- (1.)This appeal is against the judgment dated 18.10. 1985 by which writ petition filed by the respondent has been allowed. Briefly stated the facts are as follows:- the respondent is a co-operative society under the Gujarat Co-operative Societies act, 1961. It is engaged inter alia, in the manufacture of milk and cocoa products and for that purpose has two units, one at anand and the other at Mogar, both in Kaira district. The respondent receives milk, from milk producers who are all members of the respondent unit. After the product is received and some manufacturing process is undertaken by the respondent, the product is then sent to a federation known as gujarat Co-operative Milk Marketing Federation limited'. That Federation is also registered under the Gujarat Co-operative societies Act, 1961.
(2.)The respondent submitted a price list to the superintendent of central excise, anand. In the price list they claimed a deduction of the commission charged by the federation from the union for the purposes of marketing the products of the respondent. The commissioner rejected the price list on the ground that the respondent-union and the federation were "related persons" within the meaning of section 4 (4) (c) of the Central Excise Act, 1944.
(3.)The respondent, thus, filed a writ petition challenging the rejection of its price list. The High Court has, by the impugned judgment, allowed the writ petition and held that the union and the federation cannot be said to be related persons. The High court has so held on the basis of a decision of this Court in the case of Union of india and Ors. v. ATIC Industries Ltd. In this case, it has been held that in order to attract the definition of a "related person" in section 4 (4) (c) , the assessee and the person alleged to be related, must have interest, direct or indirect, in the business of each other. It has been held that if there is a shareholder, then the shareholder may have an interest in the assessee company, but merely because some products are being sold by the assessee to the shareholder, it cannot be said that the assessee has any interest in the business of the shareholder. The ratio laid down in this case would fully cover the present case. In this case also, the union, being a member of the federation, may have an interest in the federation. However, the question would be whether the federation has any interest in the business of the union. Merely because the federation purchases milk from the union would not be sufficient for the purpose of