JUDGMENT

H.L. Dattu, J. 1. This appeal is directed against the judgment and order dated 21.06.2002, passed by the Division Bench of the High Court of Judicature of Andhra Pradesh at Hyderabad in Tax Revision Case No. 54 of 1991. By the impugned judgment and order, the High Court has dismissed the Revision Petition filed by the assessee, inter-alia, holding that the disputed transactions constitute inter- State sales, as contemplated under Section 3(a) of the Central Sales Tax Act, 1956.

2. The issue that we are called upon to decide in the case is, whether in the facts and circumstances of the case, the sale or purchase of goods can be said to have taken place in the course of inter-State trade or commerce and thereby exigible to tax under the Central Sales Tax Act, 1956 (hereinafter referred to as, "the Central Act").

3. M/s Jay Engineering Works Ltd. is a Public Limited Company, registered under the Companies Act, 1956. It has its Head Office- cum-Registered Office at 23, Kasturba Gandhi Marg, New Delhi. In the State of Andhra Pradesh, the Company has registered itself in the name and style of M/s Hyderabad Engineering Industries (Prop. - The Jay Engineering Works Ltd.). It is registered as a dealer under the Andhra Pradesh General Sales Tax Act, 1957 as well as Central Sales Tax Act, 1956.

4. The Company is engaged in the manufacture and sale of electrical fans, sewing machines, fuel injection parts and accessories etc. The Company has its manufacturing units in different parts of the country including Hyderabad, Andhra Pradesh. In addition to the factory and office in Hyderabad, the company has its branch office at Vijayawada in the State of Andhra Pradesh. Outside the State of Andhra Pradesh, the company has its godowns in different States including Delhi. In Kolkata, the company has its own office in the name of Eastern India Usha Corporation.

5. M/s. Usha Sales Ltd. (subsequently known as Usha International Ltd.) (hereinafter referred to as "UIL") is a company registered under the Indian Companies Act, with its registered office at 19, Kasturba Gandhi Marg, New Delhi. It has 16 divisional offices at various places in the country with different names at every place wherever the assessee's godowns are located.

6. The assessee and UIL had entered into a sales agreement dated 01.05.1979. It was for a period of five years. Under the said agreement, the main function of UIL was to organize the sale and distribution of the products of the assessee and to arrange for sale promotion measures of the products and to provide after sales service and such other services as might be required in the interest of sale of the said products. The agreement also envisaged that UIL would purchase the said products as an independent principal and maintain adequate stocks and sell the same as such. We will refer to these clauses in the agreement while discussing the issues raised by the learned counsel for the parties at the time of hearing of the appeal.

7. The Company has been an assessee on the rolls of the Commercial Tax Officer, Company Circle-II, Nampalli, Hyderabad. For the assessment year 1981-82, the assessee company filed its annual returns under the Central Act in the prescribed form. The assessee company claimed exemption on a turnover of Rs. 8,87,75,643.00 towards goods transported to out-of-state depots otherwise than as a result of direct sale which would attract tax under Section 6 of the Central Act.

8. The assessee's case before the assessing authority, Sales Tax Appellate Tribunal and the High Court was that the transactions on which exemptions claimed cannot be regarded as sales in the course of inter-State trade, chargeable to tax under the Central Act. This contention of the assessee is negatived by the assessing authority, which view is confirmed by the Tribunal and the High Court.

9. The findings of the assessing authority with respect to the nature of the transactions with its various branches, except in the case of Cal