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2. Before proceeding further to consider the contentions, we shall describe the nature of the transactions. A party who requires an automobile has, under the prevalent regulations, to deposit a sum of Rs. 2,000 called "security deposit" and keep it in a post office savings bank account. The security deposit account is then pledged in favour of an automobile dealer subject to withdrawal only with the written authority of the dealer. Taking one transaction as typical, there was a deposit on 29th July, 1971, at Nellore, by a party named G. Venkatanarayana Reddy. On 16th June, 1972, the assessee, after receiving the requisite number of vechicles from Hindustan Motors Limited, Calcutta, made what is called "stock transfer" and this transfer was to its branch at Nellore. There is a delivery note executed by the branch at Nellore on the same date in favour of the head office of the assessee at Madras. On 17th June, 1972, the pledge of the deposit is released and there is a communication addressed to the Postmaster, Nellore, for the purpose. This letter is said to have been written by the Nellore branch. After obtaining a letter from the purchaser that he has not purchased any new motor car of any other brand during the calendar year anywhere in India, the assessee delivered the motor car on 16th June, 1972, to the party. The invoice purports to be by the Nellore branch of the assessee. The purchaser executed a letter for having taken delivery of the vehicle along with tools and accessories. There is also an intimation on the same date to the Regional Transport Officer about the sale of the vehicle. The contention in this and in similar cases of sale was that they were all local sales in Andhra Pradesh so that they cannot be taxed under the Central Sales Tax Act. It was also stated that the assessee had been taxed by the Andhra Pradesh sales tax authorities and that in spite of the fact that a reference was made to the assessment under the Central Sales Tax Act in Madras, the Andhra Pradesh sales tax authorities had proceeded on the basis that the assessment in Andhra Pradesh was proper.

6. The attempt of the learned counsel for the assessee was to bring his case within the principle of case No. II extracted above. He pointed out that this is a case where the assessee had taken his vehicle to Nellore to his own branch and that thereafter the vehicle was sold to the purchaser. The Sales Tax Tribunal has pointed out that as far as files Nos. 4 to 25 and 30 to 34 are concerned, the movement of the cars have been occasioned by the contracts of sale, by taking into account the earmarking of each individual car with chassis numbers and the engine numbers in the stock transfer notes as relating to a particular purchaser. Where there has been earmarking in Madras and the subsequent transfer of the vehicle to Nellore, the question is whether there is an inter-State sale or a sale outside the State.

7. In case No. II itself, as described by the Supreme Court in Balabhagas Hulaschand v. State of Orissa [1976] 37 S.T.C. 207 (S.C.), the following sentence occurs :
It will be seen that in this case the movement of goods is neither in pursuance of the agreement to sell nor is the movement occasioned by the sale.

8. In the present case, in view of the facts described above, it would be clear that there was a sale in favour of the purchaser and that the movement was occasioned by the sale. It may be that it was only a credit sale as the money was to be subsequently realised by the branch at Nellore. But this circumstance by itself would not show that this is a case where the movement of goods is not in pursuance of the agreement. The agreement was to sell Ambassador vehicle to the purchaser at Nellore and it is in pursuance of the agreement the vehicle was earmarked in Madras and was actually delivered in Nellore. In these circumstances, this is a case which falls squarely within the scope of Section 3(a) of the Central Sales Tax Act.

10. Basing his stand on State of Bihar v. Tata Engineering & Locomotive Co. Ltd. [1971] 27 S.T.C. 127 (S.C.), the learned counsel for the assessee contended that so long as there was possibility of diversion of the goods by the assessee before the actual delivery to the purchaser, it could not be stated that there was a sale in pursuance of which there was a movement of goods. That case itself refers to an earlier decision in K. G." Khosla and, Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxes, Madras [1966] 17 S.T.C. 473 (S.C.). In the last mentioned case, the Supreme Court held that before a sale could be said to have occasioned the import, the movement of goods must have been incidental to the contract or in pursuance of the conditions of the contract and that there should be no possibility of the goods being diverted by the assessee for any other purpose, meaning thereby that there should be no possibility of diversion, according to law or contract, and, not in breach of them. We have to consider the question in the light of the actual facts that happened in the present case. The vehicles after they were earmarked were transported to Nellore and were actually delivered to the purchaser for whom it was earlier earmarked. In the light of the Control Order which was existing in respect of the motor vehicles, there was no possibility of diversion by the assessee because the assessee would have to apply for permission from the concerned authorities. The earmarking is itself a recognition of a pre-existing contract of sale. Therefore, we are unable to hold that on the facts there was any possibility of diversion so that the transaction could not be said to be inter-State in nature. The contention is sought to be built on the basis that the appropriation which was made in the State was not the final appropriation, as the purchaser was not bound to accept the vehicle as appropriated by the assessee. Section 4(2)(b) of the Central Sales Tax Act, 1956, contemplates that a sale or purchase of goods shall be deemed to take place, in the case of unascertained or future goods, inside a State, if at the time of their appropriation to the contract of sale by the seller or by the buyer, whether assent of the other party is prior or subsequent to such appropriation, the goods were inside the State. Therefore, the assent of the buyer is not a sine qua non to fix up the location for the sale. After the appropriation had been made by the assessee, it would not have been possible for the assessee to divert the goods on the facts here. This is not a case where such goods were actually diverted. In these circumstances, the transactions were rightly treated as inter-State sales and the tax levied accordingly. The revision petitions fail and are dismissed with costs, Counsel's fee Rs. 250.