Judgment :- 1. These cases have been filed by two different assessees under S.41 of the Kerala General Sales tax Act, 1963; and both of them relate to the year 1964-65. They arise out of the same fact; and the questions for decision are also the same. They were, therefore, heard jointly, and are being disposed of by this single judgment. 2. The petitioner in T. R. C. 102 of 1967 is the Jay Engineering Works. Ltd. (hereinafter referred to as the Company). It carries on business, as manufacturers of sewing machines, electric fans, etc. The Company has its registered office at Calcutta, and a factory in West Bengal. The petitioner in T. R. C. 93 of 19o7 is Usha Sales (Private) Ltd. (hereinafter referred to as the Agents); and their registered office is at Dell By an agreement dated 1st May 1962, the Company appointed the Agents as sole selling agents for the sale of the Company's products for a period of five years commencing from 1-5-1962. We shall quote hereunder some of the clauses of the said agreement, which are relevant for the purpose of these cases: 1. The Company hereby appoints the Agents as their sole Selling Agents subject to Clause.17 hereinafter mentioned for their products in the Union of India and abroad except the State of West Bengal but including Cooch Behar and Purvilia, for a period of five years commencing from 1st day of May 1962. 2. The Agents hereby agree that during the period of the Agency they will take delivery of all the goods of the Company in the manner and in the terms hereinafter provided. 3. X X X X 4. The Company will deliver the goods in Calcutta to the Agents as per their instructions. The agents will make their own arrangements to despatch the same. The liability of the Company will cease on handing over the goods to the Agents. 5. The Agents will pay to the Company within 90 (Ninety) days from the date of submission of Bills for the goods delivered to them. 6. The Company shall have the right from time to time to revise the prices of its products according to the market conditions at its sole discretion, but before making such revision the Company shall consult the Agents. 7. xxxxxx 8. xxxxxx 9. 6. The Company shall have the right from time to time to revise the prices of its products according to the market conditions at its sole discretion, but before making such revision the Company shall consult the Agents. 7. xxxxxx 8. xxxxxx 9. The Agents will have to see that the goods of the Company are sold, to the consumer at the prices fixed by the Company from time to time. They will be allowed to give commission and rebate to the parties at their discretion. In the case of Hire Purchase, the Agents will be at liberty to charge extra money over and above the rates fixed by the Company from time to time, provided that extra price to be charged by the Agents will be fixed by mutual consultation with the Company. 10. x 11. The Agents will be paid the following by way of discount and commission: xx x 12.12 to 16. x x x 17. All government Tenders will be quoted by the Agents including the State of West Bengal. As regards the rate contracts by the Company with the various Government Departments and the contracts by the Company with other parties, the Company will supply the goods direct, in which case the Agents shall be entiled over-riding commission at the rate of 5 percent. The Agents will have to follow and keep contact with the Government with regard to the Rate Contracts under instruction from the Company and they will have to do all efforts to procure orders from them. All costs incurred in this connection will have to be borne by the Agents. 18 & 19. x x x 20. The... Agents will be required to lift the entire production of the Company leaving 10 per cent for sales in West Bengal within 11/2 months from the date of production. xxx 21 & 22 x x x 23. Notwithstanding anything to the contrary contained in these presents, the Board of Directors of the Company shall be authorised to modify from time to time with the consent of the Agents, the terms of this agreement so far as the Same shall be necessary in the interest of smooth working or otherwise. 24 to28.xxx 3. We are concerned in these cases only with the sale of the Company's goods in the State of Kerala. 24 to28.xxx 3. We are concerned in these cases only with the sale of the Company's goods in the State of Kerala. The Agents opened an office at Ernakulam and they were getting down the goods from West Bengal by rail to Ernakulam, and effecting the sales to the consumers as per terms and conditions of the above agreement. Sometime in 1963 the Company decided with the consent of the Agents to effect a change in the mode of supply of its goods to the Agents. In October 1963, the Company opened an office at Ernakulam, and got itself registered as a dealer under the Kerala General Sales Tax Act, 1963. It was then agreed between the Company and the Agents that the Company would transport its own goods from its factory to Ernakulam, store them in its own godowns at Ernakulam, and sell to the Agents from the said godowns such goods as are required for distribution in Kerala under the agreement dated 151962. Accordingly the Company wrote a letter dated 22101963 to the Agents, with a copy of another letter which it wrote to its Ernakulam Office on the same date giving the necessary instructions regarding the future course of dealings. The letter written to the Agents reads as follows: "M/s. Usha Sales Private Ltd.,,Date: October 22,1963 49/1, Garishat Road, Calcutta 19. Re: New selling arrangements of our products in Kerala State from our Godown at Ernakulam. Dear Sirs, It has been decided that we shall effect supply of sewing machines, electric fans and their spare parts and paints to you in Kerala State through our above godown. Accordingly, we would request you to please advise your Divisional Office, Ernakulam to make necessary arrangements to draw their requirements for the State from our godown at Ernakulam. We are also enclosing herewith a copy of our letter No. SAC/GC/dated 22-10-1968 addressed to our Ernakulam Godown for your perusal and record. Yours faithfully," We shall also quote the relevant portions of the letter of the Company to its own Ernakulam Office: Dated October 22,1963. The Jay Engineering Works Ltd., Telstar, Mahatma Gandhi Road, Near Ravipuram Junction, Ernakulam. Sub: New Selling arrangements of our products to M/s Usha Sales (P) Ltd. from our godown at Ernakulam. Yours faithfully," We shall also quote the relevant portions of the letter of the Company to its own Ernakulam Office: Dated October 22,1963. The Jay Engineering Works Ltd., Telstar, Mahatma Gandhi Road, Near Ravipuram Junction, Ernakulam. Sub: New Selling arrangements of our products to M/s Usha Sales (P) Ltd. from our godown at Ernakulam. It has been decided by us that we shall effect sale of sewing machines, electric fans and their spare parts and paints to M/s Usha Sales Private Ltd., in Kerala State from our above godown. Accordingly we will start to send our products to you on consignment account for storage in Ernakulam godown on receipt of your indents. For the purpose of effecting sale to Ernakulam area under M/s. Usha Sales (Private) Ltd., we give below for your reference the amount of commission to be allowed to them and the procedure to be adopted for submitting bills to them and for despatching sale reports to us. 1. The sewing machines and electric fans and their spare parts, and paints will be supplied to you by us from Calcutta against your indents placed on us. 2. Whatever goods you will receive from us on consignment account during the week (excepting the goods being pre-inspected stock meant for the sale to the Government if any) the entire goods shall be transferred to M/s. Usha Sales (P) Ltd., and billed to them challanwise giving reference of our challan No. in the form of Jay Engineering Works Ltd. We are sending Forms and Stationary by separate post. 3. Weekly Sale Reports for the sale made to M/s. Usha Sales (P) Ltd. as per procedure laid up above to be submitted to us duly supported with the copy of bill. 4. Sale report for the Pre-inspected stock if any shall also be sent to us separately. 5 to 8. x x x 9. You will keep separate sale and stock book for the sale effected by you to M/s. Usha Sales Pvt. Ltd., from our godown. 10. The Sign Board of the Jay Engineering Works Ltd. will be affixed on the godown. We hope that the above procedure is clear to you and in case any further clarification is required, the same may be referred to us". 10. The Sign Board of the Jay Engineering Works Ltd. will be affixed on the godown. We hope that the above procedure is clear to you and in case any further clarification is required, the same may be referred to us". Admittedly all transactions in Kerala between the Company and the Agents during the year 1964-65 were done in accordance with the agreement dated 151962, subject to the modifications contained in the two letters quoted above. 4. For the year 1964-65, the Company as a registered dealer under the Act, submitted a return of its turnover to the Sales-tax Officer at Ernakulam. In addition to the goods purchased by the Agents from the Company, and sold by them to the consumers, the Agents have also sales in other goods to a very limited extent. The Agents also submitted a return of their turnover for the above year to the same Sales-tax Officer. The goods produced by the Company and sold to the Agents are taxable under the State Law only at the point of first sale in the State. Both the Company and the Agents treated the sales effected by the Company to the Agents as first sales in the State; and the Agents treated their sales to the consumers as second sales. Accordingly, in the return of the Company its sales turnover was shown as taxable turnover, and paid the tax thereon, while, the Agents claimed exemption in respect of their sales turnover. These two cases were considered together by the Sales Tax Officer, who held that the sales by the Company to the Agents took place outside the State of Kerala, and that, therefore, the sales by the Agents to the consumers were the first sales in the State. Accordingly he found that the Company was not liable to tax, and ordered the amounts paid by the Company to be refunded to it; while he assessed the Agents on their sale to the consumers. Both the Company and the Agents filed appeals before the Appellate Assistant Commissioner. He disagreed with the finding of the Sales-tax Officer that the sales were outside the State. In his view, the sales by the Company to the Agents took place in the course of inter-State trade; and on that ground he upheld the orders of the Sales-tax Officer. The Company and the Agents again filed appeals before the Appellate Tribunal. He disagreed with the finding of the Sales-tax Officer that the sales were outside the State. In his view, the sales by the Company to the Agents took place in the course of inter-State trade; and on that ground he upheld the orders of the Sales-tax Officer. The Company and the Agents again filed appeals before the Appellate Tribunal. The appeals were dismissed by a common order upholding the finding of the Appellate Assistant Commissioner. The Company and the Agents have, therefore, filed these revision cases. 5. It is true that both these cases arise out of the same facts, and the questions raised therein are also the same. But in our opinion, T. R.G. No. 102 of 1967 is not maintainable. When the Sales Tax Officer held that the Company was not liable to tax under the Act, it was a decision in its favour, though in the opinion of the Company its sales to the Agents attracted tax under the Act. We can understand the Company's apprehension that on the basis of the above finding the West Bengal Government may impose a tax under the Central Sales Tax, 1956 on its sales to the Agents. But the order of the Sales-tax Officer at Ernakulam is not binding on the Company as regards its liability to Central Sales-tax in West Bengal; and its apprehension cannot be recognised under law. At any rate, an order by a Salestax Officer holding that an assessee is not liable to tax is not appealable under the State Act; and therefore the appeals filed by the Company to the Appellate Assistant Commissioner, and then before the Appellate Tribunal were both misconceived. It follows that the Company cannot also be aggrieved by the decision of the Appellate Tribunal; and there is, therefore, no scope to file any revision from the said decision. We however, heard Shri. K. V. Surianarayana Iyer,the learned counsel who appeared in this Tax Revision Case, as the questions raised therein fall for our decision in T.R.C. No. 93 of 1967, and we considered that it would be useful to hear him also. 6. The question whether the Agents, the petitioner in T.R.C. No. 93 of 1967, are liable to sales-tax under the Act depends, as we have already stated, on the fact whether their sales to the consumers are first sales in the State. 6. The question whether the Agents, the petitioner in T.R.C. No. 93 of 1967, are liable to sales-tax under the Act depends, as we have already stated, on the fact whether their sales to the consumers are first sales in the State. Admittedly, this would depend on the question whether the sales by the Company to the Agents take place in the course of inter-State trade as contended for by the Revenue, or in this State as contended for by the Agents. If the said sales take place in this State, the Agents are not liable to tax. S.3 of the Central Sales Tax Act, 1956 lays down when a sale or purchase of goods shall be deemed to take place in the course of inter-State trade; and it is so deemed if the sale or purchase (a) occasions the movement of the goods from one State to another; and (b) is affected by a transfer of documents of title to the goods during their movement from one State to another. The case of the Revenue is that the sales by the Company to the Agents have occasioned the movement of the goods from West Bengal to Kerala, and that the said sales are, therefore, inter-State sales. It is now well-established that a sale or purchase occasions movement of goods from one State to another, only if the goods are moved from one State to another under the contract of sale, or the movement is incidental to the contract of sale. The contention of the Revenue is that the goods moved from West Bengal to Kerala under the agreement between the Company and the Agents executed on 151962 as modified by terms and conditions contained in the two letters of the Company dated 22101967, the relevant portions of which we have already quoted. We are unable to agree. It is very clear from the agreement as it stands modified, that what the Company does is that it transports its own goods from West Bengal to Kerala, stores them in its own godowns at Ernakulam, and sells them to the Agents at Ernakulam according to their requirements, and that pursuant to the said sale, the Agents take delivery of the goods from the Company's godowns. The sale takes place entirely within this State; and the transport of the goods from West Bengal to Kerala is not under the contract of sale, but only for the purpose of sale in this State. The sale never occasioned the movement; on the other hand, the sale was effected after the transport or movement was complete, and the goods came to rest in this State. 7. A number of decisions have been referred to by the Appellate Tribunal in support of its conclusion; and the learned counsel for the Revenue also relied on them. We do not think that any of them can support the contention of the learned counsel; and it is, therefore, unnecessary to refer to them all. We shall, however, refer to two decisions of the Supreme Court, on which the learned counsel placed much reliance. One is the decision in Ben Gorm Nilgiri Plantations Co. v. The Salestax Officer, Special Circle Ernakulam (1964) 15 SCC. 753. In that case tea was purchased in public auction conducted in Kerala State by agents of foreign buyers, and exported out of India by the buyers. It was contended on behalf of the sellers that the sale took place in the course of export, and was not liable to tax. The contention was rejected; and the Supreme Court said: "A transaction of sale which is a preliminary to export of the commodity sold may be regarded as a sale for export, but is not necessarily to be regarded as one in the course of export, unless the sale occasions export. And to occasion export there must exist such a bond between the contract of sale and the actual exportation, that each link is inextricably connected with the one immediately preceding it. Without such a bond, transaction of sale cannot be called a sale in the course of export of goods out of the territory of India." The learned counsel for the Revenue relied on the above passage and submitted that in the instant case, the contract of sale between the parties occasioned the movement of the goods from West Bengal to Kerala, and that the sales by the Company to the Agents were inter-State The argument is based on a misconstruction or misconception of the agreement between the parties The agreement is not one for sale of some specific goods. It is an agreement for purchase of the goods to be manufactured by the Company by the Agents, and for distribution of the same by sale to consumers subject to the terms and conditions contained in the said agreement. Originally the. agreement provided that the agents should take delivery of the goods in West Bengal; and subsequently they agreed in respect of the goods intended for distribution in Kerala that they would be sold by the Company to the Agents at Ernakulam. The transport of goods from West Bengal to Kerala is only for the purpose of sale, and not pursuant to any sale. As a sale for export is not export sale, a transport of the goods from one State to another for sale does not also make that sale an inter-State sale. 8. The other decision of the Supreme Court relied on by the learned counsel for the Revenue is Khosla & Co (P) Ltd. v. Deputy Commissioner of Commercial Taxes, Madras (1966) 17 STC. 473 In that case, the assessee entered into a contract with the Director General of Supplies and Disposals, New Delhi for the supply of "axle-box bodies"'. The goods were to be manufactured in Belgium, imported into India, cleared at the Madras Harbour, and delivered at different places in India as per instructions of the purchaser. The manufacturers despatched the goods to the assessee, who cleared them, and sent them over to the ultimate consumer indicated by the purchaser. As regards goods supplied in Madras under the above contract, the Sales Tax Department contended that it was sale inside the State, and as regards goods delivered outside Madras, it was contended to be inter-State sale. The contention was rejected by the Supreme Court, holding that the sale took place in the course of import. The Court said: "The next question that arises is whether the movement of axle-box bodies from Belgium into Madras was the result of a covenant in the contract of sab or an incident of such contract. It seems to us that it is quite clear from the contract that it was incidental to the contract that the axle-box bodies would be manufactured in Belgium, inspected there and imported into India for the consignee Movement of goods from Belgium to India was in pursuance of the conditions of the contract between the assessee and the Director-General of Supplies. There was no possibility of these goods being diverted by the assessee for any other purpose. Consequently we hold that the sales took place in the course of import of goods within S.5 (2) of the Act, and are, therefore, exempt from taxation." The terms and conditions of the contract between the parties have been referred to in detail in that judgment; and the above conclusion is one entirely based upon the construction of the contract. It is a case where specific goods inspected and approved by the purchaser at Belgium were imported into India and supplied to the purchaser at the place where, under the contract, the seller was obliged to deliver. The manufacture of the goods was under the contract and the import was also under the contract. There was no possibility of the goods being diverted by the seller for other purposes. The agreement between the parties in the case before us is entirely of a different character; and hence the above decision is of no help to the Revenue. 9. In the result, we hold that the sales by the company to the Agents during the year 1964-65 were effected in this State, and that the sale by the Agents are not first sales in the State. Accordingly we allow T. R. C. No. 93 of 1967; and we dismiss T. R. C. No. 102 of 1967, on the ground that it is. not maintainable. The parties will bear their own costs.