as the transactions effected through the alleged Bombay depot were concerned, a turnover of Rs. 11,63,697 was treated as inter-State sales liable to tax at 2 per cent. It is against this order of the Board of Revenue that the present appeal has been filed.
2. In this appeal, the learned counsel for the appellant was at pains to show that the transactions were depot sales and not really inter-State sales and, in this connection, he also relied on certain decisions. He had typed an abstract detailing the particulars relating to these transactions which have been held to be inter-State sales. We take one transaction, which is item 15 in the abstract statement furnished by him, with reference to which we proceed to consider the nature of the transaction. It is not in dispute that the other transactions were also similar to this transaction. The particular transaction took place in the following manner : On 5th December, 1964, the appellant wrote to their depot keepers M/s. Kiron Corporation of Bombay, informing them that the appellant will make available for sale 100 cases of R & NF 50 Californian cotton yarn at Rs. 54.50 per 5 kg. ex-mill basis and that the appellant will be able to despatch the same in the month of December in lots of 20 cases every four days. On receipt of this letter M/s. Kiron Corporation contacted the intending buyers and obtained orders from them. One such purchaser was M/s. Keshavlal Talakchand and Co., Bombay, who placed an order on 10th December, 1964, for purchase of the exact quantity of 100 cases at the said rate. The price agreed was Rs. 54.50 per kg. ex-mill plus 1 per cent commission, plus lorry freight, excise duty and sales tax. This order was sent to the appellant and was received by it on 15th December, 1964. The 100 cases were despatched through four lorries, 25 cases each, on 22nd December, 1964, 28th December, 1964, 31st December, 1964, and 2nd January, 1965. The way-bills in respect of these despatches were prepared by the appellant noting the consignee as 'self'. The value of the goods and the freight charges were separately noted in the waybills. At the same time the appellant instructed its bankers at Madurai enclosing a demand draft drawn on M/s. Kiron Corporation in its favour for the value of the goods and the lorry way-bill and requesting the bank to deliver the way-bill to the purchaser against payment of the draft. In the meantime, the bill was discounted by the Madurai bank and the amount was also credited to the appellant. Thereafter, 5 invoices were prepared on 6th January, 1965, 9th January, 1965, 13th January, 1965, 14th January, 1965, and 15th January, 1965, for 25 cases, 25 cases, 20 cases, 15 cases and 15 cases, respectively, making a total of 100 cases. In these invoices, in addition to the excise duty and sales tax, 1 per cent commission payable to the depot keeper was included to the value of the cotton yarn. These invoices were prepared by the depot keeper and by presenting these invoices and paying the way-bill the purchaser cleared the goods from the transporting lorries themselves. This is the procedure which was followed in respect of these transactions which are in question.
3. On these facts, we have no doubt that the goods were despatched in pursuance of the order placed by the Bombay purchaser with the appellant through its depot keeper at Bombay and that the consignment was referable to and identifiable with the relevant contract itself. The fact that the out-of-State purchaser placed the order with the appellant's depot keeper at Bombay and then it was forwarded to the appellant or the fact that the payment was first made by demand draft drawn on the depot keeper, which was discounted and, later on, the amount was recouped by the depot keeper with the payment by the buyer, do not in any way, in our opinion, change the nature of the transaction from inter-State sale to one of local sale. On very similar circumstances, this court in English Electric Company of India Ltd. v. Deputy Commercial Tax Officer  23 S.T.C. 32 held that it is an inter-State sale. The ratio of that judgment is clearly brought out in the head-note, which may be usefully extracted here :
In an inter-State sale the goods have to be despatched by the seller to the buyer and such inter-State movement of goods should be as a result of a contract of sale. But a contract of sale need not necessarily be between the seller and the buyer direct. The incidents intricately woven with the movement of goods may suggest that the seller knew the buyer and the goods moved for satisfying a contract with the buyer and but for the identified and identifiable buyer there would have been no occasion for the ascertained goods to move at all. If there is a conceivable link between the movement and the buyer's contract, and if in the course of inter-State movement the goods move only to reach the buyer in satisfaction of his contract of purchase and such a nexus as above is otherwise inexplicable, then the sale or purchase of the specific or ascertained goods ought to be deemed to have taken place in the course of inter-State trade or commerce as such a sale or purchase occasioned the movement of the goods from one State to another. The presence of an intermediary such as the seller's own representative or branch office, who antecedently initiated the contract may not make the matter ambulatory. Such an interception by a known person on behalf of the seller in the delivery State and such person's activities prior to or after the implementation of the contract may not tilt the issue either.
4. Similar view was taken in another decision of this court: vide Deputy Commercial Tax Officer v. Arasan Match Industries : 2SCR213 , in which the fact that the out-of-State depot keepers prepared the bills which included the transport charges and collected the money from the buyers was held did not in any way change the character. On similar facts, the Supreme Court also in Iyanahalli Bakkappa and Sons v. State of Mysore  23 S.T.C. 162 took the same view. In that case, the assessee claimed that the sale effected by him was a second or subsequent sale and that his purchase was the first sale effected in the State and that therefore he was not liable to sales tax under the Mysore Sales Tax Act. The facts as found by the Supreme Court was that the assessee purchased safety matches by placing orders with sales depots in Mysore State. The respective managers of the depots forwarded the orders to their head office at Sivakasi in Madras State and instructed them to despatch the matches direct to the assessee in Mysore. The matches were despatched in lorries in accordance with these instructions. The Mysore sales depots with whom the assessee placed orders prepared detailed invoices and sent them to the Match Works at Sivakasi (assessee ?). The assessee remitted the prices to the Match Works by means of draft or telegraphic transfer. The Supreme Court held that these facts disclosed that the purchase by the assessee was in the course of inter-State trade and that therefore his sale was the first sale in the State liable to tax. This decision also shows that the mere fact that the orders were received by the depot keepers and later on sent to their head office does not in any way affect the transaction being inter-State sales.
5. The learned counsel for the appellant relying on the way-bill being drawn in the name of 'self' contended that the goods could be diverted by the consignor or his depot keeper at his will and that therefore the sale could not be held to be an inter-State sale. In this connection he also relied on the decision in Tata Engineering & Locomotive Co. Ltd. v. Assistant Commissioner of Commercial Taxes : 3SCR862 and Kelvinator of India Ltd. v. State of Haryana : 1SCR463 . It is true that the fact that the goods could be diverted by the consignor before it reaches the out-of-State purchaser is a relevant factor in considering the question whether the transaction is inter-State sale or not, but that fact itself could not be said to be conclusive. In very many cases, in order to safeguard the payment of the price and also in order to avoid any future dispute, the goods might be sent to the consignee as 'self' so that the goods could be delivered to the purchaser after payment of the price or could be given on open delivery to the purchaser so that there would not be any dispute thereafter as to the quality or quantity of the goods contracted for. But once we have the evidence to show that the goods moved in pursuance of a contract and was intended to be delivered to the purchaser the transaction becomes an inter-State sale or purchase attracting sales tax under Section 3(a) of the Central Sales Tax Act. We have already noticed that prior to the despatch of the goods there were firm orders by the purchasers and it is only in pursuance of these contracts the goods were despatched intending to be delivered to the purchasers. All the other steps which were taken in this case were intended to safeguard the prompt payment of the price before delivery of the goods to the out-of-State purchaser which do not in any way affect the nature of the transaction as such. We therefore do not agree with the learned counsel that by reason of the consignee being put as 'self', the transaction is taken out of the category of inter-State sales.
6. It was next contended by the learned counsel that appropriation was only at Bombay and that therefore this State had no right to impose sales tax under the Central Sales Tax Act. This argument is not supported by any factual basis. As we have already seen, in pursuance of definite orders the exact quantity of goods were sent with the intention to deliver the goods to a particular out-of-State purchaser. In these circumstances, we are unable to agree with the learned counsel that there was no appropriation in this State. In fact, we doubt very much whether there was any depot at all for the appellant at Bombay. The evidence does not disclose the existence of any depots where large quantities were stored and as and when orders were received from the local purchasers such quantities were removed from those depots and delivered to them.
7. For the foregoing reasons, we agree with the order of the Board of Revenue and dismiss this appeal with costs. Counsel's fee Rs. 250.