Judgment :-

S.H. Kapadia, J.

1. Leave granted.

2. A short question which arises in this batch of civil appeals is : whether the taking of the delivery of chemicals in Delhi by the purchasing dealers, in the context of they being the distributors/stockists of the assessee (appellant), for the assigned territories outside Delhi would take away the transaction in question from the category of sale inter-State sale(s)?

Facts in Civil Appeal No. of 2009 - arising out of S.L.P. (C) No.20624 of 2007

3. During the assessment year 1974-75 the dealer, M/s. DCM Ltd., claimed exemptions on account of the following sales made to the registered dealers:

4. The Assessing Authority vide Order dated 28.3.1979 did not grant exemption in respect of the above-mentioned sales on the ground that the three above-mentioned purchasing dealers had been assigned specific territories, under the Contract(s), outside Delhi and that they were under contractual obligations with M/s. DCM Ltd. to supply goods to the specified dealers who were also named by M/s. DCM Ltd. on a price fixed and determined by M/s. DCM Ltd. According to the said order, even the quantity of chemicals stood determined by M/s. DCM Ltd. According to the

.Assessing Authority, under the above circumstances, the said chemicals meant for inter-State sales, however, to avoid liability under the Central Sales Tax Act, 1956, the transaction was shown by the assessee (appellant - M/s. DCM Ltd.) as a "local sale". Accordingly by the said order dated 28.3.79, the said sales were taxed at 10% under the said 1956 Act.

5. Aggrieved by the assessment order dated 28.3.1979, appeals were preferred by M/s. DCM Ltd. before Addl. Commissioner who dismissed the appeals vide his order dated 14.12.79 on the ground that the transaction(s) in question were inter-State sales. According to M/s. DCM Ltd., the sales were "local sales" as the said chemicals stood sold in Delhi itself. However, the Appellate Authority observed that the assessee should be given an opportunity to produce `C Forms in respect of the sales in question and accordingly it remanded the case on the limited point to the Assessing Authority to give an opportunity to M/s. DCM Ltd. to produce the `C Forms.

6. Aggrieved by the decision of the Appellate Authority, the assessee filed appeal(s) before the Appellate Tribunal which held that each of the three registered/purchasing dealers were distributors who had executed Agency Agreement(s) with the assessee. According to the Tribunal, some of the clauses of the said Agreement(s) indicated that all supplies were to be made ex-works of the assessee. Under the said Agreement(s), the purchasing dealers were required to take local delivery at the factory gate. Under the said Agreement(s), the purchasing dealer(s) were required to store the said chemicals in their own godowns in Delhi. Under the said Agreement(s), however, the assessee had to fix the price(s) at which the chemicals were to be sold in the different assigned territories outside Delhi. Accordingly it was held by the Appellate Tribunal, under the facts and circumstances of this case, that under the said Covenant of Agency, since the chemicals were to be sold in the assigned territories outside Delhi, the transaction(s) was inter-State sale(s). In this connection, the Appellate Tribunal placed heavy reliance on clauses 3 & 7 of the said Agreement(s). The Appellate Tribunal once again directed the Assessing Authority to give one more opportunity to the assessee to produce the requisite `C Forms in respect of the sales made to the said three registered/purchasing dealers.

7. Aggrieved by the decision of the Appellate Tribunal, however, the assessee approached the High Court of Delhi by filing an application for reference under Section 45(1) of Delhi Sales Tax Act, 1975. The question referred to the High Court was : whether the Sales Tax Tribunal was right in holding that the said sale(s) was an inter-State sale(s)? Vide impugned judgment dated 3