Judgment

RAY, C.J.I. :- These two appeals by certificate and the writ petitions turn on the question whether the contract for sale of goods was an inter-State sale or an intra-State sale.

2. The appellant is a company having its registered office at Calcutta. There are branches at Bombay, Delhi, Madras and Lucknow. The main factory is at Madras.

3. In order to appreciate the real controversy it is necessary to refer to the facts of one of the Civil Appeals as a pattern of transaction.

4. In Civil Appeal No. 1838 of 1969 Asha Metal Works of Bombay referred to as the Bombay buyer wrote to the Bombay branch of the appellant asking for lowest quotation of certain goods. The Madras branch which has the principal factory there for manufacture of goods was written to by the Bombay branch. The Madras branch wrote to the Bombay branch quoting the prices f.o.r. Madras. The Bombay branch then wrote to the Bombay buyer that the price was f.o.r. Madras and delivery would be ex-works Madras. The Bombay buyer thereupon placed the order with the Bombay branch.

5. On these facts counsel for the appellant contended that the sale was at Bombay inasmuch as the Bombay buyer placed the firm order at Bombay, payment was to be made at Bombay, railway receipt was in the name of the Bombay branch and the goods were to be delivered at Bombay. It was emphasised that there was no contract or privity between the Madras branch and the Bombay buyer but the privity was only with the Bombay branch.

6. The only question is whether the sale was an inter-State sale or a sale at Bombay. If the movement of the goods from Madras to Bombay was an incident of or occasioned by the sale itself it would be taxable under Section 3 (a) of the Central Sales Tax Act.

7. There was not and there could not be any contract of sale between the factory of the seller appellant at Madras branch and the Bombay branch of the appellant. It is obvious that the Bombay branch is the agent of the seller appellant. The appellant could not be the buyer as well as the seller.

8. The contention of the appellant is that the goods were sent by the factory at Madras branch to the Bombay branch and thereafter the goods were sold by the Bombay branch to the Bombay buyer.

9. The sale as well as the movement of the goods from Madras to Bhandup at Bombay was a part of the same transaction. The movement of the goods from Madras to Bhandup was integrated with the contract of sale for the following reasons. The Bombay branch received the Bombay buyers order and sent the same to the Madras branch factory. When the Bombay buyer asked for quotation of prices the Bombay branch wrote to the Madras branch and gave all the specifications and stated that the goods were for the Bombay buyer. The Madras branch in reply referred to the order of the Bombay buyer and gave particulars mentioning that the price was f.o.r. Madras. The Bombay branch thereafter wrote to the Bombay buyer reproducing all the particulars, conditions of sale and mode of despatch as stated by the Madras branch and further stated that the goods would be manufactured at the Madras branch factory.

10. It is important to note that all prices were shown F.O.R. Madras and it was further stated that all goods would be despatched at the risk of the Bombay buyer. It is in this context that the Bombay buyer on 27 May, 1964 placed an order with the Bombay branch accepting all the terms and conditions. The Bombay branch placed an indent order addressed to the Madras branch giving all the particulars and stated the buyers name as Asha Metal Works, Bombay and gave the customers order number and the date viz., 27 May, 1964. The goods were to be invoiced to the Bombay branch and the goods were to be despatched f.o.r. Madras.

11. The Bombay branch wrote to the Bombay buyer on 28 August 1964 that they had received an invoice from the factory at the Madras branch that some of the goods against the order of the Bombay buyer were ready for despatch. The Bombay branch asked t