JUDGMENT : J.K. Ranka, J. Both theses sales tax revision petitions by the petitioner-assessee are directed against the order of the Rajasthan Tax Board dated 24/4/2003 for the assessment years 1999-2000 and 2000-2001 by which it decided the issue relating to freight in favour of the assessee and against the Revenue. On the issue relating to sale of Empty Gas Cylinders (for short, 'EGC') against the assessee to Reliance Industrial Infrastructure Limited (for short, 'RIIL') on the basis of a tripartite agreement by which on one hand the RIIL was purchaser (buyer) of the EGC. On the basis of the tripartite agreement, the cylinders were to be sent to Reliance Petroleum Limited (for short, 'RPL'). It has been the claim of the petitioner that the sales were made in the course of Inter State Lease transaction within the meaning of Section 3(a) of the Central Sales Tax Act (for short, 'CST Act'). It is the contention of the petitioner-assessee that the Inter State movement of goods was in pursuance of the lease agreement as goods were delivered to RPL (lessee) upon the instructions of RIIL (lessor) and since the assessee was a seller, therefore, the transaction was clearly in the nature of lease and as such, the holding of the Assessing Officer (for short, 'AO') that it is liable to tax was entirely illegal and unjustified. It was the contention that the tripartite agreement was in between RIIL, RPL and the petitioner-assessee was supplier of EGC and the purchase order and the lease agreement between the three were integrally connected as one and which could not be split from one another. It has been further contention of the petitioner-assessee that it being a supplier of the EGC was equally involved in the transaction. 2. The AO, in the assessment order held that the transaction was a simple sale and merely because of an independent agreement in between RIIL and RPL and merely because the petitioner-assessee was shown as a supplier in the said agreement, it could not take benefit of a transaction in between RIIL and RPL. 2. The AO, in the assessment order held that the transaction was a simple sale and merely because of an independent agreement in between RIIL and RPL and merely because the petitioner-assessee was shown as a supplier in the said agreement, it could not take benefit of a transaction in between RIIL and RPL. The AO, while holding that it is a transaction of a sale simpliciter, has come to a conclusion that the sale by the petitioner-assessee was independent of the so-called agreement between two Reliance Companies namely; RIIL & RPL and accordingly held that there is no question of treating the transaction as Inter State Lease Transaction under the CST Act. 3. Dissatisfied with the said assessment and holding the same as sales/supplies to RPL and RIIL, the petitioner carried the matter in appeal before the Deputy Commissioner (Appeals) (for short, 'DC(A)'. The DC(A) also, after considering the material placed on record, dismissed the appeal of the petitioner-assessee. 4. Dissatisfied with the dismissal of appeal, a further appeal came to be preferred before the Rajasthan Tax Board by the petitioner-assessee, who also, after analyzing the evidence on record and the tripartite agreement, came to the conclusion that the Revenue was well justified in coming to the conclusion that it was a mere sale, was in the nature of Inter State Sale could not be held to be Inter State Lease transaction thus upheld the finding of the AO as well as DC(A). 5. Both the revision petitions were admitted for hearing on the questions of law framed by the petitioner and primarily is "whether the above is a Inter State Sale or Inter State Lease transaction". 6. Mr. Vivek Singhal, ld. counsel for the petitioner-assessee contended that the transaction was not in the nature of Inter State Sale but was Inter State Lease Transaction under the CST Act. He contended that Section 3 defines movement of the goods from one State to another. He contended that there was a tripartite agreement in between the three companies namely; the petitioner on one hand, who was supplier of EGC; and on the other hand, RIIL, who was purchaser of the EGC who had a lease transaction with RPL and thus, even though the lease agreement may be in between two Reliance Companies but until and unless the petitioner-assessee was there, their agreement was incomplete. He contended that on the basis of instructions of RIIL, EGC were supplied to RPL. He contended that when the agreement is read as a whole, it provides that the petitioner-assessee supplied goods in pursuance of a lease agreement and assessee being a party to the transaction it becomes Inter State Lease Agreement and thus is not liable to pay tax under the CST Act. It was further contended that the purchase order placed by RIIL with the petitioner-assessee was in pursuance of the above lease agreement entered into by and between RIIL with RPL, who inter-se had entered into a lease agreement but both the purchase order and the lease agreement were integrally connected, mutually inter-dependent and thus it could not be said that the impugned transaction is of sale and supply. He contended that both these contracts were interconnected in the sense that one could not have taken place without the other. Thus, he contended that there was Inter State Lease Transaction and not Inter State Sale Transaction. He relied upon judgments rendered by Karnataka High Court in the case of India Equipment Leasing Ltd. v. Deputy Commissioner of Commercial Taxes, (1998) 111 STC 403 (Kar); English Electric Co. of India Ltd. and Anr. v. The Deputy Commercial Tax Officer and Ors., (1976) 38 STC 475 (SC); 20th Century Finance Cropn. Ltd. & Anr. v. State of Maharashtra (2000) 119 STC 182 ; United Timber Corporation v. State of Kerala, (2008) 16 VST 19 ; Srei International Finance Ltd. v. State of Orissa and Ors., (2008) 16 VST 19 3 (Orissa); Oil India Ltd. v. The Superintendent of Taxes and Ors: (1975) 35 STC 445 and State of Bihar and Anr. v. Tata Engineering and Locomotive Co. Ltd., (1971) 27 STC 127 and contended that the claim of the petitioner-assessee deserves acceptance. 7. On the contrary, ld. counsel for the Revenue contended that the petitioner-assessee is totally an outsider in the lease agreement and by no stretch of imagination, it could be said that there was a lease where petitioner-assessee was a party to such agreement and merely because the petitioner-assessee was supplier of the EGC and its name finds place in the lease agreement in between RIIL and RPL, its benefit could not accrue to the petitioner-assessee. He further contended that sale consideration was admittedly received by the petitioner-assessee and no amount over and above the sale consideration, was liable to be received or receivable as lease money on month to month basis or otherwise. Once the assessee supplied goods, may be on the directions of RIIL to RPL as per the agreement, it could not be said that it becomes a transaction of lease, the question is whether the assessee got something out of the lease transaction in between the two Reliance Companies and contended that no amount over and above the sale consideration was received or receivable. He further contended that Section 3 (a) of the CST Act is quite clear in this regard and all the three authorities in unison have come to a conclusion that it is an Inter State Sale Transaction and not Inter State Lease Transaction. 8. I have considered the arguments advanced by counsel for the parties including the material available on record and the judgments on which reliance has been placed. 9. An interesting issue arise in the instant petitions. Admittedly, the assessee is only a supplier/seller of EGC to one RIIL/purchaser (buyer/lessor) who had an agreement of lease with one RPL (consignee/lessee) and agreement has been entered by the two Reliance Companies where certain lease money was required to be paid by the lessee RPL to lessor RIIL on the terms and conditions entered into by and between those two Reliance Companies. However, merely because the assessee has been shown to be a party who supplied the EGC in the lease agreement, in my view, cannot claim any benefit out of the two lease agreements which were basically in between RIIL and RPL Ltd.. It would be appropriate and fruitful to quote Section 3 of the CST Act, which is the bone of contention between the parties, which provides ad-infra:- "3. When is a sale or purchase of goods said to take place in the course of inter-State trade or commerce.- 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 (b) is effected by a transfer of documents of title to the goods during their movement from one State to another. Explanation 1. Explanation 1. - Where goods are delivered to a carrier or other bailee for transmission, the movement of the goods shall, for the purposes of clause (b), be deemed to commence at the time of such delivery and terminate at the time when delivery is taken from such carrier to bailee. Explanation 2 - Where the movement of goods commences and terminates in the same State it shall not be deemed to be a movement of goods from one State to another by reason merely of the fact that in the course of such movement the goods pass through the territory of any other State." 10. Admittedly, the entire sale consideration on the basis of the so called lease agreement having supplied EGC to RPL on behalf of RIIL was received by the assessee as per the terms and conditions and no amount, over and above, was received or receivable in terms of the lease agreement in between the parties. The Tax Board, in the impugned order, has gone into the terms and conditions in between the two Reliance Companies vis-a-vis the assessee and it would be appropriate to observe that the terms and conditions specifically provided that the purchase order for the procurement of the EGC, to be provided on lease by the RIIL to RPL, would be given by RIIL (lessor) only to those suppliers of the EGC which would be selected by both i.e. the lessor and lessee on the basis of their mutual consultation and on such terms as were agreed to by and between them. It was not that entire purchases were required to be made from the assessee and there could be several suppliers but the supplier was also to be selected by lessor (RIIL) in consultation with RPL (lessee). The agreement also stipulated that the lessor (RIIL) would appoint lessee (RPL) as its agent to inspect, receive, deliver, obtain clearance from concerned authorities and to take steps for installation of the goods received from the Manufacturer (assessee). Therefore, though the purchase order placed by the RIIL with the assessee was in pursuance of the above lease agreement but the assessee had no say. It can be said that the lease agreement and purchase order were integrally connected and therefore, mutually inter-dependent. Therefore, though the purchase order placed by the RIIL with the assessee was in pursuance of the above lease agreement but the assessee had no say. It can be said that the lease agreement and purchase order were integrally connected and therefore, mutually inter-dependent. It can be said that independent of the lease agreement, mere transaction of sale could not have been possible because in the absence of the lease agreement, it is clear that there was no possibility for RIIL (lessor) to place the purchase order with the assessee. It further reveals that two contracts (i) contract of sale between the assessee and RIIL for supply of goods and (ii) contract of lease between RIIL and RPL for the leasing of the goods on mutually agreed terms were entered into. Though both these contracts were inter-connected in the sense that one could not have taken place without the other but in my view, the objectives of both these contracts were different. While the contract of sale aimed at purchasing goods from the assessee, the contract of lease provided for leasing the goods after procurement. Hence, both these contracts despite being mutually inter-dependent were exclusive in seeking the fulfillment of different objectives for which these were entered. The RIIL, in pursuance of the contract of sale, placed the order with the assessee for the supply of goods on behalf of the RPL (lessee) in compliance of which the assessee sent goods to RPL (lessor) after raising invoices in favour of RIIL (lessor). Therefore, in my view, the justification of the Tax Board and the Revenue Authorities appears to be just and proper that the inter-State movement of the goods was the result of the purchase order placed by the RIIL and in pursuance thereof, the assessee supplied goods which occasioned the movement of the goods and not the lease agreement. Admittedly, as observed earlier, except that the assessee got purchase order and nothing more on the basis of the lease agreement between RIIL and RPL, which does not mean that the assessee was functioning in furtherance of the lease agreement between RIIL and RPL and in my view, the Revenue Authorities including the Tax Board have rightly come to the conclusion that the sale of goods were occasioned by the lease agreement between RIIL and RPL and not the purchase order placed by RIIL with the assessee. The fact that the assessee was not privy to the lease agreement except supply of goods between RIIL and RPL, is also a fact that the movement of goods took place in fulfillment of the purchase order which was in the nature of the contract of sale between RIIL and the assessee, further proves beyond doubt that the inter-State movement of goods in the facts of the present case by the assessee was occasioned by the purchase order despite its inter-connectivity with the lease agreement between RIIL and RPL. The Tax Board has rightly come to the conclusion that the consideration of the entire purchase order received by the assessee was paid by the RIIL in pursuance of the purchase order placed by the RIIL to the assessee and thus, after delivery and receipt of sale price, the property in lease definitely stood transferred in favour of the RIIL and once this transaction was over with the supply of the goods and receipt of payment, there was no concern or connection of the assessee with RIIL or RPL and the assessee was an outsider of the inter-se agreement in between RIIL (lessor/purchaser) and RPL (lessee-consignee). Therefore, it is a clear cut case of goods having been sold in the course of inter-State trade and commerce in pursuance of a contract of sale which became liable to tax under the CST Act on the transaction of sale in favour of RIIL and irrespective of the goods so supplied, were meant for being leased out, subsequently to RPL under a separate lease agreement or even one agreement, if that case would have been. Once, as aforesaid, the transaction, having come to a close after delivery as well as receipt of entire sale consideration, in my view, nothing remained to be performed by the assessee vis-a-vis two Reliance Companies and no right accrued to the assessee and it was simply an outsider and cannot be said to be beneficiary of an ongoing transaction in between the two Reliance Companies. The transaction is definitely a transaction of sale which was in the nature of inter-State Sales within the ambit of Section 3(a) of the CST Act. The transaction is definitely a transaction of sale which was in the nature of inter-State Sales within the ambit of Section 3(a) of the CST Act. Having reproduced Section 3(a), herein above, two conditions are required to be fulfilled for taking any transaction of sale as an inter-State sale vis (i) there must be inter-State movement of the goods and (ii) the nature of such movement of goods must be occasioned by a contract of sale. 11. The Hon'ble Apex Court, in the case of M/s. Tata Iron and Steel Co. Ltd. Bombay v. S.R. Sarkar and others: (1960) 11 STC 655 held ad-infra:- "A transaction of sale is subject to tax under the Central Sales Tax Act, 1956, on the completion of the sale, and a mere contract of sale is not a sale within the definition in section 2(g). A sale being by the definition, transfer of property, becomes taxable under section 3(a) if the movement of goods from one State to another is under a covenant or incident of the contract of sale, and the property in the goods passes to the purchaser otherwise than by transfer of documents of title when the goods are in movement from one State to another." 12. In my view, the subsequent leasing after having goods purchased from the assessee by the two Reliance Companies does not take the entire transaction as contended by counsel for the assessee that it is a lease agreement in between the assessee RIIL and RPL, as the case may be. The goods were delivered and title passed. If under the agreement, the movement of goods was because of a clause in the contract of sale (purchase order placed by RIIL to the assessee) or as an incident of contract of sale (leasing of goods under the agreement between RIIL and RPL), the same shall be deemed to have taken place in the course of inter- State trade and commerce. On perusal of clauses of the agreement, it is crystal clear that the movement of goods took place in fulfillment of the purchase order which was in the nature of the contract of sale between the assessee and RIIL. On perusal of clauses of the agreement, it is crystal clear that the movement of goods took place in fulfillment of the purchase order which was in the nature of the contract of sale between the assessee and RIIL. Therefore, I have no hesitation in holding that the transaction in between the assessee and the RIIL was certainly in the nature of inter-State sale within the meaning of Section 3(a) of the CST Act, no matter whether the purchase order was incidental to the lease agreement between the RIIL and RPL. 13. Andhra Pradesh High Court, in the case of I.T.C. Classic Finance and Services v. CIT, (1995) 97 STC 330 held ad-infra:- "The transactions covered by Special Appeal No.1 of 1995 are clearly inter-State transactions falling within the ambit of section 3(a) of the Central Sales Tax Act, 1956. The movement of the goods from the State of Madras to Hyderabad is the result of the contract. It is immaterial in which State the property in the goods passed. What is material is that 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 inter-State movement must be preceded by a sale. (English Electric Company of India Ltd. v. Deputy Commercial Tax Officer [1976] 38 STC 475 (SC), Balabhagas Hulaschand v. State of Orissa [1976] 37 STC 207 (SC) and Union of India v. K.G. Khosla and Co. Ltd. [1979] 43 STC 457 (SC). If the movement of the goods is because of a clause in the contract or as an incident of contract, the same shall be deemed to have taken place in the course of inter-State trade or commerce. In the transaction illustratively discussed by the Commissioner, the transport of goods from one State to another was an incident of the contract between the assessee and the lessee. The very hiring itself is the incident of the contract of sale, which occasioned the inter-state movement of the goods from Madras to Andhra Pradesh. Without this contract, the goods would not have moved out of Madras. This aspect we have already discussed while dealing with the question whether the purchase order and the lease agreement are separate or constitute one integral transaction." 14. Without this contract, the goods would not have moved out of Madras. This aspect we have already discussed while dealing with the question whether the purchase order and the lease agreement are separate or constitute one integral transaction." 14. On perusal of the aforesaid judgment as also the judgment of the Hon'ble Apex Court in the case of M/s. Tata Iron and Steel Co. Ltd. Bombay v. S.R. Sarkar and others (supra), in my view, the facts of the present case vis-a-vis I.T.C. Classic Finance and Services (supra) are squarely covered. In the aforesaid case I.T.C. Classic Finance and Services, purchased equipment from the manufacturer outside the State for being supplied to the lessee in pursuance of the lease agreement for giving equipment on lease and the lessor placed the order for supply of the goods to its specification with the manufacturer outside the State and later on the lessor confirmed it, as in the present case, the goods were supplied by the manufacturer directly to the lessee upon the instructions of the lessor, the invoice was raised against the lessor, showing the lessee as consignee. However, in the said case, the Revenue levied tax on the lease money collected by the company i.e. the lessor from the hiring of the equipment received by the lessee outside the State but the Court held that the lease transaction was sales in the course of inter-State trade and commerce but was not liable to local tax and transfer of right to use goods on the analogy that the same goods cannot be subject to tax twice - once as sale and secondly as deemed sale in the face of the legislative intent of single point taxation. Therefore, the High Court held that the transaction was nothing but inter-State sale only exigible to tax under the CST Act. 15. Therefore, the High Court held that the transaction was nothing but inter-State sale only exigible to tax under the CST Act. 15. Learned counsel for the assessee relied upon the judgment of Karnataka High Court in the case of India Equipment Leasing Ltd. (supra) wherein it has been held that for the purpose of determining the transaction as to whether it is an inter-State sale or sale in the course of export, the provisions of Sections 3 and 5 of the Central Sales Tax Act have been interpreted by the Apex Court in series of judgments and therefore, if a transaction of sale falls within the purview of the principles laid down under Sections 3 or 5 of the Central Sales Tax Act, no tax is levied by the State Legislature under Section 5C of the Act, if the movement of the goods from one State to another. An incident or covenant of contract of sale, then the State Legislature cannot levy the tax and it has made sufficient provision to exclude such transactions in the case of leasing contracts where the rights to use is given, it must be of goods and the goods as defined under Section 2(7) of the Sale of Goods Act which refers to only moveable property. Therefore if the facts are analyzed from the judgment, inter-alia vis-a-vis the assessee are quite distinct and distinguishable inasmuch as in the present case is concerned, the goods were delivered and the entire payment was received. 16. In the case of English Electric Co. of India Lt (supra) relied by the assessee it has been observed that Asha Metal Works of Bombay referred to as the Bombay buyer wrote to the Bombay branch of the appellant asking for lowest quotation of certain goods. The Madras branch which has the principal factory, and manufacturer of goods was written by the Bombay branch. The Madras branch wrote to the Bombay branch quoting the prices for Madras. The Bombay branch then wrote to the Bombay buyer that the price was for Madras and delivery would be ex-works Madras. The Bombay buyer thereupon placed the order with the Bombay branch and it was contended on behalf of the English Electric Co. The Madras branch wrote to the Bombay branch quoting the prices for Madras. The Bombay branch then wrote to the Bombay buyer that the price was for Madras and delivery would be ex-works Madras. The Bombay buyer thereupon placed the order with the Bombay branch and it was contended on behalf of the English Electric Co. of India Ltd. that the sale was at Bombay inasmuch as the Bombay buyer placed the firm order at Bombay, payment was at Bombay, railway receipt of the Bombay branch and the goods were to be delivered at Bombay and the question whether the sale was an inter-State sale or a sale at Bombay, the Hon'ble Apex Court held that the steps taken from the beginning to the end by the Bombay branch in coordination with the Madras factory show that the Bombay branch was merely acting as an intermediary between the Madras factory and the buyer, it was the Madras factory which pursuant to the covenant in the contract of sale caused the movement of the goods from Madras to Bombay. Thus facts are quite distinguishable and there no question of lease, arose at all. 17. The case of 20th Century Finance Corpn. Ltd. and Anr. (supra) relied upon by assessee is also distinguishable. 18. In the case of Srei International Finance Ltd. v. State of Orissa and Ors (supra), the judgment is distinguishable in as much as in that case the lease rent was agreed at Rs.23 lakhs per year, no sale consideration had passed and only goods were being used at an agreed lease rental of Rs.23 lacs per year. The facts of the present case are that entire sale consideration was received and delivery has been given and no further consideration is required to be received over and above the sale consideration, therefore facts are distinguishable. 19. In the case of Oil India Ltd. (supra) is quite distinguishable inasmuch as in that case the movement of crude oil from State of Assam was an incident of the contract of sale and therefore sales to the refinery at Barauni were inter State sales and Bihar Government had no jurisdiction to tax under sales Tax law of that State and Hon'ble Apex Court held that the petitioner was entitle to refund of tax collected by the Bihar Government, therefore facts are quite distinct. 20. 20. In the case of State of Bihar and Anr. v. Tata Engineering and Locomotive Co. Ltd. (supra), the Hon'ble Apex court observed that it is a well established position in law that where the terms of a contract of sale, the buyer is required to remove the goods from the State in which he purchased those goods to another State and when the goods are so moved, the sale in question must be considered as a sale in the course of inter-State trade or commerce. 21. The other judgments relied by the counsel for the petitioner are also distinguishable. 22. In view of the facts found in the instant case and judgments, there is no hesitation in holding that the aforesaid transaction is sale of EGC is inter State Sale transaction and not at all in the nature of inter-State Lease Transaction. 23. The revision petitions are dismissed. The question of law is answered against the assessee and in favour of the Revenue with no order as to costs. Revisions dismissed.