KHEDUT SAHAKARI GINNING & PRESSING SOCIETYLTD. vs STATE OF GUJARAT

The Supreme Court ruled that the appellant cooperative society, registered under the Bombay Cooperative Societies Act, 1925, did not purchase cotton and cotton seeds from its members for sale, but acted as their agent. The Court held that the society's bye-laws indicated it was formed to sell the collective produce of its members, thus exempting it from purchase tax under the Bombay Sales Tax Act, 1959. The Assistant Commissioner's notice was quashed, affirming that the society was not liable for purchase tax as it did not engage in purchasing goods for resale.