JUDGMENT The judgment of the Court was delivered by V. A. MOHTA, J. - The following question is referred under section 23 of the C.P. and Berar Sales Tax Act, 1947 ("the Act"), at the instance of the Commissioner of Sales Tax : "Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the impugned transactions of Rs. 2,07,769-10-3 were sales in the course of inter-State trade and commerce and should therefore be excluded from the taxable turnover of sales ?" The period of assessment ranges between 31st October, 1951 and 18th October, 1952. At the material time, article 286(1)(a) with explanation as it stood before the Constitution (Sixth Amendment) Act, 1956, was the law governing the subject of inter-State sale. 2. Article 286 read as under : "(1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place - (a) outside the State; or (b) in the course of the import of the goods into, or export of the goods out of, the territory of India. Explanation. - For the purposes of sub-clause (a), a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State." The basic undisputed facts are these : During the period of assessment, the Cotton Textile (Control) Order, 1948, was in force. The erstwhile State of Madhya Pradesh was considered as a surplus zone in the matter of cloth and the State of Orissa a deficit zone. No one could purchase, sell or trade in cloth except in terms of the Cotton Textile (Control) Order, 1948 and the permit issued thereunder by the Commissioner. M/s. Umashankar and Co. and M/s. Bachraj Amelakchand were given agents "D" class licence by the Commissioner. Certain persons in Orissa appointed by the Orissa State Government were given "A" class licence. No one could purchase, sell or trade in cloth except in terms of the Cotton Textile (Control) Order, 1948 and the permit issued thereunder by the Commissioner. M/s. Umashankar and Co. and M/s. Bachraj Amelakchand were given agents "D" class licence by the Commissioner. Certain persons in Orissa appointed by the Orissa State Government were given "A" class licence. "A" class licence permitted the licence-holders to purchase the specified cloth and "D" class licence permitted the licensee to deal with specified cloth as nominees of the Commissioner. "D" class licensees could not purchase the cloth. They were agents of the Commissioner for the purposes of facilitating delivery to "A" class licensees, for rendering which services, "D" class licensees were entitled to commission of half per cent. In pursuance of such a permit issued, the two nominees had taken delivery of the specified cloth from the respondent-dealer, M/s. Raisaheb Rekchand Mohta Spinning and Weaving Mills Private Limited, Hinganghat. The permit mentions the details about the area to which the cloth is allotted together with the name of the allottee, "A" class licensees and the name of the nominees, "D" class licensees. Item No. 8 in the specimen permit reads thus : "Orissa Government. 1. Umashankar & Co., Itwari, Nagpur". "D" class licensees as per terms of the licence took delivery of the goods under that permit from the respondent-dealer, paid its price and despatched the goods to the "A" class licensees in Orissa through railway. The Sales Tax Officer as well as the Assistant Commissioner held that these were intra-State sales subject to assessment under the Act. In a revision, the Tribunal set aside those orders of assessment and came to the conclusion that the sales in question were inter-State and, therefore, could not be subjected to sales tax under the State Act in view of provisions contained in article 286(1)(a), explanation. 3. Having heard learned counsel for the parties at length, we entertain no doubt whatsoever that the view taken by the Tribunal about the transactions is absolutely correct. The law on this subject is well-settled. 3. Having heard learned counsel for the parties at length, we entertain no doubt whatsoever that the view taken by the Tribunal about the transactions is absolutely correct. The law on this subject is well-settled. A sale or purchase for the purposes of sub-clause (a) of clause (1) of article 286 is deemed, in view of the explanation, to have taken place in the State in which the goods have been actually delivered as a direct result of such a sale or purchase for the purposes of consumption in that State notwithstanding the fact that under the general law relating to sale of goods, property in the goods has by reason of such sale or purchase passed in another State. But can it be said that these sales or purchases were for the purposes of consumption in the State ? 4. There is no written contract between the "A" class licensees and "D" class licensees specifying the terms and conditions of the transaction. But where the transaction itself is statutorily controlled by the Control Order, the provisions of the Control Order will have to be read as the terms of contract. So read, there can be no manner of doubt that the sale was essentially for the purposes of consumption in Orissa State and no one could effect the sales or divert the cloth to any other place contrary to the permit. 5. To the knowledge of the dealer, "D" class licensees were not and could not legally be the purchasers of the commodity. They were merely handling agents appointed by the Commissioner solely with a view to facilitate compliance with the permit for which they were given remuneration. The "D" class licensees were thus not the agents of "A" class licensees. They were agents of the Commissioner. 6. In fairness to the department, it will have to be stated that the above factual position has never been in dispute. One gets that from the following statement made by the Tribunal in the revisional order as well as the order under reference : "Before us, the department does not dispute the finding of the Tribunal that the transactions in question were sales effected by the respondent to the holders of "A" class licence in the State of Orissa and that there was no sale between the respondent and the nominees." 7. Two decisions relating to the transaction controlled by statutory orders and the permit have been placed before us by the parties. First is the case of State Trading Corporation of India Limited v. State of Mysore [1963] 14 STC 188 (SC). It related to a cement permit. The contract between the parties did not specify a covenant to supply the article from a particular factory but it was subject to permit under which the supply was to be made from the factory outside the State. On the basis of this aspect, the transactions were held to be inter-State sales by the Supreme Court. 8. The other case is Singareni Collieries Co. Ltd. v. Commissioner of Commercial Taxes [1966] 17 STC 197 (SC). That was a case of supply of coal by the collieries under the Colliery Control Order, 1945. Under the said Order, supply, use and disposal of coal were similarly regulated right from the stage of production to the stage of consumption. The Commissioner authorised the collieries to sell certain quantity of coal to specified consumers outside the State for consumption in that State. The consumers requested the colliery to despatch the coal by rail to destinations outside the State. As per those instruction, the colliery loaded the coal in the railway wagons at the risk of the allottee making out a "sale note" mentioning the cost per ton f.o.r. colliery with freight to pay by the allottees. Thus, the property in the goods had passed in the allottees in the State as soon as the railway receipt was prepared. In this background, the Andhra Pradesh High Court came to the conclusion that it was intra-State sale but the Supreme Court reversed that conclusion. 9. These two cases were sought to be distinguished on behalf of the Commissioner on the ground that in the transactions in question, the despatch of the goods outside the State was not made by the dealer but was made by the nominee of the Commissioner. We are unable to see how this distinguishing feature affects the point involved and the ratio decidendi of these two Supreme Court decisions. Had "D" class licensees been the agent of the "A" class licensees, the matter might have stood on a different footing. 10. We are unable to see how this distinguishing feature affects the point involved and the ratio decidendi of these two Supreme Court decisions. Had "D" class licensees been the agent of the "A" class licensees, the matter might have stood on a different footing. 10. Our attention was invited to various decisions by both parties interpreting section 3(a) of the Central Sales Tax Act under which a sale or purchase of goods is deemed to take place in the course of inter-State trade or commerce if the sale or purchase "occasions the movement of goods from one State to another". Law on the point is well-settled and, therefore, it is unnecessary to refer to them. Merely because the goods are intended for being transported outside the State or were in fact so transported, the transaction does not become inter-State sale. For the transaction to become inter-State sale, movement of goods must be occasioned by the terms of the contract or the incident of sale. Passing of the title in the property is not the decisive factor. 11. Clear finding has been reached in this case that the goods were meant for consumption in Orissa State and their movement from one State to another had been occasioned as a direct result of the permit under which only the sale took place and accordingly the goods were actually transported outside the State. 12. We, therefore, answer the question in the affirmative. No order as to costs. Reference answered in the affirmative.