GOPALAKRISHNAN NAIR, J.:

This is a Letters Patent appear from the judgment of Ali J. who quashed the order passed by the appellants assessing the respondent to sales tax for the period from October 1955 to May 1959 and also restrained the appellants from collecting tax in respect of that period from the respondent. The respondent has preferred cross-objection in respect of its liability to sales tax, for the period January 1955 to 6th September 1955.

(2) The facts leading up to the present appeal are briefly as follows. The Director of Supplies at Delhi entered into a contract with the General Manager Caltex (India), Ltd. Bombay, respondent, for sale of petrol, HSD and power Kero to the State Mechanized Farm at Nandpur within the State of Jammu and Kashmir, in pursuance of this contract the respondent company directed its depot at Pathankot situate in the Punjab to supply petrol to the Nandpur farm. The procedure adopted was that the Officer in charge of the Nandpur farm placed indents with the Pathankot depot for supply of specified quantities of petrol to the Farm and the Pathankot depot transported the petrol in its trucks to the farm and delivered it there. The price of the petro

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