FOOD CORPORATION OF INDIA ETC. ETC. vs STATE OF KERALA

The Supreme Court addressed the liability of the Food Corporation of India (FCI) to pay sales/purchase tax while purchasing foodgrains under the Essential Commodities Act, 1955. The Court held that the FCI is not liable to pay such tax, overruling the previous decision in M/s Chitter Mal Narain Das vs. Commissioner of Sales Tax (1970 (3) SCC 809) based on subsequent larger bench rulings. The judgment clarified that the definition of 'sale' under Section 2(h) of the U.P. Sales Tax Act, 1948 does not apply to FCI's transactions, thus resolving conflicting views among various High Courts.