1. This is a reference under section 69 of the Gujarat Sales Tax Act, 1969, at the instance of the Revenue. The period of assessment in question is :

April 1, 1973 to March 31, 1974, April 1, 1974 to March 31, 1975 and April 1, 1975 to March 31, 1976.

The opponent-assessee is a registered dealer under the provisions of the Gujarat Sales Tax Act, 1969 and also under the Central Sales Tax Act, 1956. The assessee is distributor of carbon dioxide manufactured by Sardar Carbonic Gas Co., Bombay. The assessee received orders from its purchasers from Gujarat (Surat and Ahmedabad) for carbon dioxide cylinders or dry ice. The opponent-assessee used to place orders with the Bombay supplier which in turn used to send the carbon dioxide gas directly to the purchaser, as per the instructions of the opponent. The rate charged by the opponent from the purchasers was apparently higher than the rate charged by the Bombay supplier. As per the instructions of the opponent, the Bombay supplier took different transport receipts in the name of the purchasers and sent the goods directly to the purchasers. During the period in question certain goods were sent to Surat purchaser by motor transport and consigned to the Surat purchaser as consignee by name. In case of Ahmedabad purchaser, the goods were sent by rail. Railway receipts were taken out in the name of Ahmedabad purchaser. Transport receipts in the case of Surat purchaser were used to be handed over to the transporter for delivery to the purchaser along with the goods, whereas in the case of Ahmedabad purchaser, the railway receipts were sent by Bombay supplier directly by post to the purchaser at Ahmedabad. The goods were thus taken delivery of by the purchasers from the respective carriers. Freight in each case was borne by the purchasers because the goods were loaded by the Bombay supplier at Bombay as f.o.r. Bombay. Empty cylinders were returned by each purchaser to the Bombay supplier directly.

2. The opponent considered the second sale between it and the purchasers at Surat and Ahmedabad as inter-State sale falling within the provisions of section 3(b) of the Central Sales Tax Act, 1956. The sales tax authorities did not consider the second sale as inter-State sale, but considered the same as local sale in the State of Gujarat. After the assessments were made, accepting the contention of the assessee that the second sales were inter-State sales falling within section 3(b), the matters were taken in suo motu revision by the Commissioner. The revision applications were heard by the Assistant Commissioner of Sales Tax.

The Assistant Commissioner of Sales Tax did not accept the contention of the assessee and ordered that the sales be considered as local sales and assessments be made accordingly. For the purpose of deciding this reference it is not necessary to refer to the details as regards the quantity of sale. However, it may be noted that for all the three assessment periods, the total amount of tax in dispute came to Rs. 3,360, Rs. 4,768 and Rs. 8,605, respectively.

3. The opponent-assessee felt aggrieved by the order passed by the revisional authority, and carried the matter before the Tribunal by way of further revision as provided under section 67 of the Act. Before the Tribunal the opponent-assessee contended that the transaction between the opponent-assessee and the purchasers was inter-State sale falling within the provisions of section 3(b) of the Central Sales Tax Act, 1956; and alternatively it was a sale within the State of Maharashtra. The Tribunal upheld the contention of the assessee and held that it was inter-State sale falling within the provisions of section 3(b) of the Central Sales Tax Act, 1956. The Tribunal did not decide the alternate point. However, it did observe that if it were necessary to decide, it would have held that the second sale had taken place within the State of Maharashtra.

4. After the Tribunal decided the revision, the State submitted application for making reference to this Court. The Tribunal, after drawing the statement of facts, has referred the following question for the opinion of this High Court :

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the sale by the opponent to the purchasers in the State of Gujarat was an inter-State sale within the meaning of section 3(b) of the Central Sales Tax Act, 1956 and not a local sale made in the State of Gujarat, liable to tax under the Gujarat Sales Tax Act, 1969 ?"

Our answer to the question is in affirmative, in favour of the assessee and against the State for the following reasons :

5. It is an undisputed position that there are two sales - one sale is between the opponent-assessee and the Bombay supplier, namely, Sardar Carbonic Gas Co. It is also not disputed by the parties that the first sale between the opponent-assessee and the Bombay supplier was covered by the provisions of section 3(a) of the Central Sales Tax Act, 1956. This is so because there was a contract of sale between the opponent-assessee and the Bombay supplier. This contract of sale occasioned the movement of goods from State of Maharashtra to the State of Gujarat. Therefore the conditions for attracting the provisions of section 3(a) were present. In this view of the matter as far as the first sale between the opponent-assessee and the Bombay supplier is concerned, it is beyond the pale of controversy.

6. The controversy is with regard to the second sale between the opponent-assessee and the purchasers at Surat and Ahmedabad. The Tribunal, relying upon the decision in the case of Bayyana Bhimayya & Sukhdevi Rathi v. Government of Andhra Pradesh reported in [1961] 12 STC 147 (SC), came to the conclusion that in the instant case there were two deliveries which synchronised in point of time, even though both the sales were separate in point of fact and in the eye of law. When the Bombay supplier transported the goods to Surat and Ahmedabad and took out receipts in the name of the purchaser/purchasers at Surat and Ahmedabad, there was constructive delivery in favour of the opponent-assessee. At the same time there was constructive delivery of the same goods in favour of the purchasers. However, the second delivery by the Bombay supplier could not be as principal to principal. While effecting second delivery it has to be inferred, in the facts of the case, that the Bombay supplier acted as agent of opponent-assessee. Such inference has been drawn by the Tribunal, and in our opinion rightly. The moment the goods are transported and the transport receipts or the railway receipts are taken in the name of the purchasers at Ahmedabad and Surat, the property in the goods stood transferred in favour of the purchasers.

7. Such is the finding of fact arrived at by the Tribunal for good reasons. Firstly because the transport receipts/railway receipts have been taken out in the name of the purchasers. Secondly because the purchasers were required to pay railway freight or transport fare as the case may be. Having regard to the overall facts and circumstances of the case the Tribunal found that there was sale by transfer of documents of title to the goods. It may be that the actual documents were not taken out in the name of the opponent-assessee, and there was no actual endorsement made thereon by the opponent-assessee. But the supplier at Bombay took out the transport receipt/railway receipt in the name of the purchasers at Surat/Ahmedabad at the instance of the opponent-assessee. This is how the sale was effected by transfer of documents. This is the reason why the Tribunal held that the second sale was inter-State sale within the meaning of section 3(b) of the Central Sales Tax Act, 1956.

8. In the case of Bayyana Bhimayya [1961] 12 STC 147 (SC), the facts were almost similar. The dealer in that case entered into contract with two mill companies for purchase of some gunny bags. The dealer instructed the mill companies to deliver the goods to third parties. The mills, however, did not accept the third parties as contracting parties, but only acted as agents of dealer. The dealer entered into agreement with third parties and charged something extra from the third parties. The dealer handed over to the third parties the delivery orders which were known as "kacha" delivery orders. The mill companies delivered the goods against "kacha" delivery orders, along with invoice and bill and collected the sales tax from the third parties. It was contended that there was only one transaction of sale between the mills and the third parties, and that the transaction between the dealer and third parties could not be treated as sale. This contention was negatived. It was held that there were two transactions of sale and sales tax was, therefore, payable at both the points by both the parties. The Supreme Court held that there were two deliveries of the goods in question; both the deliveries were synchronised in point of time but were separate both in point of fact and in law. In the instant case also almost similar situation has arisen. In our opinion the Tribunal has rightly followed the aforesaid decision.

9. Learned counsel for the Revenue submitted that in the instant case there were two sales, one between the opponent-assessee and the Bombay supplier. Another between the opponent-assessee and the purchasers at Surat and Ahmedabad. There was no privity of contract between the Bombay supplier and the purchasers at Surat and Ahmedabad. Thus far there is no controversy. It is, however, contended that since the documents of title were directly sent in the name of the purchasers at Surat and Ahmedabad it should be held sufficient to infer that the delivery was taken by the purchasers at Surat and Ahmedabad and not at Bombay. This contention is sought to be supported by further fact that the bills were also issued by the opponent-assessee in the name of the purchasers. The aforesaid argument cannot be accepted for the simple reason that when the transport receipts/railway receipts were taken out by the supplier at Bombay in the name of the purchasers, the property in goods stood transferred in favour of the purchasers. This second sale took place during the movement of the goods from one State to another. Therefore, as far as second sale is concerned, provisions of section 3(b) of the Central Sales Tax Act, 1956, are attracted.

10. There is nothing in law which does not permit two sales, simultaneously. In this connection reference may be made to a decision of the Supreme Court in the case of Onkarlal Nandlal v. State of Rajasthan reported in [1985] 60 STC 314; AIR 1986 SC 2146. In para 7 of the judgment (at page 321 of STC) the Supreme Court has, inter alia, observed that there is no antithesis between a sale in the course of inter-State trade or commerce and a sale inside the State. If the aforesaid observations are applied to the facts of the case and if we were to come to the conclusion that the sale transactions are not covered by the provisions of section 3(b) of the Central Sales Tax Act, 1956, we would have agreed with the observations of the Tribunal that the second sale has taken place within the State of Maharashtra.

11. It cannot be accepted as proposition of law that since first sale is inter-State sale covered by the provisions of section 3(a) of the Central Sales Tax Act, 1956, second sale cannot take place unless the goods physically cross the border of one State and enter the border of another State. There is nothing in law which does not permit second sale even before the goods cross the borders of the State concerned. In this view of the matter the contention raised by the learned counsel for the Revenue cannot be accepted.

12. For the aforesaid reasons, we answer the reference accordingly as indicated hereinabove in para 4, with no order as to costs.

13. Reference answered in the affirmative.