In "F.O.R." contracts, delivery occurs when goods are booked by rail and the document of title is transferred. If this happens within a state, it is an intrastate sale, regardless of the destination or the buyer's right to re-inspect goods upon arrival.

Judgment

MITTER J. This is an appeal on certificate granted by the High Court of Madhya Pradesh from its order on a petition for the issue of a writ of certiorari under Articles 226 and 227 of the Constitution for quashing the order of the sales Tax Officer Jabalpur on March 11, 1955 assessing the petitioner firm to sales tax in the sum of Rs. 8,386-12-0 for the period 1st January, 1952 to 31st December, 1952. The decision of the Sales Tax Officer was upheld in appeal by the Appellate Assistant Commissioner, and by the Commissioner of Sales Tax on a further appeal on November 30,1962.

The petitioner-firm had its head office at Kanpur and a branch office in the State of Madhya Pradesh at Mandla. During the course of its business, it entered into a contract with the Director-General of Stores, Supplies and Disposals, Government of India, New Delhi. For the period January 1, 1952 to December 31, 1952, the petitioner was assessed to sales tax in respect of timber booked by rail from Mandla Fort railway station to places outside the State. The Sales Tax Authorities had found that the title to the goods passed within the State of Madhya Pradesh and the sales were also completed there and the delivery of the goods also took place within that State, the subsequent movement of goods to places outside the State being for the better enjoyment of what had been acquired earlier.

Before the High Court, the petitioner contended that the goods were sent to purchasers for consumption outside the State and were actually delivered beyond the boundaries of the State as a direct result of the sales for the purpose of consumption there.

In the return filed on behalf of the respondents opposing the petition, it was stated with detailed reference to the terms of the contract between the parties that the property in goods passed to the buyer within the State of Madbya Pradesh and that the goods were delivered in that State and in despatching goods outside that State according to the instructions given by the buyers from time to time, the sellers acted as agents of the purchasers; consequently, the sales did not fall within section 27-A(1)(a) of the Act or Article 286(l)(a) of the Constitution and the Explanation thereto.

The facts of the case as found by the High Court were as follows: The petitioner s tender for the contract for supply of timber was accepted on 15th December, 1951. The form of acceptance was exhibited as annexure "A" to the petition, which was subject to the conditions mentioned in "Acceptance of Tender Form": It was also, as stated In clause 7 of the Acceptance of Tender Form, subject to the conditions of the contract as contained in Form No. W.S.B. 133. The petitioner had not exhibited the tender form, although it had produced a form before the Sales Tax Authorities. The tender form was however not to be found on the record. The High Court noted that under the undisputed course of business between the assessee and the Director, the petitioner was required to keep the timber logs ready and available for inspection at Mandla Fort and other stations byA.I.G.S., G.S.I.D., Kanpur, or an officer acting for him. The inspecting authority after inspecting "the timber, issued an inspection certificate and also put a hammer mark on the timber approved. The approved timber also bore the private mark of the petitioner. The petitioner was then required to despatch the timber by goods train in full wagon load on military credit notes to the Commandant, C.O.D. Chowki or the consignee intimated by the C.O.D. Chowki. The place of delivery was Mandla Fort and other stations that were to be intimated, The petitioner had,, to obtain military credit notes from the inspector and was required to send the railway receipt to the consignee by registered post. As soon as the goods were booked by rail, the petitioner was required to inform the consignee about the despatch of the timber giving the number of the wagon and the railway receipt number. The assessee was