JUDGMENT BALAKRISHNA ERADI, C.J. The Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam, has filed this revision petition seeking to revise the order of the Sales Tax Appellate Tribunal, Additional Bench, Kozhikode, dated 30th June, 1978, in T.A. No. 317 of 1978 allowing a second appeal filed by the assessee before the Tribunal and holding that a turnover of Rs. 23,49.766.80 relating to sale of goods (hill produce) effected by the assessee to Messrs. Rasul & Co., Bombay, during the year 1970-71 is not liable to be assessed under the Central Sales Tax Act, as the sales in question were local sales within the Kerala State and not inter-State sales. 2. The assessee is a dealer in hill produce at Kozhikode. For the assessment year 1970-71 the assessing authority originally assessed the dealer on a taxable turnover of Rs. 60,75,941.33. Subsequently it was found out that certain transactions of sale effected by the assessee to Messrs. Rasul & Co., Bombay, amounting to Rs. 23,49,766.80 had escaped assessment. The assessing authority was of the opinion that the said turnover related to inter-State sales. Hence by notice dated 4th March, 1975, it called upon the assessee to show cause why the said turnover should not be assessed to Central sales tax. The assessee filed objections but they were overruled by the assessing authority and a revised assessment was made taxing the turnover of Rs. 23,49,766.80 at 10 per cent. On appeal filed by the assessee the Deputy Commissioner (Appeals), Kozhikode, by order dated 1st December, 1976, set aside the order of assessment and remitted the matter to the assessing authority. After the remand the assessing authority assessed the dealer on a taxable turnover of Rs. 33,28,889 as escaped turnover applying only the rate of 3 per cent since the assessee had, by then, produced C form declarations. The said assessment was confirmed in appeal by the Deputy Commissioner (Appeals) by order dated 17th March, 1978. The assessee thereupon took up the matter in second appeal before the Tribunal. One of the contentions urged by the assessee before the Tribunal was that the transactions in question were sales "in the course of export" and hence not exigible to tax at all. The appeal was heard by a Bench of the Tribunal consisting of the Chairman and two Members. One of the contentions urged by the assessee before the Tribunal was that the transactions in question were sales "in the course of export" and hence not exigible to tax at all. The appeal was heard by a Bench of the Tribunal consisting of the Chairman and two Members. All the Members of the Tribunal concurred in holding that the aforesaid contention put forward by the assessee that the turnover related to sales in the course of export was unacceptable pointing out that there was no privity of contract between the assessee and the foreign buyers, and the assessees were merely third parties to the contract between the foreign buyers and Messrs. Rasul & Co. to whom the goods were sold by the assessee. The Tribunal held that the mere mention of the f.o.b. price in the contract between the assessee and Messrs. Rasul & Co., Bombay, will not render the transactions sales effected in the course of export. 3. The Tribunal further found that the turnover relating to the sales effected by the assessee to Messrs. Rasul & Co., Bombay, during the year 1970-71 aggregated to Rs. 23,49,766.80. On the question as to whether the said turnover was liable to be subjected to Central sales tax divergent views were taken by the three different Members of the Tribunal in separate orders passed by them. The Chairman took the view that the sales were inter-State sales and hence exigible to tax under the Central Sales Tax Act. According to the Accounts Member, the sales in question took place outside the Kerala State and hence were not liable to be taxed by the State authorities. The Departmental Member took the view that the sales effected by the assessee to Messrs. Rasul & Co. were merely local sales and hence they were not exigible to tax under the Central Sales Tax Act. Since the Accounts Member and the Departmental Member had expressed their conclusion (though for totally different reasons) that the sales in question were not inter-State sales, the appeal filed by the assessee was allowed in accordance with the said majority opinion and the assessment to Central sales tax was set aside. Hence this revision petition by the revenue. 4. Since the Accounts Member and the Departmental Member had expressed their conclusion (though for totally different reasons) that the sales in question were not inter-State sales, the appeal filed by the assessee was allowed in accordance with the said majority opinion and the assessment to Central sales tax was set aside. Hence this revision petition by the revenue. 4. The sole question that arises for determination before us is whether, on the facts and circumstances of the case, the Tribunal (majority view) was right in holding that the sales in question were not inter-State sales and not exigible to tax under the Central Sales Tax Act. The transactions between the assessee and Messrs. Rasul & Co., Bombay, had originated as per the agreement dated 1st April, 1970. In the said agreement the assessee is referred to as the sellers and Messrs. Rasul & Co. as the buyers. The Tribunal has extracted in its order the relevant clauses contained in that agreement and it is necessary to reproduce them here : "1. The sellers have agreed to execute the orders received from time to time from the buyers by phone or telegrams or by letter for supply of the required quantity of export quality dry ginger with Agmark certificates in ready condition in the course of export to Jeddah and the purchasers have agreed to purchase the same on f.o.b. basis to be shipped from Cochin or Calicut by the seller taking the bill of lading in the name of the buyers and insurance to be arranged on account of buyers. 2. It is hereby agreed that all the export quality dry ginger sold by the sellers to the purchasers shall be deemed to have been sold on f.o.b. basis unless otherwise agreed to in writing. The liability of the buyer to pay for the goods sold shall not cease under this condition even if the goods are arranged to he despatched by the seller to some other port or harbour in response to the desire of the buyers to ship from such port or harbour and if such a procedure is adopted the seller shall he deemed to retain the title over the goods until the goods are put on board the ships whether the payment therefor has been received by the seller or not. 3. 3. It is expressly stipulated that the seller shall he bound to put export markings on the goods sold showing the marks 'GRC' GR Jeddah, since the goods are to be exported to Jeddah and should be supported by Agmark certificate necessary in the case of goods being exported outside India specially Jeddah and Bahrain. 4. The date of delivery stated in the order of contract shall not be the essence of the contract. The seller shall not be responsible for delay in performance of this contract partly or wholly due to act of God or any other event or circumstances whatsoever beyond the control of the sellers. 5. The seller has the full right to cancel part or whole of the contract if under unforeseen circumstances the seller is not able to get the requisite Agmark certificate for the export quality dry ginger. 6. It is mutually agreed that either party can have remedy by way of damages for breach of contract only, viz., the seller cannot as of right claim value of the goods unless and until the goods are put on board the ship in trim condition and quality according to specification on its journey to Jeddah and the buyer cannot as of right claim delivery in any manner other than on board a ship on its journey to Jeddah from Cochin or from Calicut. 7. The buyer has to take steps to insure the goods sold as soon as the same is put on board the ship at Cochin or Calicut. The seller shall he entitled to charge the value of goods at the rate agreed to as the price of goods ex-shop-godown rate plus the expenses for empty gunnies stitching weighing threads weighing with costs for Agmark certificate as also sales tax amounts payable under the K.G.S.T. Act, 1963, and expenses legitimately incurred by the sellers on behalf of the buyers. The f.o.b. expenses in respect of shipments effected from Calicut shall be at Rs. 15 per quintal only to be charged separately. The f.o.b. expenses for arranging to take the goods from Calicut to Cochin and to put the goods on board the ship at Cochin at the rate of Rs. 20 per quintal has to be charged separately if shipped from Cochin. 15 per quintal only to be charged separately. The f.o.b. expenses for arranging to take the goods from Calicut to Cochin and to put the goods on board the ship at Cochin at the rate of Rs. 20 per quintal has to be charged separately if shipped from Cochin. If, however the buyer requests the goods to be put on board at any port other than Cochin or Calicut and the seller in response to the desire of the buyer arranges to despatch the goods to the other port named by the buyer the seller shall be entitled to send the goods from Calicut to the port named in his own name drawing amounts through a bank on the security of the goods despatched by rail or steamer or lorry from their bankers and draw hundies (D.Ds.) on the seller for the value of the goods ex-ship rate plus expenses for gunnies stitching thread weighing loading in lorry or steamer or rail with Agmark certificate as also sales tax amounts payable under the K.G.S.T. Act, 1963, and other expenses like postage, etc., and to insure the goods on account of the buyers and the buyers undertake to honour the D. Ds. when presented through bankers and to arrange to pay the railway freight and/or steamer freight and/or lorry freight and to take delivery of the goods as agent of the seller and to incur the expenses therefor and to arrange to put on board the ship at the put so named by the buyer taking the bills of lading in the buyer's name incurring the necessary expenses therefor as agents for the sellers. The sellers shall be entitled to charge Rs. 30 per quintal as f.o.b. charges by separate bill if the port is Bombay (Rs. 25 if Mangalore) towards the expenses for freight to lorry or steamer or rail and expenses for arranging it to be taken to the port and loading the same on board the ship and the buyers shall account in respect of the expenses incurred by them in respect of the goods acting as agents for the sellers adjusting the f.o.b. charges of Rs. 30 which the seller is entitled to charge if the port is Bombay (Rs. 25 if the port is Mangalore). 30 which the seller is entitled to charge if the port is Bombay (Rs. 25 if the port is Mangalore). The parties agree further that the option to have the goods put on board a ship at any port other than Cochin or Calicut can he only Mangalore or Bombay. On the buyer accounting in respect of the f.o.b. expenses incurred by him as agent of the seller in respect of the goods despatched on the desire of the buyer to Mangalore and/or Bombay the seller shall he bound to pay the balance amounts if any due to the buyer on adjustment of the f.o.b. charges of Rs. 25 or Rs. 30, as the case may be, in respect of shipments from Mangalore or Bombay. If however the amounts spent by the buyer are much less than Rs. 25 or Rs. 30 as shown above in respect of shipment from Mangalore or Bombay the buyer shall be bound to pay the difference in amounts to the seller. 8. In all cases where the goods are despatched from Calicut to Bombay or Calicut to Mangalore it is expressly agreed that the ownership over the goods shall be deemed to pass only after the goods are put on board the ship on its journey to Jeddah and the buyer shall be entitled to reject the goods if the goods are not according to order and specification and do not conform to the export quality of dry ginger or if the goods are not supported by Agmark certificate required and essential for its export to Jeddah. The buyer is entitled to demand fresh supplies of dry ginger in substitution of the rejected quantity of dry ginger if any found on inspection of the goods on board the ship on its journey to Jeddah and if the seller fails to supply the same the buyer will have recourse only for damages if any actually suffered by him as a result of the said non-compliance. The buyer in such cases can demand delivery on board the ship at Cochin or Calicut only and not in any other port or harbour." On a combined reading of the aforesaid clauses contained in the agreement it becomes clear that the assessee had agreed to sell to Messrs. Rasul & Co. The buyer in such cases can demand delivery on board the ship at Cochin or Calicut only and not in any other port or harbour." On a combined reading of the aforesaid clauses contained in the agreement it becomes clear that the assessee had agreed to sell to Messrs. Rasul & Co. against orders received from the latter from time to time by phone or telegram or by letter the required quantity of export quality dry ginger with Agmark certificates on f.o.b. basis for export by ship to Jeddah from the ports of Cochin or Calicut, the bill of lading being taken in the name of Messrs. Rasul & Co., on whose account insurance was also to be arranged. The assessee was to retain the title over the goods until the goods were put on board the ship and its right to claim the value of the goods was to accrue only when the goods were placed on board the ship in trim condition and quality. The buyer (Messrs. Rasul & Co.) could not as of right claim delivery in any manner other than on board the ship sailing to Jeddah from Cochin or from Calicut. The buyer (Messrs. Rasul & Co.) was to take steps to insure the goods sold as soon as the goods are put on board the ship. In case the buyer requested that the goods should be put on board at any port other than Cochin or Calicut and the seller, in response to the said request, arranges to despatch the goods to the other port named by the buyer the seller shall be entitled to consign the goods in his own name from Calicut to the port designated by the buyer and draw hundies or demand drafts on the buyer for the value of the goods plus railway freight and other expenses. It is further provided in clause 7 that in such a case the buyer, after honouring the hundies or demand drafts presented through bankers, will take delivery of the goods as agent of the seller and arrange to put them on board the ship at the ports so named by the buyer taking the bills of lading in the buyer's name incurring the necessary expenses therefor as agent of the seller. It is made clear in clause 8 that in all cases where the goods are despatched from Calicut to Bombay or Mangalore the ownership over the goods shall be deemed to pass only after the goods are put on board the ship and the buyer shall be entitled to reject the goods if the goods are not according to the specification and are not of export quality. 5. On 5th April, 1970, Messrs. Rasul & Co. wrote a letter to the assessee instructing the latter to despatch the goods covered by order No. B-1 dated 1st April, 1970, from Calicut to Bombay for shipment to Jeddah since it found it difficult to make arrangements for finding suitable ships at Cochin and Calicut and the freight payable at Bombay was also much less. Pursuant to the said instructions the assessee despatched the goods to Bombay under cover of an invoice showing the value of goods, incidental expenses, purchase tax, surcharge, insurance and postage. It was shown in the invoice that the goods were despatched to Bombay on f.o.b. basis as per the agreement for shipment to Jeddah. As rightly held by the Tribunal, though the goods have been purchased from the assessee by the buyer for export there is no privity of contract at all between the foreign buyer and the assessee and the mere fact that there is mention of f.o.b. price in the agreement between the assessee and Messrs. Rasul & Co. will not render the contract f.o.b. contract with the foreign buyers vis-a-vis the assessee. The goods have been put on board the ships by the assessee only as directed by the buyer, Messrs. Rasul & Co., as part of the arrangements of supply of goods by the assessee to Messrs. Rasul & Co. which is entirely independent of the contract for export entered into between Messrs. Rasul & Co. and their foreign buyers in respect of which the assessee was a total stranger. What we are concerned with in this case is to determine whether the transactions of supply of dry ginger effected by the assessee to Messrs. Rasul & Co. by sending the goods to Bombay pursuant to the instructions contained in the buyer's letter dated 5th April, 1970, are inter-State sales. From the facts narrated above it will be seen that there was an agreement entered into between the assessee and Messrs. Rasul & Co. by sending the goods to Bombay pursuant to the instructions contained in the buyer's letter dated 5th April, 1970, are inter-State sales. From the facts narrated above it will be seen that there was an agreement entered into between the assessee and Messrs. Rasul & Co., whereby the assessee had undertaken to sell the goods to the buyer in accordance with the orders to be placed by the latter and the goods were to be delivered by the assessee on board the ships at Cochin, Calicut or any other port that may be designated by the buyer. It is also clearly established that pursuant to the stipulation contained in clause 7 of the agreement and the instructions issued by the buyer as per the letter referred to above the assessee had agreed to despatch the goods to Bombay and place them on board the ship in the port of Bombay. The goods, in fact, moved from the State of Kerala to Bombay in the State of Maharashtra pursuant to the aforesaid agreement and a concluded sale had taken place in respect of the goods. Clause 8 of the agreement specifically states that in all cases where the goods are despatched from Calicut to Bombay or Mangalore the ownership over the goods shall be deemed to pass only after the goods are put on board the ship at those ports and the buyer shall he entitled to reject the goods if, after inspection, the goods are not found to be in accordance with the specification or do not conform to export quality standard. Judged in the light of the principles laid down by the Supreme Court in Balabhagas Hulaschand v. State of Orissa ([1976] 37 S.T.C. 207 (S.C.).), Manganese Ore (India) Lid. v. Regional Assistant Commissioner of Sales Tax, Jabalpur ([1976] 37 S.T.C. 489 (S.C.).), English Electric Company of India Ltd. v. Deputy Commercial Tax Officer ([1976] 38 S.T.C. 475 (S.C.).) and Union of India v. K. G. Khosla and Co. Ltd. ([1979] 43 S.T.C. 457 (S.C.).), it appears to us to be clear beyond doubt that the sales in question were inter-State sales. The contract of sale contained a stipulation for the movement of the goods from Calicut in Kerala State to Bombay and inter-State movement of the goods had been occasioned by reason of the said covenant in the contract of sale. The contract of sale contained a stipulation for the movement of the goods from Calicut in Kerala State to Bombay and inter-State movement of the goods had been occasioned by reason of the said covenant in the contract of sale. We may also mention that clause 8 of the agreement specifically provides that the ownership of the goods shall be deemed to pass only after the goods are put on board the ship at the port of Bombay and accepted by the buyer after inspection on board the ship. As pointed out by Chandrachud, C.J., in Union of India v. K. G. Khosla and Co. Ltd. ([1979] 43 S.T.C. 457 (S.C.).) the question whether a particular transaction is an inter-State sale or an intra-State sale does not depend upon the circumstance as to in which State the property in the goods passes. It may pass in either State and yet the sale can he an inter-State sale. What is really decisive is whether the sale is one which has occasioned the movement of goods from one State to another. In the case before us there has been an inter-State movement of goods from Calicut to Bombay as an incident of the contract of sale. The sales in question were neither outside sales nor local sales as wrongly thought by the two members of the Tribunal constituting the majority. We hold that the turnover in dispute related to transaction of inter-State sales and was rightly brought to tax under the Central Sales Tax Act by the assessing authority and the Deputy Commissioner. We accordingly allow this revision petition, set aside the order of the Tribunal and restore the order of the assessing authority. The parties will bear their respective costs. Petition allowed.