JUDGMENT K. P. BALANARAYANA MARAR, J. - These two tax revision cases are filed by the assessee and relate to the assessment years 1975-76 and 1976-77. These cases arise from the order of the Sales Tax Appellate Tribunal, Palghat. Since the assessee is the same and common questions arise for consideration these two tax revision cases are dealt with together. 2. The questions that arise for decision are : (i) Whether the conclusion of the Sales Tax Appellate Tribunal that the transactions are not agency sales is sustainable in law ? (ii) Whether the transactions are really inter-State sales taxable under section 3(a) of the Central Sales Tax Act ? 3. The facts leading to the filling of these tax revision cases are as follows : The assessee-petitioner is a dealer in yarn and other products. He filed return for the assessment years 1975-76 and 1976-77 claiming exemption of turnover effected through their Calcutta depot. The sales were effected under an argument dated August 13, 1975 entered into between the assessee and Sri Mahavir Prasad Suresh Kumar. To the pre-assessment notice the assessee objected and contended that the sales were not inter-State in character and that Sri Mahavir Prasad Suresh Kumar was only a depot keeper. Rejecting those contentions the assessing authority held that the sales were liable to be taxes under the Central Sales Tax Act and completed the assessment by his order dated September 30, 1979. Aggrieved by that order petitioner preferred appeals before the Additional Deputy Commissioner of Agricultural Income-tax and Sales Tax (Appeals), Ernakulam. The first appellate authority also found that the transactions were inter-State in nature. A second appeal was preferred before the Sales Tax Appellate Tribunal, Trivandrum. The appeal was transferred to the Palghat Bench. Rejecting the arguments of the petitioner the Tribunal upheld the view of the lower authorities. The assessee has come up in revisions against the orders of the Tribunal. 4. Heard Sri P. Balachandran, counsel for the petitioner and Sri N. N. Divakaran Pillai, Senior Government Pleader for the respondent. 5. Relying on some of the clauses in the agreement, annexure-A, learned counsel for the assessee would contend that the depot keeper was only an agent of the assessee and not the purchaser of the goods. 4. Heard Sri P. Balachandran, counsel for the petitioner and Sri N. N. Divakaran Pillai, Senior Government Pleader for the respondent. 5. Relying on some of the clauses in the agreement, annexure-A, learned counsel for the assessee would contend that the depot keeper was only an agent of the assessee and not the purchaser of the goods. The agreement describes Sri Mahavir Prasad Suresh Kumar as the depot keeper and petitioner has to open a depot for sale of yarn in the State of West Bengal and appoint a depot keeper for sale of mill's yarn in the above State. It is provided that the depot keeper shall sell the goods and remit the sale proceeds at the earliest possible, adjusting the expenses incurred actually by them. The depot keeper shall not sell for credit, but only for cash. The depot keeper was allowed commission at 2 per cent for all sales made by him on the net value of yarn realised by the mills. The petitioner will not sell goods to anyone else within the State of West Bengal and if any enquiry is received from the dealers of the area, the sale will be directed to the depot keeper and in case any direct sale is made the depot keeper can claim commission of 2 per cent. The petitioner will bear expenses such as cartage and unloading charges incurred at the depot. 6. These clauses are relied on by the counsel to contend that the depot keeper has not purchased the goods whereas he has to function only as an agent. But there are other clauses in the agreement from which it is clear that what was intended is not an agency, but only sale of goods. That is spelt out from clauses 11, 13 and 14. Clause 11 provides that the depot keeper will solely be responsible for any loss that may be incurred by any credit or such other sales or damages of the goods at the depot. Clause 14 says that the depot keeper will cover necessary insurance of stock of the mills from time to time and premium should be borne by the depot keeper only. But the petitioner will bear the cost of transit insurance from the mills premises up to the godown of the depot keeper. Clause 14 says that the depot keeper will cover necessary insurance of stock of the mills from time to time and premium should be borne by the depot keeper only. But the petitioner will bear the cost of transit insurance from the mills premises up to the godown of the depot keeper. The godown rent, staff and correspondence charges incurred at the depot are payable by the depot keeper. 7. Both parties have proceeded on the footing that the transactions in question were effected pursuant to the said agreement. The agreement provides that the depot keeper has the right of sale within the stipulated area. It is true that the price at which the goods will have to be sold to the customers was fixed by the company, but by that itself does not necessarily lead to the conclusion that the depot keeper acts merely as an agent of the company. 8. The Supreme Court in Alwaye Agencies v. Deputy Commissioner of Agricultural Income-tax and Sales Tax, Ernakulam [1988] 70 STC 107 held that it is well-settled that the mere fact that the manufacturer fixes the sale price, by itself, cannot lead to the conclusion that the distributor is merely an agent. The Supreme Court observed that it is significant that under the agreement what the distributor got is described as a "rebate" and not as "commission", as one would normally expect in an agreement of agency. This is a factor which is by no means conclusive, but to a certain extent indicative of the relationship between the said company and the assessee. In that case the supplies were made to the distributor against payment either immediate or deferred as provided in the agreement. It is also significant that where there was some time-lag between the sending of the goods and the payment, the goods were to be insured at the cost of the assessee. This circumstance, according to the Supreme Court clearly shows that in respect of the goods despatched under orders placed by the distributors, the distributors really acted as purchasers of the goods which they in turn sold to the customers and did not merely act as agents of the said company. 9. This circumstance, according to the Supreme Court clearly shows that in respect of the goods despatched under orders placed by the distributors, the distributors really acted as purchasers of the goods which they in turn sold to the customers and did not merely act as agents of the said company. 9. In Bhopal Sugar Industries Ltd. v. Sales Tax Officer [1977] 40 STC 42, the Supreme Court held that the question whether the contract was one of agency or sale has to be determined having regard to the terms and recitals of the agreement, the intention of the parties as may be spelt out from the terms of the documents and the surrounding circumstances and having regard to the course of dealings between the parties. The Supreme Court held that while interpreting the terms of the agreement, the court has to look to the substance rather than the form of it. The mere fact that the word "agent" or "agency" is used or the words "buyer" and "seller" are used to describe the status of the parties concerned is not sufficient to lead to the irresistible inference that the parties did in fact intend that the said status would be conferred. This view was approved by the Supreme Court in [1988] 70 STC 107 (Alwaye Agencies v. Deputy Commissioner of Agricultural Income-tax and Sales Tax). It was held that these descriptions considered in the light of the general tenor of the agreement and circumstances surrounding the transactions between the parties show that the assessee was not agent, but really a purchaser from the company in respect of the goods in question. 10. Both parties having proceeded on the footing that the transactions in question were effected pursuant to the said agreement we have to consider whether the depot keeper was an agent of the assessee or whether he was really a purchaser of the goods which were booked by him. The depot keeper has the right of sale of the goods within the stipulated area. Bulk supplied were effected by the assessee directly to the depot keeper who undertook the responsibility to pay the price of the goods. On a reading of the various clauses in the agreement it is clear that what was intended is not an agency but only the sale of goods. 11. Bulk supplied were effected by the assessee directly to the depot keeper who undertook the responsibility to pay the price of the goods. On a reading of the various clauses in the agreement it is clear that what was intended is not an agency but only the sale of goods. 11. There were also other materials available before the authorities to conclude that the transaction is really one of sale. In the course of investigation the department got possession of some letters written by the depot keeper mentioning about sale of goods by the depot keeper and requests to arrange despatch of goods and also intimating the assessee about remittance of money through the State Bank of Hyderabad. These letters would suggest that the goods were sold to the depot keeper by the assessee. Apart from other materials available the Tribunal has rightly placed reliance on these letters also. 12. In the facts and circumstances of the case we are of the view that the Tribunal was right in holding that there has been a transfer of the property in the goods from the assessee to the depot keeper and that the relationship is not one of the principle and agent. 13. On the second point it is contended by the learned counsel for the assessee that the transactions are not inter-State sales liable to tax under section 3(a) of the Central Sales Tax Act. The contention is that the goods were booked from Kerala State to the State of West Bengal in the name of the assessee and the depot keeper had received those goods on behalf of the assessee. It is further contended that the movement of goods is neither in pursuance to the agreement nor was the movement occasioned by sale. The contention is that the goods were booked from Kerala State to the State of West Bengal in the name of the assessee and the depot keeper had received those goods on behalf of the assessee. It is further contended that the movement of goods is neither in pursuance to the agreement nor was the movement occasioned by sale. In order to ascertain whether the sale has taken place in the course of inter-State trade or commerce we have to refer to section 3(a) of the Central Sales Tax Act which reads : "A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase, - (a) occasions the movement of goods from one State to another; or ........." In order to apply section 3(a) of the Act the conditions to be satisfied are : (i) there is a sale or purchase of goods, and (ii) the sale occasions the movement of goods from one State to another. In Oil India Ltd. v. Superintendent of Taxes [1975] 35 STC 445, the Supreme Court held : "The inter-State movement must be the result of a covenant express or implied in the contract of sale or an incident of the contract. It is not necessary that the sale must precede the inter-State movement in order that that the sale may be deemed to have occasioned such movement. It is also not necessary for a sale to be deemed to have taken place in the course of inter-State trade or commerce, that the covenant regarding inter-State movement must be specified in the contract itself. It would be enough if the movement was in pursuance of and incidental to the contract of sale." 14. The conditions to be satisfied before a sale can be said to take place in the course of inter-State trade or commerce were laid down in Balabhagas Hulaschand v. State of Orissa [1976] 37 STC 207 (SC). It would be enough if the movement was in pursuance of and incidental to the contract of sale." 14. The conditions to be satisfied before a sale can be said to take place in the course of inter-State trade or commerce were laid down in Balabhagas Hulaschand v. State of Orissa [1976] 37 STC 207 (SC). They are : (i) that there is an agreement to sell which contains a stipulation express or implied regarding the movement of the goods from one State to another; (ii) that in pursuance of the said contract the goods in fact moved from one State to another; and (iii) that ultimately a concluded sale takes place in the State where the goods are sent which must be different from the State from which the goods move. If these conditions are satisfied then it is the State from which the goods moved which will be competent to levy tax under the provisions of the Central Sales Tax Act. 15. The law was clarified in Union of India v. K. G. Khosla and Co. Ltd. [1979] 43 STC 457 where the Supreme Court observed that a sale would be an inter-State sale even if the contract of sale does not itself provide for movement of goods from one State to another, provided, however, that such movement was the result of a covenant in the contract of sale or was an incident of that contract. 16. The Supreme Court in Sahney Steel and Press Works Ltd. v. Commercial Tax Officer [1985] 60 STC 301 had occasion to consider this aspect. That was a case where particular goods were manufactured in Hyderabad in satisfaction of an order placed by the buyer who decided delivery outside the State. The goods moved from the registered office at Hyderabad as the result of a covenant in the contract of sale or an incident of that contract that the goods manufactured at Hyderabad according to the specifications stipulated by the buyer should be the very goods delivered to him outside the State. The Supreme Court held that the Commercial Tax Officer was right in holding that the sale transactions were inter-State sales inasmuch as they satisfy the terms of clause (a) of section 3 of the Central Sales Tax Act. 17. The Supreme Court held that the Commercial Tax Officer was right in holding that the sale transactions were inter-State sales inasmuch as they satisfy the terms of clause (a) of section 3 of the Central Sales Tax Act. 17. In English Electric Company of India Ltd. Deputy Commercial Tax Officer [1976] 38 STC 475 the Supreme Court held that when the movement of the goods from one State to another is an incident of the contract it is a sale in the course of inter-State trade and it does not matter which is the State in which 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 manufacture of the goods at the Hyderabad factory and their movement thereafter from Hyderabad to the branch office outside the State was an incident of the contract entered into with the buyer or it was intended that the same goods should be delivered by the branch office to the buyer. It would have been a different matter if the particular goods had been despatched by the registered office at Hyderabad to the branch office outside the State for sale in the open market and without reference to any order placed by the buyer. In such a case if the goods are purchased from the branch office, it is not a sale under which the goods commenced their movement from Hyderabad. 18. Under the agreement entered into between the parties the assessee has to despatch the goods to the destination of the depot areas and forward the relative documents to the depot keeper directly. There is an agreement to sell with a stipulation for transfer of goods from the seller to the buyer. There is movement of goods from one State to another in pursuance to that agreement. In the circumstances the movement of goods should be deemed to have been occasioned by the sale itself. 19. The goods moved in pursuance to the terms of the agreement from the seller in Kerala to the buyer in Calcutta. The movement of the goods from Kerala to West Bengal forms a clear stipulation or is incident of the agreement to sell. The agreement also provides that there has been a transfer of property from the seller to the buyer. The movement of the goods from Kerala to West Bengal forms a clear stipulation or is incident of the agreement to sell. The agreement also provides that there has been a transfer of property from the seller to the buyer. In view of these circumstances there can be no manner of doubt that the sale falls squarely within section 3(a) of the Central Sales Tax Act and since the goods moved from the State of Kerala it is that State alone which is competent to levy the tax under section 9 of the Central Sales Tax Act. 20. We agree with the view of the Tribunal that the transactions are inter-State in character. On both the points no ground exists for interference in revision. In the result these tax revision petitions are dismissed. Petitions dismissed.