An Agricultural Service Society distributing fertilizers and seeds among its members without engaging in the sale of fertilizers is not required to register under the Fertiliser (Control) Order, 1985.

A.L.Bahri and N.K.Kapoor JJ.

1. Short question for consideration of this writ petition is as to whether the petitioner which is Agriculture Service Society sells fertilizers to its members on price of distribute the same to them. If the answer is in affirmative, obviously, the petitioner Society is required to get registration under the Fertiliser (Control) Order, 1985 , Clause 7. If the answer is otherwise, no such registration is required. Rule 7 of the Fertiliser (Control) Order, 1985 reads as under:-

"7. Dealers to be registered- No person, including a manufacturer, a pool handling agency, a wholesale dealer, a retail dealer and an Industrial dealer shall offer for sale or carry on the business of selling fertilizers at any place except under and in accordance with the terms and conditions of a certificate of registration granted to him under Clause 9. Provided that a State Government may, by notification in the Official Gazette, except from the provisions of this clause any person selling fertilisers to farmers in such areas and subject to such conditions as may be specified in that notification."

2. A perusal of the aforesaid provision would show that it is a sale of fertilizers which is controlled by the provisions either by the manufacturer, a pool handling agency, a wholesale dealer, a retail dealer and an Industrial dealer. As per stand taken by the respondents in the written statement, the petitioner Society would be a retail dealer. After purchasing the fertiliser from wholesale dealer, the Society would be selling the fertilisers on price to its members and then the registration is required. This stand of the respondents in the facts of the present case, cannot be accepted. The purpose to form a agricultural Cooperative Society is not to help its members in the matter of sale or purchase of agriculture produces. Since the present Society is Agriculture Service Society and the purpose mentioned in the writ petition for which the Society is formed, is to arrange fertilizers and seeds for its members; it is inherent that these members would be joining hands and making bulk purchases from the wholesale dealer and then distributing among themselves. It is well known that such farmers get loans from the Societies for making such purchases also. If members of the Agricultural Society distribute among themselves such supplies of fertilisers and seeds, it must be said that the Society is not selling such articles to them. Such a matter earlier came up in The Joint Commercial Tax Officer v. Young Mens Indian Association,1 (1970) 26 S.T.C. 241 (S.C.), a case of members of a club, a registered Society, distributing articles purchased, it was held that no transaction of sale was involved in the supply of refreshments and preparations by each one of them to its members and no tax (Sales Tax) could be levied. The ratio of the aforesaid decision would squarely cover the case in hand. Rather proviso added to Rule 7 as reproduced above, further gives an indication that even retail dealers who are selling the fertilisers in open market can also be exempted if they are selling fertilisers to the farmers. The decision we have taken is in consonance with the provisions of the rule aforesaid and that the petitioner Society is of the farmers and the purpose is to purchase fertilisers and seeds and then distribute among the members/farmers. There is no transfer of property from one to another, there is no sale. In the case of members of Agricultural Co-operative primary Society, even though it has a distinct legal entity, it acts only as an agent for its members in the manner of supply of various fertilisers and seeds to its members so that no sale is involved. There is no element of transfer. The position would have been different if the petitioner Society had been doing the business of sale of fertilisers and seeds in open market as one of its functions.

3. For the reasons recorded above, this writ petition is allowed, quashing