STATE OF GUJARAT vs M/S. ANANTA MILLS LTD.

The Supreme Court held that the respondent was entitled to a refund of purchase tax paid on unginned cotton under Rule 12(i) of the Bombay Sales Tax (Exemption, Set-off and Composition) Rules, 1954. The Court clarified that the requirement under Rule 12(i) is satisfied if the goods are actually used for the specified purpose of production for sale, which in this case was the production of cotton seeds. The High Court's decision to allow the refund was upheld, affirming that the incidental product's sale does not negate the entitlement to refund.