JUDGMENT The judgment of the Court was delivered by SMT. SUJATA MANOHAR, J. - The respondent-assessee caries on the business of manufacturing tarpaulins and cotton canvas at its place of manufacture at Bombay. This is the only place of manufacture of the respondents. The respondents are registered dealers under the provisions of the Bombay Sales Tax Act, 1959, as also under the Central Sales Tax Act, 1965. 2. During the period of assessment April 1, 1964 to March 31, 1965, the respondents entered into a contract with M/s. Gujarat State Road Transport Corporation for manufacture and supply of tarpaulin sheets. In response to a tender dated January 15, 1964, issued by the Controller of Stores, Gujarat State Road Transport Corporation, the respondents sent their quotation dated February 11, 1964, for waterproof tarpaulins. The rates which were quoted by the respondents were f.o.r., Ahmedabad. The goods were to be ready for inspection at the works of the respondents in Bombay in suitable installments. Inspection of tarpaulins was to be carried out at the place of manufacture of the respondents. On getting the goods approved after inspection, the respondents were required to dispatch them to the Gujarat State Road Transport Corporation in the State of Gujarat. Along with their quotation the respondents also submitted samples for approval. 3. The quotation of the respondents was accepted by the Gujarat State Road Transport Corporation. From time to time they sent dispatch instructions to the respondents at Bombay directing the respondents to dispatch tarpaulins to their various divisions in the State of Gujarat. The dispatch instructions contained a clause to the effect that freight and forwarding charges would be borne by the respondents and that the goods should be booked at railway risk and were not to be insured. 4. The goods under the contract were sent by the respondents to their depot at Surat in the State of Gujarat. From Surat the goods were delivered to various divisions of the Gujarat State Road Transport Corporation as per their dispatch instructions. Under the contract the respondents had also put the markings of the purchasers on the tarpaulins manufactured by them as per instructions of the Gujarat State Road Transport Corporation. 5. From Surat the goods were delivered to various divisions of the Gujarat State Road Transport Corporation as per their dispatch instructions. Under the contract the respondents had also put the markings of the purchasers on the tarpaulins manufactured by them as per instructions of the Gujarat State Road Transport Corporation. 5. In the proceedings under the Central Sales Tax Act for the period April 1, 1964 to March 31, 1965, the respondents contended before the Sales Tax Officer that these were not inter-State sales but were local sales taxable under the local sales tax law in the State of Gujarat. This contention was rejected by the Sales Tax Officer. In appeal, the Assistant Commissioner of Sales Tax also rejected the contention of the respondents that these were local sales. In second appeal before the Tribunal however, the Tribunal held that in the circumstances of the present case there was no obligation under the contract for movement of goods from Bombay to Gujarat either expressly or by necessary implication and therefore the various sales in question could not be held to be inter-Sate sales under section 3(a), of the Central Sales Tax Act, 1956. From this judgment of the Tribunal, at the instance of the department, the following question has been referred to us under section 61(1) of the Bombay Sales Tax Act, 1959 : "Whether, on the facts and in the circumstances of the case, the impugned sales of tarpaulins effected by the respondents to the Gujarat State Road Transport Corporation by effecting deliveries of the said tarpaulins at various places in the State of Gujarat, are inter-State sales within the meaning of section 3(a) of the Central Sales Tax Act, 1956 ?" Section 3(a) of the Central Sales Tax Act, 1956, is as follows : "3. A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce it the sale or purchase - (a) occasions the movement of goods from one State to another; or (b) ................" 6. A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce it the sale or purchase - (a) occasions the movement of goods from one State to another; or (b) ................" 6. The Supreme Court in the case of English Electric Company of India Ltd. v. Deputy Commercial Tax Officer reported in [1976] 38 STC 475, has, while interpreting section 3(a) of the Central Sales Tax Act, said, "when the movement of goods from one State to another is an incident of the contract of sale, it is a sale in the course of inter-State trade falling under section 3(a) of the Central Sales Tax Act, 1956. It does not matter in which State the property in the goods passes. What is decisive is whether the sale is one which occasions the movement of goods from one State to another. The inter-State movement must be the result of a covenant, express or implied, into each contract of sale or an incident of the contract ...... It will be enough if the movement is in pursuance of and incidental to the contract of sale". This decision of the Supreme Court was railed upon in a subsequent Supreme Court decision in the case of South India Viscose Ltd. v. State of Tamil Nadu reported in [1981] 48 STC 232. The Supreme Court in that case said that if there is a conceivable link between a contract of sale and the movement of goods from one State to another in order to discharge the obligation under the contract of sale, the interposition of an agent of the seller who may temporarily intercept the movement will not alter the inter-State character of the sale. 7. In the case before the Supreme Court the appellant who was a registered dealer had supplied art silk yarn to certain allotment card-holders in Maharashtra and Gujarat under the scheme of allotment of indigenous art silk yarn of the Government. The appellant had an agent in Bombay through whom delivery of goods was effected to the card-holders in the State. The Supreme Court said that the goods were sent by the appellants to their agent in Bombay, pursuant to the contract of sale with the card-holders in the State. The appellant had an agent in Bombay through whom delivery of goods was effected to the card-holders in the State. The Supreme Court said that the goods were sent by the appellants to their agent in Bombay, pursuant to the contract of sale with the card-holders in the State. The interposition of the selling agent who acted on behalf of the appellant in the preparation of the invoice and the delivery of the goods did not alter the true character of the sale as the selling agent was just a conduit pipe. The goods having been dispatched from one State to another pursuant to a contract of sale which came into existence directly between the appellant and the buyer, the sales effected by the appellant were inter-State sales. 8. There are similar observations of the Supreme Court in the case of Balabhagas Hulaschand v. State of Orissa reported in [1976] 37 STC 207 and Sahney Steel and Press Works Ltd. v. Commercial Tax Officer reported in [1985] 60 STC 301. See also in this connection Oil India Ltd. v. Superintendent of Taxes reported in [1975] 35 STC 445 (SC). 9. In the present case we have to see whether the movement of goods from Maharashtra to Gujarat is either under the contract of sale or incidental to the contract of sale. The contract in the present case is entered into directly with the buyers in Gujarat by the respondents who are the manufacturers and dealers of these goods in Bombay. Under the contract the goods were required to be delivered by the respondents f.o.r., Ahmedabad in the State of Gujarat. The subsequent delivery instructions required the respondents to supply these goods at certain other depots of the purchaser in Gujarat. 10. It is true that the respondents sent the goods to their agent at Surat in Gujarat. This agent, in turn, effected delivery to the various depots of the purchaser in Gujarat. But, in our view, in the present case the agent at Surat has merely acted as a conduit pipe for the purpose of supply of these goods to the purchaser in Gujarat. The contract of sale was directly with the respondents. The goods were marked with the stamp which indicated that they were earmarked for the purchasers in Gujarat. But, in our view, in the present case the agent at Surat has merely acted as a conduit pipe for the purpose of supply of these goods to the purchaser in Gujarat. The contract of sale was directly with the respondents. The goods were marked with the stamp which indicated that they were earmarked for the purchasers in Gujarat. It has also been found that there was no other stock of goods with the respondent's agent at Surat either before or after the supply of these goods. The Assistant Commissioner also found that there was no separate account of branch transfer in the books of account of the respondents. Taking all these circumstances together, in our view, the dispatch of goods by the respondents to their agent at Surat cannot be looked upon as a branch transfer in the ordinary course of business of the respondents. The goods were supplied as per contract specifications to the agent at Surat for the purpose of delivery to the buyers in Gujarat. No other goods were sent generally to the agents at Surat by the respondents. In these circumstances, in our view there is a direct nexus between the contract and the movement of goods from Maharashtra to Gujarat. 11. It was submitted by Mr. Gaitonde, learned advocate, who very gracefully agreed to appear amicus curiae for the respondents, that the mere fact that the goods had markings of the purchaser would not be conclusive of the question before us. Because it may be that the goods may be sent by the supplier to its branch in another State as a branch transfer although they may bear the markings to indicate that they can be supplied by the branch to the buyers in that State. He relied upon two decisions of the Madras High Court in the case of Indian Duplicators Ltd. v. State of Tamil Nadu reported in [1984] 57 STC 263 and State of Tamil Nadu v. Hercules Rubber Co. Reported in [1983] 54 STC 85. In both these cases the contract for supply of goods was entered into by the branch office of the manufacturer with the local buyer. The manufacturer who was in another State, sent the goods to its agent in the other State. The agent supplied the goods to the local buyer. The goods so supplied by the manufacturer had borne the markings of the ultimate buyer. The manufacturer who was in another State, sent the goods to its agent in the other State. The agent supplied the goods to the local buyer. The goods so supplied by the manufacturer had borne the markings of the ultimate buyer. The Madras High Court, after examining the circumstances, held that the goods manufactured had been sent to the branch of the manufacturer in another State in the normal course as a branch transfer and the agreement of sale was entered into between the branch office of the manufacturer and the local purchaser. In these circumstances it could not be considered as an inter-State sale. 12. The circumstances in the present case, however, are somewhat different. There is no material before us to show that there were any regular branch transfers from the manufacturer to his agent at Surat or that the gods were sent to Surat in the normal course of business as branch transfers. The contract in the present case is not with the agent at Surat but directly with the manufacturer in Bombay who have supplied the goods as per the requirements of the contract, to their agents in Surat for delivery to the buyers. In these circumstances in our view the ration of the two Madras cases would not apply to the facts of the present case. 13. It was next submitted by Mr. Gaitonde that one of the relevant test for determining the character of the sale is whether there is any possibility of the goods being diverted by the branch agent to another buyer. In this connection he drew our attention to the judgments of the Supreme Court in the case of K. G. Khosla and Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxes, Madras Division, Madras reported in [1966] 17 STC 473 and Deputy Commissioner of Agricultural Income-tax and Sales Tax, Ernakulam v. Indian Explosives Ltd. reported in [1985] 60 STC 310. Mr. Jetly, learned advocate for the applicant, referred in this connection to the case of Binani Bros. (P.) Ltd. v. Union of India reported in [1974] 33 STC 254 (Sc). These three case deal with sales in the course of import. We are not directly concerned with the various aspects of to sale in the course of import, which are discussed in the above three judgments. (P.) Ltd. v. Union of India reported in [1974] 33 STC 254 (Sc). These three case deal with sales in the course of import. We are not directly concerned with the various aspects of to sale in the course of import, which are discussed in the above three judgments. Even if we assume that the test of goods being capable of being diverted to another purchaser as a relevant test in our case, the facts in the present case leave no doubt that the goods were in fact manufactured as per the contract, they bore the markings of the purchaser and were sent to the respondents' agent at Surat for the purpose of being delivered to the purchaser. There was no question therefore, of the goods being diverted to another purchaser in the present case. In our view therefore there is a direct nexus between the contract and the movement of goods from the State of Maharashtra to the State of Gujarat. The sale is, therefore, in the course of the inter-State trade and commerce. The question, therefore, is answered in the affirmative and in favour of the department. In the circumstances there will be no order as to costs. We are very grateful to Mr. Gaitonde who has appeared amicus curiae on behalf of the respondents who would otherwise have gone unrepresented, and has rendered us valuable assistance. Reference answered in the affirmative.