Partnership firm purchases from partners can attract purchase tax when goods are sold for value, not contributed as capital.

A partnership firm is treated as a distinct taxable entity from its partners under the Gujarat Sales Tax Act, 1969, and the Act contains no exception preventing the firm from buying goods from partners. Where groundnut seeds were sold by partners to the firm at market price and the consideration was credited to their accounts, the transaction was a purchase by the firm rather than a capital contribution. Because purchase tax under section 15 applies to taxable goods bought from an unregistered dealer and not resold, the value of the seeds was rightly subjected to purchase tax against the assessee.

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Issues: Whether groundnut seeds brought by partners into a partnership firm could be treated as purchases by the firm for the purpose of purchase tax under the Gujarat Sales Tax Act, 1969.

Analysis: The statutory definitions of "person", "dealer", "sale", and "goods" show that a firm is included within the expression "person" and can itself be a dealer and a registered dealer. The scheme of the Act treats the firm as a distinct assessable entity, and section 15 fastens purchase tax where a dealer purchases taxable goods from a person who is not a registered dealer, unless the goods are resold. The Act does not create any exception where the seller happens to be a partner of the firm. The Court distinguished authorities dealing with contribution of assets as capital to a partnership, holding that those cases did not govern a transaction where goods were sold by partners to an existing firm at market price and the consideration was credited in the partners' accounts. For sales tax purposes, there was no legal prohibition on a firm purchasing goods from its partners.

Conclusion: The value of groundnut seeds was rightly treated as purchases by the firm from its partners, and purchase tax was leviable. The reference was answered against the assessee and in favour of the Revenue.

Ratio Decidendi: For the purposes of sales tax, a partnership firm is a distinct legal entity from its partners, and a purchase by the firm from its partners is taxable under the purchase tax provision when the partners are unregistered dealers and the goods are not brought in merely as capital contribution.

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