Co-operative society treated as a dealer where it controlled materials, arranged sales, and carried on business in its own right.

A co-operative society was treated as a dealer under section 2(c) of the Orissa Sales Tax Act because it bought yarn and other raw materials on its own responsibility, supplied them to member-weavers for conversion, retained legal control over the materials and finished goods until sale, and conducted the sales itself. Its status as a society with proceeds later distributed among members did not alter the character of the transactions, since it remained a separate legal entity carrying on its own business. The absence of profit retention by the society was immaterial once the sales were shown to be its own business transactions.

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Issues: Whether the petitioner-society was a "dealer" within the meaning of section 2(c) of the Orissa Sales Tax Act, 1947 and liable to be assessed to sales tax on the transactions in question.

Analysis: The society purchased yarn and other raw materials on its own responsibility, supplied them to member-weavers for conversion, retained legal control over the materials and finished goods until sale, and arranged and carried on the sales itself. The fact that the society was composed of members and that the sale proceeds were ultimately distributed among them did not alter the character of the transactions, because the society was a distinct legal entity and the relevant business of selling goods belonged to it. The absence of retention of profit by the society was immaterial once the sales were shown to be its own business transactions.

Conclusion: The petitioner-society was a dealer within section 2(c) and the answer to the reference was against the assessee and in favour of the Revenue.

Final Conclusion: The reference was answered affirmatively on the statutory question, sustaining the assessment of the society as a dealer under the Act.

Ratio Decidendi: A co-operative society is a dealer where, as a separate legal entity, it carries on and ls the business of selling goods in its own right, even if the members manufacture the goods and the sale proceeds are later distributed among them.

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