SETHURAMAN, J.

This tax revision case has been filed under section 38 of the Tamil Nadu General Sales Tax Act by the State of Madras against the order of the Sales Tax Appellate Tribunal dated 4th December, 1973, holding the assessee to be not liable to tax under the Central Sales Tax Act on a turnover of Rs. 7, 39, 353.14. The assessee is a dealer in non-ferrous metals. In the course of the assessment proceedings the assessing officer noticed that the assessee had effected sales to the Executive Engineer (Public Health), Central Stores, Ernakulam, Cochin-16, on several dates. The assessee sought exemption from tax on the sales on the ground that these sales were effected by transfer of documents within the meaning of section 3(b) of the Central Sales Tax Act and that he had filed E-I and D forms in respect of the same. The assessing officer found that the filing of D forms from the Government departments did not satisfy the requirements of the Act as the State Government departments were not registered dealers. Since all the sales were to the Government departments, he issued notices to the assessee asking for its objection to the proposed assessment of the said turnover. The assessee pointed out that there was some pending legislation before the Parliament and wanted the assessment to be deferred till the passing of the said amendment. It questioned also the jurisdiction of the State to assess the said amount to tax. The assessing officer rejected these contentions. He found that the assessee entered into a contract with another entity in Bombay and that the Bombay entity despatched the goods to the respective executive engineers. He considered the sales to be taxable in this State under section 3(b). The assessee appealed and the appellate authority was of the view that the assessee had sold goods purchased from Maharashtra while on movement from Maharashtra to Kerala attracting liability to tax under section 2(b). The assessee, thereafter, filed a second appeal before the Sales Tax Appellate Tribunal. The Tribunal came to the following conclusions :1. The sale fell within section 3(a) and the State of Tamil Nadu had no jurisdiction to assess the inter-State sale since the goods were not within the State of Tamil Nadu at the time of appropriation;

2. Section 3(b) would ordinarily apply to what is commonly known as "bilti" sales in mercantile practice. These sales not being such sales did not fall within the meaning of section 3(b) of the Act; and

3. Even if it was held that the sale fell within the meaning of section 3(b) of the Act, section 3(a) would prevail in this particular case and this State should not tax them, because the goods were not within this State at the time of appropriation.

It is in this view that the Tribunal cancelled the assessment with reference to the said amount of turnover. The State now contests the grant of exemption from liability to tax with reference to the said sum of Rs. 7, 39, 353.14.

The only question that is raised in the present tax revision case is whether the Sales Tax Appellate Tribunal was justified in holding that section 3(b) of the Central Sales Tax Act did not apply to the turnover in question. Section 3(b) to the extent relevant runs as follows :

"3. 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) ...................

(b) is effected by a transfer of documents of title to the goods during their movement from one State to another.

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 or bailee." *

So the short point for consideration is whether there was a sale effected by transfer of documents of title to the goods during their movement from one State to another. This transfer of documents in order to come within section 3(b), should have taken place subsequent to the goods being delivered to the common carrier and before delivery to the purchaser as shown by the explanation. In the present case, the goods were delivered to the railway for transmission to Kerala and, therefore, there was delivery of the goods to the common carrier. The point is to see whether the transfer of documents took place after the goods were placed on the train.

At this stage, we may set out a few more facts, regarding the manner in which the transactions were put through. The assessee was one of the bidders for supply of caulking lead by a tender called for by the Government of Kerala. The assessee had bid for the tender in its own name giving its Madras address. The Chief Engineer, Public Health Department, Ernakulam, accepted the tender for supply of 500 tons of caulking lead at the rate of Rs. 5, 290 per tonne. The supplies were to be made from time to time at agreed instalments. As regards price, it was stated that :

"The price noted above is for delivery of the materials f.o.r. Ernakulam and inclusive of sales tax. Necessary declaration in form D will be issued by the Ex. Engineer, P.H., Central Stores Division, Ernakulam, Cochin-16, on receipt of the invoice." *

It was further provided that the goods must be insured to the destination, viz., f.o.r. Ernakulam, and that the goods should be despatched freight paid to the Ex. Engineer, P.H., Central Division, Cochin-16. Clause 4 provided as under :

"The materials shall be despatched by goods train. If this is not found possible, the prior approval of the officer mentioned in clause 6 below to be obtained before despatch by passenger train." *

The consignment was to be paid for after the receipt of and survey of the articles by the department. The delivery time of one month was allowed. The letter of acceptance of tender also provided for execution of an agreement and such agreement was executed prior to the despatch of the goods in the present case. There was a provision in the letter of acceptance as well as in the tender to the effect that 90 per cent. of the value of the goods was payable through bank and that the balance was payable within 15 days after receipt of the materials in full and after checking. The contract provided that the goods must conform to the sample and that they were liable to be rejected if they did not so conform. The assessee was liable for damages in case the goods were not of the description and quality agreed upon. The relevant contract was executed on 24th November, 1970, by the Chief Engineer. The six supplies now under consideration were made from Bombay by the Bombay party with whom the assessee had placed an order for an identical quality and quantity of goods. It is with reference to these supplies that the assessee claimed that the goods were directly despatched from Bombay to Kerala and they were not taxable in Tamil Nadu.

From section 3(b) it would be clear that for the sale to fall within the scope of this provision, it is necessary to be established that the same was effected by transfer of documents of title to the goods during their movement from one State to another. In a statement filed by the assessee before the Sales Tax Appellate Tribunal, the dates on which the goods were supplied, the dates of railway receipts and the invoices against the purchaser in Cochin are set out. For instance, on 10th December, 1970, there was a despatch from Bombay of the goods. The invoice made by the assessee bore the date 11th December, 1970. For 90 per cent. of the value a bill was drawn and as far as the balance was concerned, it was paid long afterwards. From the statement it appears that in all these cases, the endorsements or transfer of documents took place only subsequent to the Bombay party putting the goods on board the train. It would, therefore, follow that the present case would come within the scope of explanation 1 to section 3. In other words, the transfer of documents took place after the goods were delivered to the common carrier and before they were delivered to the purchaser. In view of the above facts, it would follow that the assessees sales squarely came within the scope of section 3(b) of the Central Sales Tax Act.If the assessee falls within the said provision, then section 9(1) specifies the State which is entitled to tax the said transaction. Section 9(1) provides that :

"The tax payable by any dealer under this Act (viz., Central Sales Tax Act) on sales of goods effected by him in the course of inter-State trade or commerce, whether such sales fall within the clause (a) or clause (b) of section 3, shall be levied by the Government of India and the tax so levied shall be collected by that Government in accordance with the provisions of sub-section (2) in the State from which the movement of the goods commenced."

There is a proviso to it which runs as follows :

" Provided that, in the case of a sale of goods during their movement from one State to another, being a sale subsequent to the first sale in respect of the same goods, the tax shall, where such sale does not fall within sub-section (2) of section 6, be levied and collected in the State from which the registered dealer effecting the subsequent sale obtained or, as the case may be, could have obtained the form prescribed for the purposes of clause (a) of sub-section (4) of section 8 in connection with the purchase of such goods." *

In the present case, there is no dispute about the fact that there were two sales, viz., a sale by the Bombay party in favour of the assessee and the other subsequent sale by the assessee in favour of the Government of Kerala. Therefore, this case would fall within the proviso as contrasted with the main portion of section 9(1). In the present case, it is also not in dispute that the form prescribed by section 8(4)(a) in connection with purchase of such goods from the Bombay party had been obtained by the assessee from this State. Therefore, this would be the State from which the assessee had effected the subsequent sale after the sale was effected by the Bombay party to the assessee. Therefore, this State would, on the language of the proviso, be the State which can levy and collect the tax from the assessee.The learned counsel for the assessee, however, argued that this State could not have taxed the assessee on the said sale because of certain decisions to which reference will be made now.

Our attention was drawn to the decision in G. A. Galiakotwala and Co. (P.) Ltd., Madras v. State of Madras In that case, the assessee having its place of business at Coimbatore entered into an agreement with a mill situate within the State for the sale of cotton. The assessee placed orders with certain parties in Bombay for the purchase of cotton and as directed by the assessee, the Bombay dealers despatched the goods to the purchasing mills in this State as consignee and sent the railway receipts to the assessee which endorsed the same in favour of the mill after collecting a substantial portion of the sale price. The question as to whether these transactions were liable to be taxed or not, came up for consideration ultimately by the Supreme Court. The Supreme Court held that the sale by the Bombay seller to purchasers in this State was an inter-State sale but that the sale by the assessee to the mill in this State was not an inter-State sale. The sales tax authorities of this State were thus held to have jurisdiction to assess the transaction of sale by the assessee to the mill under section 3(b) of the Central Sales Tax Act, 1956. This decision is of no assistance to the case before us because that was a case where an assessee in this State was affecting sales of goods to another assessee within the same State. But, here the seller is a party from Bombay who sold the goods to the assessee in this State, in the first instance, and the subsequent purchaser from the assessee was in Kerala and the goods were despatched from Bombay to Kerala. In these circumstances, that decision would have no application. There was no scope for any discussion or laying down of any principles in that case regarding the application of the proviso to section 9(1).The learned counsel for the assessee next contended that, in the present case, the goods had not been appropriated until they reached the destination in Kerala and that, therefore, the transfer of property in the goods took place only in Kerala. According to the learned counsel, the endorsements made on the railway receipts and the transfer of documents during the movement of the goods were only for the purpose of enabling the collection of the goods at Cochin and actually the transfer of property took place only in the State of Kerala. If this contention were to be accepted, then it would follow that there was a local sale in Kerala and that, therefore, there could not be an inter-State sale liable to be taxed in this State. As far as this aspect is concerned, the further contention of the learned counsel for the assessee was that the goods themselves were unascertained at the time when they were despatched from Bombay. If they were unascertained goods then it would follow that there would not be a transfer of property in the goods simultaneously with the transfer of documents but only on actual delivery. It is, therefore, necessary to find out whether there is any appropriation of ascertained or ascertainable goods in the present case when the goods started their movement from Bombay. If there was appropriation, then property would pass on the endorsement being made in the railway receipts. It would be seen from the facts here that the goods were of specified description and such goods were despatched from Bombay to Cochin at the instance of the assessee, who sold them to the Kerala Government in identical form and condition. With reference to the point regarding appropriation in this context, there is a decision of the Supreme Court in Balabhagas Hulaschand v. State of Orissa.