JUDGMENT

RAY, C.J.I. :—The petitioner in this Writ Petition raises the question that the supplies of crude oil made by the petitioner Oil and Natural Gas Commission referred to as the Commission to Indian Oil Corporation Limited referred to as the Corporation are not exigible to Sales-tax either by the State of Assam or the State of Bihar under the Central Sales Tax Act or the Bihar Sales Tax Act respectively. The petitioner contends that the supplies by the Commission to the Corporation are pursuant to directions/orders of the Central Government and therefore there is no contract of sale. The petitioner in particular contends that the Commission is obliged to supply to the Corporation and the petitioner has no volition or freedom in the matter. The petitioner, therefore, contends that there is no contract of sale between the Commission and the Corporation.

2. The Second contention of the petitioner is that if it be held to be sales these are inter-State sales under Section 3 (a) of the Central Sales Tax Act, 1956 and the State of Bihar is not competent to levy Sales-tax under Section 16 (5) of the Bihar Sales Tax Act.

3. In order to find out as to whether the transactions between the Commission and the Corporation amounted to a sale, it is necessary to ascertain the correct facts.

4. The letter dated 15 June 1968 is important. It is written by the Corporation to the Commission. The Corporation states as follows :

"I am writing to confirm that Indian Oil Corporation would be in a position to receive 300 tonnes a day of Law a crude via the Oil Pipeline any time from today. We would also wish you to augument the supplies so as to reach about a million tonnes per annum as soon as possible. The above 300 tonnes will be in addition to the supplies that we are receiving currently from OIL (Oil India Ltd.) and by rail from Rudrasagar. Kindly arrange to supply full analytical data regarding the crude that you would be sending from Lakwa. I would also suggest that the pricing arrangement may also be worked out regarding the supply and intimated to us, if necessary, after consulting OIL."

5. The next important document relates to the minutes of the meeting held at the Office of the Chairman of the Corporation at New Delhi on 8 August, 1968. The representatives of the Corporation, the Commission and Oil India Limited were present.

6. Crude oil supplied both by the Commission and Oil India Limited come through the pipeline belonging to Oil India Limited to refineries at Gauhati and Barauni belonging to the Corporation. The manner of measurement and of payment for crude is ascertained by the Corporation from the Commission and Oil India Limited.

7. At the meeting held on 18 October 1968, the Central Government representatives and representatives of the petitioner, Oil India Limited and the Corporation were present. It was decided that crude oil which was being delivered to the refineries of the Corporation at Gauhati and Barauni is a mixture of Oil India Limited crude and the Commission crude. Oil India Limited would send the bills for the entire quantities of crude, so delivered, giving the bifurcation of crude belonging to Oil India Limited and the Commission with API gravity of each.

8. The document dated 23 February 1968 records the price of crude purchased by the Corporation from the Commission and the basis on which payment should be made.

9. Another document dated 17 February 1969 written by the Central Government to Oil India Ltd., shows that crude oil would be supplied to the Barauni, Gauhati and Digboi refineries as mentioned therein. For the Barauni Refinery, Oil India would supply a certain quantity and the Commission the balance. In case the Commissions supply fell short, it would be made good by Oil India Limited. For the Gauhati Refinery, certain quantity would be supplied by Oil India Limited and the remainder would be deemed to have been supplied by the Commission. The requirements of Digboi refinery would be met by Oil India Limit