MEHSANA DISTRICT SHANKER-4 SEEDS PRODUCE AND SALE CO-OPERATIVE SOCIETY LTD Vs. STATE OF GUJARAT

JUDGEMENT

(1.) AT the instance of the assessee-society, the following question has been referred to us for our opinion under section 69 (1) of the Gujarat Sales Tax Act, 1969 (hereinafter referred to as "the Gujarat Act") : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the applicant-society was a dealer within the meaning of section 2 (10) of the Gujarat Sales Tax Act, 1969, and it was liable to pay sales tax on the sales of cotton-seeds effected by it ?

(2.) THE facts leading to this reference are as under : With a view to implement the scheme drawn by the Planning Commission of the Government of India for betterment of the quality of cotton by distribution and multiplication of hybrid quality of cotton-seeds, popularly known as "shanker-4" cotton, agricultural co-operative societies of cotton growers were recommended to be formed. Accordingly, the assessee-society was registered under the Bombay Co-operative Societies Act, 1925, inter alia, for the objects specified in clause 2 of its bye-laws all of which need not be referred to. THE relevant objects material for purposes of this reference are as specified in clauses 2, 5 and 9. THE said objects, when translated into English, read as under : " 2. To purchase, sell, take on hire, or for use, for the society, raw-goods, ready-goods, tools and machinery for the objects of the society, and to make necessary arrangement for godowns and sale centres for the said purpose. 5. To produce, multiply and sell Shanker-4 cotton-seeds for the use of the members of the society as well as non-members. 9. To obtain loans for production, multiplication and sale of the seeds, and for achieving the objects of the society. "

(3.) THE assessee-society, therefore, carried the matter in second appeal before the Gujarat Sales Tax Tribunal. It was urged before the Tribunal on behalf of the assessee-society that at no stage of sale and supply the cotton-seeds received though all the transactions were routed through it. THE assessee, therefore, could not have been treated as a dealer under the Gujarat Act. THE Tribunal did not agree with this contention and confirmed the order of the sales tax authorities that the assessee-society was rightly held to be a dealer under the Gujarat Act. THE Tribunal, however, removed the penalties imposed under section 45 (2) (c) and section 45 (6) of the Gujarat Act by the sale tax authority. It is in this backdrop that the question set out above has been referred to us for our opinion.