1. Liability of the petitioners to pay local sales tax in accordance with the note appended to the tendered document and the validity thereof, is the principal question involved in this batch of petitions. All these petitions revolving around the above said question involve common questions of fact and law. There are three categories of writ petitions relating to the sale of auctioned goods to be lifted by the successful tenderers from various locations in the State of Jammu and Kashmir . First category of petitions relate to sale of brass and other miscellaneous military disposable goods. In the second category, goods involved are discarded unserviceable vehicles and other iron goods including iron scrap. Third category relates to sale of goods lying in Leh where there is tax exemption in respect to all kinds of taxes within the local area. 2. Relevant admitted factual backgrounds may be noticed. The goods put to auction / tenders belong to Ministry of Defence, Government of India, which shall hereinafter referred to be as "stock holders". The Union of India appointed M/s Metal Scrap Trading Corporation for carrying out the auction of the stocks on behalf of the Union of India in short to be referred as "M.S.T.C. Limited", which is Government of India Enterprises. Tenders are floated by M.S.T.C. Limited( Respondent-2) from its Delhi office at Parkash Deep, 7th Floor, 7 Tolstoy Marg, New Delhi. The tenderers were required to submit the tenders in the prescribed form only in the sealed covers addressed to MSTC Limited Domestic Trade Division and put in the tenders box at its office in New Delhi. Notice inviting tenders contained various conditions for submission of the tenders and since there is no dispute regarding the eligibility of any of the tenderers in these petitions, the same are not being referred to. It is also admitted case of the parties that all the writ petitioners before the court in these petitions were the successful tenderers, who have successfully secured the tenders in their favour and purchased the goods /stocks lying at locations/places indicated in the NIT as also the purchase orders. There is also no dispute regarding the sale/purchase price. It is also admitted case of the parties that all the writ petitioners before the court in these petitions were the successful tenderers, who have successfully secured the tenders in their favour and purchased the goods /stocks lying at locations/places indicated in the NIT as also the purchase orders. There is also no dispute regarding the sale/purchase price. The only dispute that has been raised, relate to the liability of the petitioners to pay local sales tax in terms of the note appended to amended special terms and conditions of tender, which reads as under: "Since local sales tax will be charged on the entire sales under this tender, clause 9.2 of general terms and conditions is not applicable". 3. Besides challenging legality and validity of this note, petitioners have also sought further direction to accept "C- Form (Declaration) for payment of concessional rate of tax under the provision of Central Sales Tax Act. In some cases relating to goods lying at Leh, a direction is sought for total exemption of tax in terms of Notification SRO 40 dated 8.3.1995, which inter alia provides exemption from payment of sales tax in respect to all sales made in the territory of Leh. 4. In some of the writ petitions, replies have been filed by the MSTC Limited .However, the Union of India has not filed the reply in any of the case and in some of the cases, where ever the State is party, some replies have been filed. 5. In some of the writ petitions, the rate of tax applicable to the stocks, has also been challenged. Reference to the same shall be made at the appropriate stage hereinafter. 6. Admittedly, tenders were issued by the MSTC Limited from its Delhi Office referred-to-above. These tenders were to be received at Delhi and tenders were opened on the prescribed date at Delhi and even the contract agreement/ sale order, acceptance letters issued in favour of the tenderers at Delhi. However, it is admitted case of the parties that the goods covered by NIT and the sale order were lying in the State of Jammu and Kashmir wherefrom the same were to be lifted by the purchasers. 7. Learned counsel appearing for" MSTC Limited" Mr. However, it is admitted case of the parties that the goods covered by NIT and the sale order were lying in the State of Jammu and Kashmir wherefrom the same were to be lifted by the purchasers. 7. Learned counsel appearing for" MSTC Limited" Mr. V.K. Shali raised a preliminary objection in respect to the jurisdiction of the J&K High Court to entertain these petitions According to him, the entire contract came into being at Delhi and lifting of goods being only an incident of completed transaction of sale, it is only the Delhi Courts, which have the territorial jurisdiction to entertain the writ petitions and adjudicate upon the issue involved. According to him, the courts in the State of Jammu and Kashmir have no jurisdiction to entertain these petitions. Before this question is taken up for consideration, it is deemed necessary to briefly notice the terms and conditions governing the contract. The tender document contains general terms and conditions of tender as also the special terms and conditions. Relevant extract of these terms and conditions is being reproduced hereunder: "Date, time & Venue of Tender: 17.2.2003 at 2.30 PM @TBLCEN = IMPORTANT TERMS AND CONDTIONS 1. .......... 2. ................. 3. LOCAL SALES TAX WILL BE CHARGED ON THE ENTIRE SALE. @TBLCEN = IMPORTANT GUIDELINES TO PURCHASAER 1. ................. 2. ................. 3. The tenderer must collect his Delivery order personally from MSTC officer during working hrs. after duly endorsing the delivery order. In case of his inability to collect the same any other representative may come with clear authority letter authorize him to collect delivery order from MSTC and lift material from the delivery order. Note: SINCE LOCAL SALES WILL BE CHARGED ON THE ENTITRE SALES UNDER THIS TENDER, CLAUSE 9.2 OF GENERAL TERMS AND CONDITIONS IS NOT APPLICABLE. @TBLCEN = GENERAL TERMS AND CONDITIONS OF TENDER 4. Quality and Quantity 4.1. The goods will be sold on "As is where is" basis in so far as the physical condition of the same is concerned. That is to say the tenderer (s) will be deemed to have made themselves aware of the physical conditions, dimensions, size, weight, working conditions etc. by inspecting the material before submitting their tender and no complaint /claim in this regard will be entertained by MSTC after the submission of the tender. 5. That is to say the tenderer (s) will be deemed to have made themselves aware of the physical conditions, dimensions, size, weight, working conditions etc. by inspecting the material before submitting their tender and no complaint /claim in this regard will be entertained by MSTC after the submission of the tender. 5. INSPECTION 5.1 The material quoted for may be inspected at the Stock holders site by prior appointment with the concerned department of the stock holder and by observing the usual entry procedure in the works of the stock holder. The discretion to allow any person to inspect the store would rest solely with the stock holder and the mere fact or producing the tender paper at the concerned works of the Stock holder will not confer any such right on the person concerned. 9. SALES TAX/EXCISE DUTIES AND LEVIES 9.1 All taxes including sales tax or other levies applicable on the transaction under the provincial, local or central taxes in force for the time being or enforced thereafter having its impact on the transaction will be to tenderers account and shall be deposited by him alongwith cost of the material. 9.2 In case of incidence of Central Sales Tax on the transaction the materials will have to be transported by the buyer(s) through a Registered Public Transport Contractor across the state border and a copy of goods Receipt Note duly signed by the consignee will have to be sent by the buyer(s) to the consignor. 9.3 The materials to be purchased by the tenderer shall be subject to all such duties (including excise duty) as may be applicable from time to time and the same shall have to be born by the buyer. 9.4 Whatever rate of excise duty/ sales tax/ other levies etc. if any, be assessed /applicable on the date of actual removal/lifting of material shall be paid by the buyer(s). 9.5 The buyer(s) will be responsible to comply with provision of the Central and State Excise and Salt Act and the Sales Tax Act of concerned State and the rules framed there -under and also by the order or instructions issued in this behalf by the appropriate authority. 9.6 .......... 9.7 Tenderers wishing to avail of local sales tax concession against from may note the following points for compliance: (a) Every declaration from should contain registration number of the dealer. 9.6 .......... 9.7 Tenderers wishing to avail of local sales tax concession against from may note the following points for compliance: (a) Every declaration from should contain registration number of the dealer. (b) Sales tax declaration form should be properly and fully filled up by dealer legibly without any cutting/over writings. (c) The declaration form should contain P.O. number duly filled in by sales tax authority. (d) The signature in the declaration from should match that on the sales tax registration certificate of the dealer. (e) Original Sales Tax Registration certificates should be produced as and when demanded by MSTC/Owners. (f) Items for which sales tax declaration form is issued should be covered by the registration certificate . Items should be clearly mentioned on the form. (g) Sales tax form complete in all respects as above should be submitted alongwith the payment towards material value. Any delay in submission of the same will not be accepted and full tax is to be deposited in such cases. DELIVERY 11.1 The buyer(s) shall lift the material lying I the lot quoted for employing their own labour and transport their own cost from the area within time stipulated in the Special Terms and Conditions of Tender or within such time as may be prescribed in the delivery order. The buyer(s) shall lift the material only the lot /site/space as may be earmarked /demarcated by the Stock holder from time to time which should be final and binding on the buyer(s) and they shall follow the rules and regulations and working hours as may be fixed by the stock holder. The buyer(s) shall lift the quantity only after fulfilling the provisions of advance payments and issue of Delivery Order by the competent authority. The buyer(s) shall follow the procedure for taking the material out of the stock holder premises as prevailing in the respective works of the stock holder. The buyers shall not be allowed on weekly holiday and closed holidays observed by the stock holder. 11.2 The materials will have to be removed on ` As is where is basis at the buyers own cost . No processing other than as may be required for convenient transportation will be permitted at the sole discretion of stock holder before removal from the stock holders premises. The buyer(s) shall not be provided with any equipment including dozer, scrapper, gas, power water facilities etc. No processing other than as may be required for convenient transportation will be permitted at the sole discretion of stock holder before removal from the stock holders premises. The buyer(s) shall not be provided with any equipment including dozer, scrapper, gas, power water facilities etc. by the stock holder. The buyer(s) have to arrange for any of these at their own cost and they shall take prior permission from the Stock holder for this purpose. 11.3 The location where the lots are lying are one of the areas of active works. Under no circumstances shall the operation of the buyer(s) interrupt/interfere with the normal operation of the stock holder. Further the buyer(s) shall not indulge in any operation which could interfere with stock holders plant installation if any, in their vicinity of the site. If any damage or loss is caused to the employees or the property of the stock holder or if any claims are made against MSTC/Stock holder by reason of any acts of commission or negligence on part of the buyer(s) or on the part of the agents, representatives or employees, MSTC shall be entitled to recover such losses or damages or claim as may be ascertained by the stock holder (Which ascertain shall be final and binding on the buyer) from any amount due to the buyer(s) including the advance made/to be made by the buyer(s) ass the Earnest Money/Security Deposit (as the case may be) without prejudice to MSTC rights to take further action under the contract as well as recover such losses, damages or claim from the other money due becoming due under any other transaction with MSTC/Stock holder or from the buyer(s) directly. 14 GENERAL .................. .............. 14.6 The tenderer shall note the above general terms and conditions in addition to the special terms and conditions of tender which forms an integral part of the general terms and conditions of the tender in so far as the general terms and conditions of tender may be altered by the special terms and conditions of tender. 14.7 Intending tenderer (s) may obtain any clarification before tendering. Submission of tender implies that the tenderer(s) has obtained all the clarifications required and that he has agreed to all the general terms and conditions herein specified as well as Special Terms and Conditions of tender, if any. 14.7 Intending tenderer (s) may obtain any clarification before tendering. Submission of tender implies that the tenderer(s) has obtained all the clarifications required and that he has agreed to all the general terms and conditions herein specified as well as Special Terms and Conditions of tender, if any. 14.8 The decision to the Chairman-cum- Managing Director of MSTC Ltd. or his authorized nominee in any matter arising out of this sale shall be final in regard to all matters relating to contract. 14.9 All kinds of legal proceedings in any matter arising out of the contract shall be triable only by appropriate Civil Courts at New Delhi. DECLARATION BY THE TENDERER 1. I/We have fully understood the above General Terms and Conditions of tender as well as the Special Terms and Conditions attached with the tender which are returned herewith duly signed by me/us in token of having accepted the same in toto and I/we have made my/our offer keeping in the view these terms and conditions . 2. Total Earnest Money payable by me/us against all the lots quoted for me /us in Rs. 3. The aforesaid amount of Earnest Money is enclosed by me/us with this tender in the form of Pay Order/Demand Draft bearing No. Date of issuing bank payable at New Delhi in favour of MSTC Ltd. Signatures of Tenderer: Full name: Status: Name of tendering firm: Address of tendering firm: Telephone Nos. if any: Date: Name of our Babnker: Our Account No. is SPECIAL TERMS AND CONDITIONS OF THE TENDER ...................... ........................ 8. The materials are lying at various sites as per the details given in Annexure-A 9. (a) The materials offered for sale may be inspected at the above mentioned sites of the stock holder. All the materials are offered for sale on `As is where is basis. Quotation must be submitted for each individual lot. Since the sale is on `As is where is basis, no complaint whatsoever regarding conditions/deficiency of the material will be entertained at any sage. Tenders received with Earnest Money less than the requisite amount will be rejected summarily. ................... ................... 12. The contract shall be treated as having been concluded as soon the letter of acceptance is issued by MSTC to the successful tenderer. The period of contract shall be 45 days from the date of issue of acceptance letter by MSTC. Tenders received with Earnest Money less than the requisite amount will be rejected summarily. ................... ................... 12. The contract shall be treated as having been concluded as soon the letter of acceptance is issued by MSTC to the successful tenderer. The period of contract shall be 45 days from the date of issue of acceptance letter by MSTC. The contract shall be deemed to be completed as soon as the area is cleared by the buyer for tendered quantity or on completion of the period of contract as mentioned above whichever is earlier. 13. PAYMENT TOWARDS MATERIAL VALUE The schedule of payment will be as follows: (a) The 80% value of each lot and all taxes /duties as applicable have to be paid at a time alongwith the required security deposit( if any) within ten days from the date of issue of letter of acceptance (including the date of issue) by MSTC. (b) Security deposit, if any, as envisaged in the General Terms and Conditions of Tender is payable alongwith the full value of material including taxes/duties, as the case may be; (c) A formal delivery order shall be issued by MSTC only after receipt of the full ( 100%) payment including all taxes/duties etc. against each lot. 14. DELIVERY PERIOD The materials offered for sale on `As is where is basis. The successful tenderer shall remove each lot allotted to them by employing their labour and transport at their own cost from the area allotted to them within 30 ( thirty) days from the date of issue of sale-cum- Delivery order by MSTC or within such time as may be prescribed in the delivery order. The successful tenderer shall lift the material only from the lot/site/space as may be earmarked by the stock holder from time to time which should be final and binding on them and they shall observe the rule and regulations and working hours as may be fixed by the stock holder. The successful tenderer shall remove the lot only after fulfilling the terms and conditions of tender including payments and on issue of Delivery order by the competent authority. The successful tenderer shall remove the lot only after fulfilling the terms and conditions of tender including payments and on issue of Delivery order by the competent authority. AMENDED SPECIAL TERMS AND CONDITIONS EARNEST MONEY DEPOSIT(EMD) The tender should be accompanied by EMD @ 20% of the total net sale value or each lot quoted by way of Demand Draft/ pay order on any Nationalised Bank in favour of MSTC, New Delhi, payable at New Delhi. This supersede Clause -10 of the Special Terms and Conditions of the tender enclosed herewith. Upon acceptance of the offer of the tenderer the EMD as stated above shall be adjusted towards material value. However, in case of non submission of 80% of material value or due to non fulfillment of on of the contractual terms the EMD as stated above shall stand forfeited without any further reference to the purchaser. Moreover, this shall be without prejudice to Clause 12 of General Terms and Conditions of the tender." 8. It has been contended on behalf of the respondents that the contract of sale/transactions having been completed at Delhi and in terms of Condition No. 14.9, all legal proceedings arising out of the contract, shall be triable only by the appropriate civil court at Delhi, these petitions are liable to be dismissed for want of jurisdiction of this court. 9. As far question of jurisdiction is concerned, the High Court of Jammu and Kashmir has the jurisdiction to entertain a writ petition in terms of section 103 of the Constitution of Jammu and Kashmir read with Article 226 of the Constitution of India as applicable to the State of J&K. Section 103 of the Constitution of J&K and Article 226 of the Constitution of India are quoted hereunder: "Section 103. Power to issue certain writs: The High Court shall have power to issue to any person or authority, including in appropriate cases any Government within the State, directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, qua warranto and certiorari, or any of them, for any purpose other than those mentioned in clause (2A) of Article 32 of the Constitution of India." Article 226. Power of High Courts to issue certain writs (1) Notwithstanding anything in Article 32, every High Court shall have the powers, throughout the territories in relation to which it exercises jurisdiction, to issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose. (2) The power conferred by clause(1) to issue direction, orders or writs to any Government, authority or person may also be exercised by any High Court exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories. (3) .................. (4) ................." 10. Under the aforesaid constitutional provision, a court within whose territorial jurisdiction cause of action wholly or in part arises, shall have the jurisdiction to entertain a petition under Article 226 of the Constitution of India. The question arises whether any cause of action has accrued within the territorial jurisdiction of Jammu and Kashmir State in respect to transaction as to sale of stocks admittedly lying within the territory of J&K State. It may be useful to notice certain provisions of the Sales of Goods Act, which reads as under: Section-4. Sale and agreement to sell: 1. A contract of sale of goods is a contract where the sellers transfers or agrees to transfer the property in goods to the buyer for a price. There may be a contract of sale between one part-owner and another. 2. A contract of sale may be absolute or conditional 3. Where under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell. 4. An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred. Section -5. 4. An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred. Section -5. Contract of sale how made: 1. A contract of sale is made by an offer to by or sell goods for the price and the acceptance of such offer. The contract may provide for the immediate delivery of the goods or immediate payment of the price or both, or for the delivery or payment by instalments, or that the delivery or payment or both shall be postponed. Subject to the provisions of any law for the time being in force, a contract of sale may be made in writing or by word of mouth, or partly in writing and partly by word of mouth or may be implied from the conduct of the parties. Section 32. Payment and delivery are concurrent conditions: Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions, that is to say, the seller shall be ready and willing to give possession of the goods to the buyer in exchange for the price, and the buyer shall be ready and willing to pay the price in exchange for possession of goods. Section 33. Delivery: Delivery of goods sold may be made by doing anything which the parties agree shall be treated as delivery or which has the effect of putting the goods in the possession of the buyer or of any person authorized to hold them on his behalf. Section 36 : Rules as to delivery : (1) Whether it is for the buyer to take possession of the goods or for the seller to send them to the buyer is a question depending in each case on the contract, express or implied, between the parties. Apart from any such contract, goods sold are to be delivered at the place at which they are at the time of the sale, and goods agreed to be sold are to be delivered at the place at which they are at the time of agreement to sell, or, if not then in existence, at the place they are manufactured or produced. (2) Whether under the contract of sale the seller is bound to send the goods to the buyer, but no time for sending them is fixed, the seller, is bound to send them within a reasonable time. (3) Whether the goods at the time of sale are in possession of a third person, there is no delivery by seller to buyer unless and until such third person acknowledges to the buyer that he holds the goods on his behalf. Provided that nothing in this section shall affect the operation of the issue or transfer of any document of title. (4) Demand or tender of delivery may be treated as ineffectual unless made at reasonable hour. What is a reasonable hour is a question of fact. (5) Unless otherwise agreed, the expenses of an incidental to putting the goods into deliverable state shall be borne by the seller." 11. The transaction in respect to sale i.e. inviting offers, acceptance of offer and issuance of sale order including payment of consideration, all these components of contract were settled at Delhi and there is no dispute on this count amongst the parties. There is also no dispute that the stocks lying in the State of J&K were/ are required to be lifted by the petitioners consequent upon the contract of sale settled at Delhi. Whether lifting of goods forms an integral part of cause of action or is a mere incident of transaction of sale as argued by the learned counsel for the respondents, needs to be examined. In case of sale of goods, the entire transaction i.e. inviting offers, making offers, acceptance and receipt of consideration, all constitutes integral part of cause of action. However, offer, acceptance and consideration, all relate to the goods which is corpus and lifting of goods lying in the State of J&K, cannot be segregated from the total cause of action of the transaction of sale. From the reading of Section 4 of Sales of Goods Act, it transpires that transfer of the property in goods to the buyer for a price is an important component of sale. Similarly, Section-5, which prescribes the mode of making a contract of sale, delivery of goods and the payment of price is again to be considered an integral part of sale of goods. Similarly, Section-5, which prescribes the mode of making a contract of sale, delivery of goods and the payment of price is again to be considered an integral part of sale of goods. Section 32 prescribes that it is obligation of the seller to give possession of the goods to the buyer in exchange for the price. Section 33 further laid down the method of effecting delivery of the goods and in terms of section 35, the buyer is required to apply for delivery . While dealing with the rules as to delivery, section 36 clearly indicate that there cannot be any delivery of goods, unless third person who is in possession of the goods acknowledges to the buyer that he holds the goods on his behalf. Thus, conjoint reading of the above referred provisions establish that the delivery of goods for a price is one of the most essential components of the contract of sale. Therefore, it cannot be said that the lifting of goods from the State of J&K is only in incident of the concluded transaction of sale. As a matter of fact, it does constitute an integral part of contract of sale and consequently an essential component of cause of action . Respondents have placed reliance upon case Oil and Natural Gas Commission v. Utpal Kumar Basu and Others reported in (1994) 4 Supreme Court Cases 711. In this case, tenders were invited at Delhi. The same were required to be received at Delhi and final decision on the bids was to be scrutinized and decided at Delhi. The rejection of the bid of the writ petitioner was however communicated to him at Calcutta. Bid was in respect to some work to be executed in some other State. Considering the fact that the entire transaction came to be settled at Delhi and even the rejection took place at Delhi, it was held by the Apex Court that its communication to the writ petitioner at Calcutta, does not constitute an integral part of the cause of action, the apex court held as under : "It is well settled that the expression " cause of action" means that bundle of facts which the petitioner must prove, if traversed, to entitle him to a judgment in his favour by the court. ................. ................. Therefore, in determining the objection of lack of territorial jurisdiction the court must take all the facts pleaded in support of the cause of action into consideration albeit without embarking upon an enquiry as to the correctness or otherwise of the said facts, . In other words, the question whether a High Court has territorial jurisdiction to entertain a writ petition must be answered on the basis of the averments made in the petition, the truth or otherwise whereof being immaterial . To put it differently, the question of territorial jurisdiction must be decided on the facts pleaded in the petition...." 12. The facts of the present case, however, are different. In the present case, the goods, subject matter of transaction of sale, were admittedly lying in the State of J&K at the time of transaction of sale, was settled at Delhi and the delivery of goods was to be made in the State of J&K to the petitioners . Therefore, delivery of goods being an integral part of the cause of action occasioned in the State of J&K. In Navinchandra N. Majithia v. State of Maharashtra and Others reported in 2000( 7) SCC 640, the Apex Court while dealing with the various components of cause of action, held as under: "From the provision in clause (2) of Article 226 it is clear that the maintainability or otherwise of the writ petition in the High Court depends on whether the cause of action for filing the same arose, wholly or in part, within the territorial jurisdiction of that Court. In legal parlance the expression " cause of action" is generally understood to mean a situation or state of facts that entitles a party to maintain an action in a court or a tribunal ; a group of operative facts giving rise to one or more bases for suing; a factual situation that entitles one person to obtain a remedy in court from another person." 13. Ratio of this judgment is fully applicable to the facts of this case and applying the law laid down, cause of action in part has arisen in the State of J&K giving jurisdiction to this Court to entertain these petitions. 14. Mr. Ratio of this judgment is fully applicable to the facts of this case and applying the law laid down, cause of action in part has arisen in the State of J&K giving jurisdiction to this Court to entertain these petitions. 14. Mr. V.K. Shali, learned counsel appearing for respondents has also referred to Clause -12 of the Special Terms and Conditions of the contract, which inter alia provide reference of all questions arising out of contract to the arbitrator and it is accordingly stated that the issue involved being referable to arbitration in view of the wide amplitude of the arbitration clause, writ petition is not maintainable, that too after the contract stands concluded. It is vehemently argued on behalf of the respondents that since there is efficacious alternative remedy, discretionary jurisdiction to be exercised by the writ court, should not be exercised in such a case. No doubt, the contract between the parties do contain an arbitration clause and the issue arbitral there under. However, the question raised in the writ petitions relate to the liability to pay tax, which is statutory liability. In view of the specific constitutional provision contained under Article 265 of the Constitution of India and Section 114 of the Constitution of J&K, there is constitutional prohibition from levying and recovering the tax without the authority of law. Therefore, what needs to be examined, is not enforceability and interpretation of mere contractual obligations, but also statutory liability of the petitioners to pay tax in the manner demanded under the contract. Therefore, what needs to be examined, is not enforceability and interpretation of mere contractual obligations, but also statutory liability of the petitioners to pay tax in the manner demanded under the contract. The Apex Court in Verigamto Naveen v. Government of A.P. and Others reported in (2001) 8 Supreme Court Cases 344 held as under: "On the question that the relief as sought for and granted by the High Court arises purely in the contractual field and, therefore, the High Court ought not to have exercised its power under Article 226 of the Constitution placed very heavy reliance on the decision of the Andhra Pradesh High Court in Y.S. Raja Reddy v. A.P. Mining Corporation Limited (1988) 2 An LT 722) and the decisions of this High Court in Har Shankar v. Deputy Excise and Taxation Commissioner (1975) 1 SCC 737), Radhakrishna Agarwal v. State of Bihar, (1977) 3 SCC 457, AIR 1977 SC 1496), Ramlal and Sons v. State of Rajasthan (1976) 1 SCC 112, AIR 1976 SC 54, Shiv Shankar Dal Mills v. State of Haryana (1980 2 SCC 437, AIR 1980 SC 1037, Ramana Dayaram Shetty v. International Airport Authority of India (1979 3 SCC 489, AIR 1979 SC 1628 and Basheshar Nath v. CIT (AIR 1959 SC 149). Though there is one set of cases rendered by this Court of the type arising in Radhakrishna Agarwal case much water has flown in the stream of judicial review in contractual field. In cases where the decision making authority exceeded its statutory power or committed breach of rules or principles of natural justice in exercise of such powers or its decision is perverse or passed an irrational order, this court has interceded even after the contract was entered into between the parties and the Government and its agencies. We may advert to three decisions of this Court in Dwarkadas Marfatia and Sons v. Board of Trustees of the Port of Bombay (1989) 3 SCC 293, Mahabir Auto Stores v. Indian Oil Corpn. (1990) 3 SCC 752 and Shrilekha Vidyarthi (Kumari) v. State of U.P. (1991) 1 SCC 212: 1991 SCC (L&S) 742: AIR 1991 SC 537 . We may advert to three decisions of this Court in Dwarkadas Marfatia and Sons v. Board of Trustees of the Port of Bombay (1989) 3 SCC 293, Mahabir Auto Stores v. Indian Oil Corpn. (1990) 3 SCC 752 and Shrilekha Vidyarthi (Kumari) v. State of U.P. (1991) 1 SCC 212: 1991 SCC (L&S) 742: AIR 1991 SC 537 . Where the breach of contract involves breach of statutory obligation when the order complained of was made in exercise of statutory power by a statutory authority, though cause of action arises out of or pertains to contract, brings it within the sphere of public law because the power exercised is apart from contract. The freedom of the Government to enter into business with anybody it likes the subject to the condition of reasonableness and fair play as well as public interest . After entering into contract, in canceling the contract which is subject of terms of the statutory provisions, as in the present case, it can not be said that the matter falls purely in a contractual field. Therefore, we do not think it would be appropriate to suggest that the case on hand is a matter arising purely out of a contract and, therefore, interference under Article 226 of the Constitution is not called for. This contention also stands rejected." 15. The Apex Court in another case titled Modern Steel Industries v. State of U.P. and Others reported in ( 2001) 10 Supreme Court Cases 491, while considering the question of exercise of writ jurisdiction under Article 226 of the Constitution, held as under: "We have heard the learned counsel for the parties finally with their consent. The short question is whether the revenue recovery certificate issued by the Ist respondent on behalf of the State of U.P. for recovering the minimum guarantee charges as sought to be recovered by the respondent Electricity Board from the appellant Industry could be legally sustained or not. The said recovery was challenged by the appellant in the writ petition on two grounds: (i) that under the relevant regulations when the connected additional load was reduced the minimum guarantee charges could not have been levied as if the appellant was a new consumer and alternatively, it was submitted that if Regulation 17(ii) is pressed into service for sustaining the recovery, the said regulation was ultra vires Article 14 of the Constitution. The High Court in the impugned judgment without addressing itself to these vital questions has observed that the appellant may seek the remedy by way of arbitration before a person nominated by the Chairman of the Electricity Board. In our view, the main contentions canvassed by the learned counsel for the appellant before the High Court were required to be examined by the High Court and there was no question of asking the appellant to go for arbitration, especially when the question of vires of Regulation 17(ii) was on the anvil for scrutiny. Only on this short ground and without expressing any opinion on the merits of the controversy this appeal is allowed. The impugned judgment and order passed by the High Court are set aside and Writ Petition No. 24281/ of 1998 is restored to the file of the High Court with a request that the Division Bench may be seized of this matter may make it convenient to dispose of it at the earliest after hearing the parties." 16. As said above, the issue in the present cases involve the statutory liability to pay tax under law and therefore, the alternative remedy of arbitration even if include within its ambit, the issue involved cannot form a valid ground to prevent the writ court from exercising its discretionary jurisdiction under Article 226 of the Constitution of India. I, therefore, hold that the arbitration clause in the contract is not an absolute bar and considering the issue involved, the remedy of writ cannot be denied to the petitioners. 17. Mr. Shali, learned counsel for respondents has raised another issue regarding the interference by the writ court in the contractual matters. It is strenuously argued that the issue relate to enforcement of the contractual obligations arrived at between the parties through the medium of written contract and the efficacy of the conditions of contract cannot be gone into by the writ court particularly when the petitioner being one of the contracting party entered into the contract with open eyes consenting to its terms and conditions . The petitioners are thus estopped from filing writ petitions to challenge any condition of the contract or plead non-applicability of any of its terms. Reliance is placed upon Directorate of Education and Others v. Educomp Datamatics Ltd. and Others reported in 2004(4) SCC 19. The petitioners are thus estopped from filing writ petitions to challenge any condition of the contract or plead non-applicability of any of its terms. Reliance is placed upon Directorate of Education and Others v. Educomp Datamatics Ltd. and Others reported in 2004(4) SCC 19. In this case, the Apex Court while noticing the principle of law for interference in contractual matters in case Tata Cellular v. Union of India reported in 1994(6) SCC 651, held as under: "It is well settled now that the courts can scrutinize the award of the contracts by the government or its agencies I exercise of its powers of judicial review to prevent arbitrariness of favouritism . However, there are inherent limitations in the exercise of the powers of judicial review in such matters . The point as to the extent of judicial review permissible in contractual matters while inviting t bids by issuing tenders has been examined in depth by this Court in Tata Cellular v. Union of India. After examining the entire case law the following principles have been deduced. "94. The principles deducible from the above are: 1. The modern trend points to judicial restraint in administrative action. 2. The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. 3. The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted, it will be substituting its own decision, without the necessary expertise which itself may be fallible. 4. The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. 5. The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness(including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. 6. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness(including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. 6. Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure." (Emphasis supplied) 18. The Apex Court in another case titled M/s. Jai Durga Finvest Pvt. Ltd. v. State of Haryana and others reported in AIR 2004 SC 1484 held as under: "It is not in dispute that the grant of mining lease in favour of the appellant herein for the extraction of mineral sand by the respondents is governed by the provisions of Punjab Mineral Concession Rules, 1964. In terms of Rule 33 the bidder is required to execute a deed in Form-L. Clause-27 of the agreement in Form-L, obligates the respondent to comply with the request made in terms thereof. The Appellate Authority had not considered this aspect of the matter. The High Court also did not apply its mind in this behalf. The first question that arises whether the respondents complied with their statutory obligations when the request was made by the appellant. If not, the second question would be the effect of non-compliance of the statutory obligation of the respondents which formed part of the contract insofar as they did not comply with the appellants request as aforementioned which had a direct bearing to the right of the appellant to raise sand. As the High Court, as noticed hereinabove, has merely proceeded on the basis that the appellant had entered into the contract with his eyes wide open, but, the same would not, in our opinion, mean that they were bound to pay the contract amount forfeited, as also pay interest at the rate of 24 per cent, although it could not, by reason of acts of omission and commission on the part of the respondents, carry out the mining operation as er the terms of the agreement." 19. The ratio of the aforesaid judgments is clearly applicable to the facts of these cases. The question is not merely of performance and non- performance of contractual obligations effecting the civil/contractual rights of the parties. The ratio of the aforesaid judgments is clearly applicable to the facts of these cases. The question is not merely of performance and non- performance of contractual obligations effecting the civil/contractual rights of the parties. The issue being liability to pay tax, which is statutory exaction and not the breach of the contract alone, therefore, the writ court cannot shut its eyes and refuse to interfere only on the ground that the question raised is one of enforcement of contractual obligation particularly when the enforcement of contractual obligation involve rights and liabilities of the parties under statutory provisions. The writ court under such circumstances, cannot deny a the party of its right to have the issue decided by a writ court . The writ petitions are thus maintainable under the present set of circumstances. 20. Now coming to the principal question for which the parties have addressed lengthy and detailed arguments. Whether the sale in question is inter- State sale attracting the provision of the Central Sales Tax Act for the purpose of determining the tax liability or the sale is pure and simple a local sale and the provisions of Local Sales Tax Act i.e. General Sales Tax Act 1962 as applicable to the State of J&K will apply to determine the tax liability. 21. I have noticed certain conditions of the contract. Under Clause -3 of the Important Terms and Conditions, it is specifically mentioned that local sale tax will be charged. Based upon the stipulation i.e note appended to Special Terms and Conditions, Condition 9.2 of the General Terms and Conditions of contract which empowers the buyer to remove the goods out side the State, has been excluded from the contract. In addition to this, Clause-5 of the contract deals with the delivery of the goods. Relevant extract from the said clause is quoted hereunder : " DELIVERY (a) ....................... b) The goods sold will be removed by the buyer from the site of accumulation within the period specified in the Sale Release Order. However, such period will not be more than 30 days from the date of paid MRO. Deliveries will be made only during working hours on all working days on presentation by the purchasers to the stockholder to copy of Sale Release Order with his copy of Sale Release Order . However, such period will not be more than 30 days from the date of paid MRO. Deliveries will be made only during working hours on all working days on presentation by the purchasers to the stockholder to copy of Sale Release Order with his copy of Sale Release Order . The purchaser will make his own arrangements for transport and he will not be entitled to claim and facilities or assistance for transport from MSTC/ Stockholder of his representative of the stockholder. Should the original buyer wish to take delivery of the stores purchased through a representative, he must be presented to the officer in whose charge the stores are held alongwith an authorization letter from MSTC/Identity Card holder . Such officer any in his entire discretion declare to act on any such authority and it shall, in all cases for the buyer to satisfy such officer that the authority and it shall, in all cases for the buyer to satisfy such officer that the authority is genuine. Delivery by proxy will be at the purchasers sole responsibility and no claim shall be against Government of any account whatsoever, if delivery is effected to wrong person reporting to give his authority." 22. Based upon the aforesaid contractual provision, it is stated that the sale being only a local sale, the petitioners are liable to pay local sales tax as applicable in the State of J&K. Learned counsel appearing for the respondents also referred to the definition of sale as provided under the J&K General Sales Tax Act, 1962. Explanation 2(a) of the General Sales Tax Act is reproduced as under:- "Explanation 2(a) The sale of goods shall be deemed, for the purposes of this Act, to have taken place in the State, wherever the contract of sale might have been made, if the goods are within the State; (I) in case of specific or ascertained goods, at the time the contract of sale is made; and (II) in the case of unascertained or future goods, at the time of their appropriation to the contract of sale by the seller, whether the assent of other party is prior or subsequent to such appropriation." 23. In view of the explanation to the definition of sale as contained in the aforesaid Act, if the goods are within the State, it shall be deemed to be a sale within the State of J&K irrespective of the contract of sale being made in any other State. It has been urged on behalf of the respondents that the definition of sale under the Local Act and the clear stipulation in the contract making it local sale, tax to be paid is under the Local Sales Tax Act. It is stated that the petitioners are not entitled to the benefit of concessional rate of tax as provided under section 3 of the Central Sales Tax Act, which is applicable only on inter -state sales. Mr. Shali learned counsel for the respondents has further stated that there is no stipulation in the contract of sale allowing the petitioners to transport the goods from the State of J&K to another State and therefore, if the goods have been removed by the petitioners on their own without the concurrence of the seller, it cannot be termed as inter-state sale and the provisions of the Central Sales Tax Act are not applicable. The question as to what are essential components to constitute a sale as an inter- State sale and the powers of the State Legislature as also the Parliament to make laws with respect to the levy of tax on sale came up before a constitution bench of the Apex Court in State of Andhra Pradesh v. National Thermal Power Corpn. Ltd. and Others, (2202) 5 SCC 203. The Constitution Bench on examination of the relevant constitutional provisions dealing with the powers of the Parliament and the State Legislature to enact law on the subject and various judgments of the Apex Court on the issue, laid down the principles to determine as to when the sale will be termed as inter- State sale attracting provisions of the Central Sales Tax Act for the purpose of tax on sale of goods. The Apex Court on consideration of the entire gamut of the issue held as under: "It is well settled by a catena of decisions of this Court that a sale in the coursed of inter- State trade has three essential ingredients: (i) there must be contract of sale, incorporating a stipulation, express or implied, regarding inter- State movement of goods; ( ii) the goods must actually move from one State to another, pursuant to such contract of sale, the sale being the proximate cause of movement; and (iii ) such movement of goods must be from one State to another State where the sale concludes. It follows as a necessary corollary of these principles that a movement of goods which takes place independently of a contract of sale would fall within the meaning of inter- State sale. In other words, if there is no contract of sale preceding the movement of goods , obviously the movement cannot be attributed to the contract of sale. Similarly, if the transaction of sale stands completed within the State and the movement of goods takes place thereafter, it would obviously be independently of the contract of sale and necessarily by or on behalf of the purchaser alone and, therefore, the transaction would not be having an inter- State element. Precedents are legion ; we may briefly refer to some of them. In English Electric Co. of India Limited v. CTO (1976) 4 SCC 460 this 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 sale and it does not matter which is the State in which the property passes. What is decisive is whether the sale is one which occasions the movement of the goods from one State to another . In Union of India v. K.G. Khosla and Co. Ltd. (1979 2 SCC 242 it was observed that a sale would be an inter- State sale even if the contract of sale does not itself provide for the 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 the contract. Similar view was expressed in Sahney Steel and Press Works Limited v. CTO, ( 1985) 4 SCC 173. Similar view was expressed in Sahney Steel and Press Works Limited v. CTO, ( 1985) 4 SCC 173. In Manganese Ore ( India ) Ltd. v. Regional Asstt. CST (1976) 4 SCC 124 after referring to Balabhagas Hulaschand v. State of Orissa (1976) 2 SCC 44 it was observed that so far as Section 3 (a) of the CST Act is concerned, there is no distinction between unascertained or future goods which are already in existence, if at the time when the sale takes place these goods come into actual existence." 24. To same effect in another Judgment of the Apex Court in case titled The State of Tamil Nadu v. The Cement Distributors (P) Limited and others reported in 1975(4) SCC 30, in which the Apex Court held as under: "Section 3 of the Central Sales Tax Act provides that a sale or purchase of goods shall be deemed to take place in the course of inter -state trade or commerce if the sale of purchase(a) occasion the movement of goods from one State to another or(b) is effected by a transfer of documents of titled of the goods during their movement from one State to another. The settled view of this Court is that if the movement of goods from one State to another is the result of a covenant or an incident of the contract of sale then the sale is an inter- State sale." 25. Mr. Subash Dutt, learned counsel appearing for petitioners, however, while controverting the contention of the learned counsel for the respondents, has vehemently argued that the provision of Section -2 particularly Explanation -- 2(a) of the General Sales Tax Act, which is sought to be invoked itself is contrary to the definition of inter- state sale as provided under section 3 of the Central Sales Tax Act and therefore, cannot be put to aid to deprive the petitioners the benefit of concessional rate of tax available under Central Sales Tax Act. He has further stated that the State Legislature has no jurisdiction to lay down the definition of inter-state sale, which is within the exclusive jurisdiction of the parliament of India under Entry No. 92-A which falls in the List- 1 i.e. of Union List and the State Legislature cannot enact a law to make provision for inter-state sale or change its definition . He has further submitted that even if there is conflict between a law enacted by the Parliament and the one by the State Legislature, it is the law which is made by the parliament, that will operate. Reference is made to case Chaman Lal and Ors. v. State of J&K reported in 1987 KLJ 609. He has further submitted that by legal fiction, neither the definition of inter-state sale can be changed nor situs of the sale changed According to Mr. Dutt, learned counsel for the petitioners, if any provision of law contravenes the law made by the Parliament which has otherwise supremacy over the field, such a provision is to be "read down" . He has referred to 119 STC 2000 SC 182, wherein it has been held that: "While examining the power of the State Legislature under entry 54 of the List -II in earlier part of this judgment, we have noticed that the situs of the sale or purchase is wholly material as regards the inter- State trade or commerce, as held in Bengal Immunity Co. Ltd.s case ( 1955) 6 STC 446(SC); ( 1955) 2 SCR 603. Further, the State Legislature cannot by law treat sales outside the State and sales in the course of import as " sales within the State" by fixing the situs of sales within its State in the definition of sale, as it is within the exclusive domain of the appropriate Legislature, i.e., Parliament, to fix the location of sale by creating legal fiction or otherwise. It may be noted that the transactions contemplated under sub- clause ( a) to (f) of clause ( 29A) of Article 366 are not actual sales within the meaning of " sale" but are deemed sales by legal fiction created therein . The situs of sale can only be fixed either by the appropriate Legislature or by judge made law, and there is no settled principles for determining the situs of sale. There are conflicting views on this question. One of the principles providing situs of sale was engrafted in Explanation to clause (1)a of Article 286, as it existed prior to the Constitution ( Sixth Amendment ) Act, which provided that the situs of sale would be where the goods are delivered for consumption . The second view is situs of sale would be the place where the contract is concluded. The second view is situs of sale would be the place where the contract is concluded. The third view is that the place where the goods are delivered would be the situs of sale. The fourth view is, that where the essential ingredients, which complete a sale, are found in majority would be the situs of sale. There would be no difficulty in finding out situs of sale where it has been provided by legal fiction by the appropriate Legislature . In the present case, we do no find Parliament has, by creating any fiction, fixed the location of sale in case of the transfer of right to use goods. We, therefore, have to lok into the decisional law. Maharashtra Act: In earlier part of this judgment, we have already reproduced the Explanation to section 2(10) of the Act. The said Explanation fixes the situs of deemed sale in respect to the transfer of right to use any goods . These said Explanation deems the transfer of right to use any goods to have occurred in the State of Maharashtra if the goods are located within the State at the time of their use, irrespective of the place where agreement of such transfer of right is made and therefore it widens the scope of the definition of " sale" so as to include deemed sales (i) which are in the course of inter- State trade and commerce and (ii) sales outside the State of Maharashtra and (iii) sales which occasioned import of goods into India . Section 3 of the Maharashtra Act provides incidence of tax. It lays down that subject to the provisions contained in the Act and Rules, tax shall be leviable on the turnover of sales and therefore turnover necessarily has to include outside sale and sale in the course of inter- State trade and commerce and sales which occasioned import of goods . Although Section 8-A of the Act ( as referred to in written notes), provides that nothing in this Act would be deemed to impose or authorize imposition of any tax on a sale outside the State or in the course of the import or export or inter- State trade or commerce but the Explanation has not been amended accordingly. Although Section 8-A of the Act ( as referred to in written notes), provides that nothing in this Act would be deemed to impose or authorize imposition of any tax on a sale outside the State or in the course of the import or export or inter- State trade or commerce but the Explanation has not been amended accordingly. There is a provision for exemption of turnover related to goods in respect of which tax has already been paid under the Bombay Sales Tax Act, 1959 but there is no provision that such exemption would be available in case of goods which have suffered sales tax under the other Sales Tax Laws. We therefore, of the view that since the explanation has not been amended in conformity with Section 8-A of the Act, the Explanation to section 2(10) of the Maharashtra Act transgresses the limits of legislative power conferred on the State Legislature under entry 54 of List II and we, thus, instead of striking it down, direct that the Explanation to section 2(10) of the Act shall be read down to this effect that it would not be applicable to the transactions of transfer of right to use any goods if such deemed sale is (i) an outside sale, ( ii) sale in the course of the import of the goods into or export of the goods out of the territory of India and (iii) an inter- State sale. Tamil Nadu: The Tamil Nadu General Sales Tax Act, 1959, also levies tax on transfer of right to use any goods . Section 2(n) defines "sale" as under: "Sale" with all its grammatical variations and cognate expressions means every transfer of the property in goods ( other than by way of a mortgage, hypothecation, charge or pledge) by one person to another in the course of business for cash, deferred payment or other valuable consideration and includes.... Section 2(n) defines "sale" as under: "Sale" with all its grammatical variations and cognate expressions means every transfer of the property in goods ( other than by way of a mortgage, hypothecation, charge or pledge) by one person to another in the course of business for cash, deferred payment or other valuable consideration and includes.... (iv) a transfer of the right to use any goods for any purpose ( whether or not for a specified period) for cash, deferred payment or other valuable consideration." The above definition has Explanations and the relevant Explanation 3 is extracted below: "Explanation 3 ( a) The sale or purchase of goods shall be deemed, for the purposes of this Act, to have taken place in the State, wherever the contract of sale or purchase might have been made, if the goods are within the State." Explanation 3(a) to section 2(n) of the Act deems sale to have occurred in the State of Tamil Nadu if the goods are located within the State. Although the explanation is general in character, the petitioners contended that the said Explanation is being applied in the case of transfer of right to use any goods which have taken place outside the State or an inter-State sale. During the course of argument, learned counsel appearing for the State of Tamil Nadu contended that the said Explanation is applicable in cases where the transfer of right to use goods takes place outside the State, and the State is empowered to levy on such transaction of deemed sale, if the goods are located within the State . Further, in section 3A, the rates of tax has not been specially prescribed . Following what we have stated earlier, we hold that the Explanation 3(a) to section 2(n) of the Act is in excess of power under entry 54 of List II of the Seventh Schedule so far as it relates to the transactions of transfer of right to use any goods are concerned. Following what we have stated earlier, we hold that the Explanation 3(a) to section 2(n) of the Act is in excess of power under entry 54 of List II of the Seventh Schedule so far as it relates to the transactions of transfer of right to use any goods are concerned. Since the said Explanation is in the general provisions of the Act, we direct that Explanation 3(a) to section 2(n) of the Act shall be read down to this effect that it would not be applicable to the transactions of transfer of right to use any goods if such transaction of deemed sale is ( I) an outside sale; (ii) the sale which occasioned the import of goods into India; and (iii) an inter- State sale. Rajasthan: The Rajasthan Sales Tax Act, levies tax on transfer of a right to use any goods . Section 2(23) defines " lease" which is being reproduced below: "lease means any agreement or arrangement whereby the right to use any goods for any purpose is transferred by one person to another whether or not for a specified period for cash, deferred payment or other valuable consideration without the transfer of ownership, and includes a sub- lease but does not include any transfer on hire- purchase or any system of payment by instalments." 26. While referring to the provision of Section 3 of the Central Sales Tax Act and the powers of the State Legislature, it is stated that the J&K State Legislature has similar powers to impose the tax on sales as are available to the Legislatures of other States in India. He has relied upon judgment in case titled Khazan Chand etc. v. State of J&K and Others reported in AIR 1984 SC 762 wherein it has been held as under: "Thus, under the constitutional provisions applicable to the State of Jammu and Kashmir, the power of the State Legislature to enact a law relating to taxes on inter-State sale or purchase of goods is the same as that of the Legislatures of other States in India. By sub clause (7) of Clause 2 of the said order, Article 265 is made applicable to the State of Jammu and Kashmir . By sub clause (7) of Clause 2 of the said order, Article 265 is made applicable to the State of Jammu and Kashmir . Further Section 114 of the Constitution of Jammu and Kashmir is in terms identical with Article 265 of the Constitution of India and equally provides that " No tax shall be levied or collected except by authority of law." 27. It has also been argued on behalf of the petitioners that to determine whether the sale or purchase is an inter- state sale, only the movement of goods from one State to another by transfer of documents of title is required . It is immaterial whether the movement of goods has occasioned pursuant to any specific terms in the contract or otherwise. In English Electric Company of India Ltd. v. The Deputy Commercial Tax Officer and others reported in AIR 1977 SC 19, the Apex Court held as under: " ... When the movement of goods from one State to another is an incident of the contract it is a sale in the course of inter-State sale. 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, 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 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 will enough if the movement is in pursuance of and incidental to the contract of sale." 28. In Commercial of Sales Tax, U.P. and Others v. M/S Bakhtawar Lal Kailash Chand Areti and others reported in AIR 1992 SC 1952, the Apex Court held as under: "To be called an inter- State sale or purchase, it is not necessary that the contract of sale must expressly provide for and /or stipulate the movement of goods from one State to the other, it is enough if such movement of goods is implicit in the contract of sale. If, however, the movement of goods is neither expressly provided for in the contract nor is it implicit in it, the movement of goods from one State to another,-- even if one takes place -- cannot be related to the sale / purchase . In such a case the movement of goods would be unconnected with and independent of the sale/purchase . It would not fall under S. 3( a) . To fall thereunder, the sale and the movement of the goods must be parts of the same transaction." 29. In Union of India and another v. M/S K.G. Khosla and Co. Ltd. and others reported in AIR 1979 SC 1160, the Apex Court held as under: "In order that the sale may be regarded as an inter- State sale, it is immaterial whether the property in the goods passes in one State or another. The question as regards the nature of the sale, that is, whether it is an inter- State sale or an intra- State sale, does not depend upon the circumstances as to in which State the property in the goods passes. It may pass in either State and yet the sale can be an inter- State sale." 30. In 20th Century Finance Corpn. Ltd. and another v. State of Maharashtra reported in AIR 2000 SC 2436, the Constitution Bench while dealing with the question of inter State Trade and Commerce, held as under: "Following the decisions referred to above, we are of the view that the power of States legislatures to enact law to levy tax on the transfer of right to use any goods under Entry 54 of List II of Seventh Schedule has two limitations -- one arising out of the Entry itself; which is subject to Entry 92- A of List I, and the other flowing from the restrictions embodied in Article 286. By virtue of Entry 92-A of List I, Parliament has power to legislate in regard to taxes on sales or purchase of goods other than newspapers where such sale or purchase takes place in the course of inter- State trade or commerce. Article 269 provides for levy and collection of such taxes. Because of these restrictions, States legislatures are not competent to enact law imposing tax on the transactions of transfer of right to use any goods which take place in the course of inter- State trade or commerce. Article 269 provides for levy and collection of such taxes. Because of these restrictions, States legislatures are not competent to enact law imposing tax on the transactions of transfer of right to use any goods which take place in the course of inter- State trade or commerce. Further, by virtue of Clause (1) of Article 286, the State legislature is precluded to make law imposing tax on the transactions of transfer of right to use any goods where such deemed sales takes place (a) outside the State and (b) in the course of import of goods into the territory of India. Yet, there are other limitations on the taxing power of the State legislature by virtue of clause (3) of Article 286. Although Parliament has enacted law under clause (3) (a) of Article 286 but no law so far has been enacted by Parliament under clause 3 (b) of Article 286. When such law is enacted by Parliament, the State legislature would be required to exercise its legislative power in conformity with such law. Thus, what we have stated above, are the limitations on the powers of the State legislatures on levy of sales tax on deemed sales envisaged under sub- clause ( d) of clause ( 29-A) of Article 366 of the Constitution." 31. Mr. Dutt has further submitted that as far the transaction of sale is concerned, it has nothing to do with the situs of the sale. What is relevant, is the sale which occasioned movement of goods from one State to another notwithstanding the property in the goods passes in one State or the other. Reference is made to case Oil India Limited v. The Superintendent of Taxes and Others reported in 35 STCs wherein the Apex Court held as under: ".... No matter in which State the property in the goods passes, a sale which occasions " movement of goods from one State to another is a sale in the course of inter- State trade." 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 the sale may be deemed to have occasioned such movement . It is not necessary that the sale must precede the inter- State movement in order 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." 32. Reference is also made to case Onkar Lal Nand Lal v. The State of Rajasthan and another reported in 60 STCs 314 wherein the Apex Court held as under: "Even an inter- State sale must have a situs and the situs may be in one State or another. It does not involve any contradiction in saying that an inter- State sale or purchase is inside a State or outside it. The situs of the sale may fall for consideration from more than one point of view. It may require to be considered for the purpose of determining its exigibility to tax as also for other purposes . A sale which is in the course of inter- State trade or commerce cannot be taxed by a State Legislature even if its situs is within the State, because the State Legislature has no legislative competence to impose tax on a sale in the course of inter- State trade or commerce. That can be done only by Parliament . Therefore, if a question arises whether a sale is exigible to tax by the State Legislature, it may have to be considered whether it is a sale in the course of inter- State trade or commerce. The same sale in another context may have to be examined from a different point of view for determining where its situs lies and whether it is a sale inside a State or outside the State. Therefore, there is no incompatibility in the same sale being both a sale in the course of inter- State trade or commerce within the meaning of Section 3 of the Central Sales Tax Act, 1956 as also a sale inside the State in accordance with the principles laid down in sub -- section ( 2) of section 4 of the Central Act." 33. It is contended that the transaction of sale was made at Delhi and it will not make the contract of sale in the State of J&K merely because the goods were lying in the State of J&K and by fiction of law as contained in Explanation 2(a) of the General Sales Tax Act, inter- state sale cannot be converted into a local sale. Therefore, the provision is to be read down and declared to be inapplicable. He has also referred to Article 286 (1) of the Constitution of India to contend that it is the Parliament alone which is competent to enact law relating to inter- State sale and provide for tax on such sale and it is the law made by the Parliament which operates and not the law made by the State Legislature. Reference is made to Modern Automobiles (i) v. Union of India and others reported in 56 STC Delhi 85 wherein the Apex Court held as under: "Right to claim exemption is created by the Act and Rules . The special or general conditions of contract must act in furtherance of and not contrary to the statutory provisions. Amendment to Clause- 10 in the special conditions to the effect that sales tax declaration forms will not be accepted is directed in breach of rule 7(1) also. Direction to pay sales tax in the said amendment is contrary to section s 4 and 5 of the Act and rule 7(1) of the Rules, and therefore, void, it is obvious that no such term can be incorporated in a contract with the purchasing dealers . It is no answer to say that the purchasing dealers has agreed to the incorporation of an illegal term of a contract..." 34. There seems to be no dispute as regard the proposition of law laid down in the aforesaid judgment is concerned. However, to apply the ratio of the aforesaid judgment, it must be established that any condition contained in the contract, is in contravention to any statutory provision and thus falls within the mischief of section 23 of the Contract Act. The petitioners have to show that the stipulation asking the buyers to pay the local tax contravenes the statutory provision. It will depend upon the finding, whether the sale in question is governed by the Central Sales Tax Act or the General Sales Tax Act . The petitioners have to show that the stipulation asking the buyers to pay the local tax contravenes the statutory provision. It will depend upon the finding, whether the sale in question is governed by the Central Sales Tax Act or the General Sales Tax Act . The validity of the clause in the contract will depend upon such findings and will be dealt with accordingly. 35. From the law laid down by the Apex Court in the above referred judgments, what emerges is, that with a view to determine the sale being an inter- state, it must occasioned the movement of goods from one place to another or by transfer of document of title to the goods during their movement from one place to another. In the present cases, the petitioners have not placed on record any document to show that the goods have been moved from the State of J&K to any other State on the basis of any sale letter permitting such movement. As far the contract of sale is concerned, it clearly indicates that sale will be local one in the State of J&K and local sales tax will apply . Condition No. 9.2 allows transportation of the goods from the State of J&K to outside through registered public transport contractor to attract the incidence of Central Sales Tax. This stipulation ( 9.2) under General Terms and Conditions, has been superseded by Special Terms and Conditions particularly note appended at the foot of the Special Terms and Conditions . Even the delivery clause clearly indicates that the goods are to be lifted " As is where is basis". The transportation of the goods out-side the State of J&K which admittedly has taken place, is not pursuant to any stipulation or condition in the contract nor it can said to be a natural incidence of contract of sale. 36. I am in agreement with the contention of the learned counsel for the petitioners that situs in goods cannot determine the exigibility of the tax. However, in order to determine whether sale is an inter-state sale, test laid down by the Apex Court in case State of Andhra Pradesh v. National Thermal Power Corporation Ltd. reported in 2002(5) SCC 203 must be satisfied. However, in order to determine whether sale is an inter-state sale, test laid down by the Apex Court in case State of Andhra Pradesh v. National Thermal Power Corporation Ltd. reported in 2002(5) SCC 203 must be satisfied. If these tests are applied, the Condition No. 1 that there must be contract of sale incorporating the stipulation express or implied regarding the inter- state movement of the goods, is not satisfied from the facts of the present cases. There is no express stipulation regarding the inter -state movement of the goods rather such a stipulation contained in Condition No. 9.2 of the General Terms and Conditions of contract has been excluded from the contract in express terms by incorporating a note in Special Terms and Conditions. The document to evidence the transfer of the goods, if any also do not indicate that the seller is a party to the transfer of title in goods meant for movement out side the State. Therefore, there is also no implied condition to this effect. It is, however, a fact that there has been movement of the goods from the State of J&K to out- side the State, which fact is evident from the averments contained in the writ petitions and the deposit of the tax by the petitioners under the interim orders of the court while seeking permission to remove the goods out side the State. Third condition as laid down by the Apex Court that there must be movement of the goods from one State to another State where the sale concludes, is also not satisfied. In the present cases, contract of sale was executed at Delhi and transaction of the sale is concluded at the time of delivery of goods in the State of Jammu and Kashmir. The tenders were accepted, money was deposited and as per the clear stipulation of the NIT, the goods were to be delivered in the State of J&K. The sale letters placed on record also show that the transaction was completed except the delivery of goods in the State of J&K. Therefore, to complete the transaction of sale, the movement of goods from one State to another State, was neither envisaged by contract nor a condition or covenant for completion of contract of sale. The contract of sale include delivery of goods in the State of J&K without involving movement of goods. The contract of sale include delivery of goods in the State of J&K without involving movement of goods. Therefore, movement of the goods thereafter cannot be said to be an incidence of contract of sale. Any movement of the goods from the State of Jammu and Kashmir to out-side, is after the contract of sale is complete in all respects and is at the sole discretion of the buyer. There was no requirement or condition express or implied for the movement of goods from the State of Jammu and Kashmir to out-side to complete the contract of sale. Therefore, the contract of sale cannot be termed as inter-state sale, so as to attract the provision of Section 3 of the Central Sales Tax Act and entitles the petitioners to pay concessional rate of tax envisaged therein. The condition of payment of local tax under the provision of General Sales Tax Act, the sale being local one is clearly applicable. 37. Now coming to the last contention of the learned counsel for the petitioners dealing with the two categories of goods, where the concessional rate of tax is applicable or where there is exemption from payment of tax in the District of Leh. 38. As far the rate of tax applicable to the goods sold is concerned, the General Sales Tax Act provides different rates of tax on different kinds of commodities / goods and same shall apply depending upon the type of goods sold. Therefore, rates of tax to be charged under General Sales Tax Act, will be as provided under different Notifications issued by the Government prescribing a particular rate of tax for the a particular kind of goods. As far the question of exemption from payment of tax is concerned, Notification SRO 40 dated 8.3.1995 grants exemption from payment of General Sales Tax under Section 5 of the said Act in respect to goods sold by the dealer in the Districts of Leh and Kargil, subject to conditions stipulated therein. . As far the question of exemption from payment of tax is concerned, Notification SRO 40 dated 8.3.1995 grants exemption from payment of General Sales Tax under Section 5 of the said Act in respect to goods sold by the dealer in the Districts of Leh and Kargil, subject to conditions stipulated therein. . Relevant extract from the said SRO is reproduced as under:- "SRO 40: In exercise of the powers conferred by section 5 of the Jammu and Kashmir General Sales Tax Act, 1962 (XX of 1962), Government of hereby exempts from payment of tax all the goods sold, by the dealers in the Districts of Leh and Kargil subject to the following conditions: (a) The dealer shall obtain exemption licence in the prescribed form on payment of Rs. 30/- from the Assessing Authority within a period of six months from the date of issue of this notification. (b) A consignment of goods imported from any place in the State outside the Districts of Leh( Ladakh ) and Kargil by or on behalf of any dealer and intended to be imported into the said districts shall be accompanied by the documents prescribed under Section 15-A of the said Act till it is delivered at its destination and the person incharge of the consignment including the driver of the vehicle in which it is under transport shall produce it for inspection and verification to the Assessing Authority or any other person authorized by the Commissioner of Sales Tax in this behalf. (c) ................................... (d) .................................. (e) .................................... (f) .................................. (g) .................................. (h) A dealer who has his head office locate outside the region of Ladakh and operates a branch in the region of Ladakh, shall conspicuously display the branch registration certificate in the business premises. (i) Where any dealer located outside the region of Ladakh claim that he is not liable to pay tax on the goods sent by him to his branch office or to his agent as the case may be, by reasons of transfer of such goods by him to his place of business in Lakakh region and not by reasons of sale, the burden to prove that the movement of those goods was so occasioned shall be on that dealer. He shall furnish to the Assessing Authority, within the prescribed time or within such further time as that authority may for sufficient reasons permit, a declaration duly filled and signed by the principal officer of the other place of business or his agent as the case may be, containing the prescribed particulars in the form to be prescribed by the Commissioner, Sales Tax, alongwith the evidences of despatch of such goods . If the Assessing Authority is satisfied after making such enquiry as he may deem necessary that the particulars contained in the declaration furnished by a dealer are true to the effect that the goods were transferred to the region of Ladakh for re- sale in the Ladakh Region, he may at the time of assessment of tax payable by the dealer make an order to the effect that the movement of goods to which the declaration relates shall be deemed for the purpose of this notification to have been occasioned otherwise than as a result of sale......" 39. A perusal of this Notification shows that it is not every sale in the Districts of Leh and Kargil, which is exempt from payment of sales tax. It is the sale by the dealers in the Districts of Leh and Kargil which is exempted, subject to conditions which inter alia include : procuring exemption licence in the prescribed form and the import of goods in the Districts of Leh and Kargil for re- sale etc. None of these conditions are applicable in the present cases. At the first place, the sale has not been made in the Districts of Leh and Kargil. The sale was made at Delhi, though the goods were lying in the State of J&K and the sale is not by the dealer in the State of J&K or by the branch offices of the dealers located outside the region of Ladakh . It is nobodys case that the petitioners had obtained exemption licence from the competent Assessing Authority as prescribed under the aforesaid SRO/ Notification. It is nobodys case that the petitioners had obtained exemption licence from the competent Assessing Authority as prescribed under the aforesaid SRO/ Notification. Therefore, the conditions and justifications provided under the aforesaid SRO being not satisfied and attracted, this SRO has no application to the present cases and such of the petitioners who have lifted the goods from the Ladakh Region are not entitled to the benefit of exemption either under the General Sales Tax Act or under Section-8 ( 2-A)of the Central Sales Tax Act. 40. In view of the detailed discussion, I do not find any merit in these petitions, which are accordingly dismissed. The differential amount of tax deposited by the petitioners before the Registrar Judicial of the High Court under any interim direction of this court, shall be transmitted to respondents, to be deposited in accordance with the provisions of General Sales Tax Act.