Full Judgment Text
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PETITIONER:
DY. COMMISSIONER OF AGRICULTURAL INCOME TAX,AND SALES TAX,
Vs.
RESPONDENT:
M/S. PALAMPADAM PLANTATIONS LTD., KOTTAYAM
DATE OF JUDGMENT:
12/02/1969
BENCH:
GROVER, A.N.
BENCH:
GROVER, A.N.
SHAH, J.C.
RAMASWAMI, V.
CITATION:
1969 AIR 930 1969 SCR (3) 674
1969 SCC (1) 662
CITATOR INFO :
RF 1989 SC 945 (13)
ACT:
Kerala General Sales Tax Act (Kerala 15 of 1963), s.
2(viii)--Dealer-Trees of spontaneous growth in private
forest-If ’produced’ by owner of forest-’Produced’, meaning
of.
HEADNOTE:
Where a person owns and maintains a private forest and sells
trees of spontaneous growth therein but does not do anything
towards the production of the trees or their uprooting, he
is not a ’dealer’ within the meaning of s. 2(viii) of the
Kerala General Sales Tax Act, 1963. In order to fall within
the definition, a person must sell goods produced by him by
manufacture, agriculture, horticulture or otherwise. The
intention of the Legislature in using the word ’produced’
was to introduce an element of volition and effort involving
the employment of some process for bringing into existence
the goods. Trees which have grown spontaneously without any
plantation by a person cannot be said to have been produced
by him by agriculture or horticulture or ’otherwise’, since
the element of ’production is not present. [675 H; 676 A-B,
C-D]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1058 of
1967.
Appeal by special leave from the order dated September 15,
1966 of the Kerala High Court in Tax Revision Case No. 106
of 1966.
M. R. Krishna Pillai, for the appellant.
The respondent did not appear.
The Judgment of the Court was delivered by
Grover, J. This is an appeal by special leave from a
judgment of the Kerala High Court dismissing in limine a
revision petition directed against the order of the Sales
Tax Appellate Tribunal dated April 15, 1966 by which it was
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held that the respondent company was not a "dealer" within
the meaning of s. 2(viii) of the Kerala General Sales Tax
Act 1963 (Act 15 of 1963) hereinafter called the "Act".
The respondent sold trees of spontaneous growth in its
estate for Rs. 50,000 during the assessment year 1963-64.
The assessing authority levied sales tax by treating the
aforesaid amount as taxable turnover under the Act. In
appeal the Appellate Assistant Commissioner confirmed that
order. Before the Appellate Tribunal it was common ground
that the trees sold were of spontaneous growth. The
Tribunal did not accede to the contention
675
of the State representative that under the contract, by the
process of uprooting the trees, the respondent produced
timber and would be covered by the definition of a "dealer"
contained in s. 2(viii) of the Act. It was held that
uprooting of the trees was not being done by the respondent
and no process had been employed by which it could be said
that timber had been produced by it. The appellant herein
filed a petition before the High Court raising the following
questions of law :
"(1) Whether on the facts and in the
circumstances of this case, a person owning
and maintaining private forest and selling_
trees of spontaneous growth therein, is a
’dealer’ within the meaning of section 2(viii)
of the Kerala General Sales Tax Act, 1963 ?
(2) Whether such a person is liable to the
levy of sales-tax respect of sales of his
timber, under the said Act ?"
As mentioned before the High Court rejected the petition for
revision at the preliminary hearing.
The sole question is whether on the findings given by the
Appellate Tribunal the respondent can be regarded as a
"dealer" within the definition given in s. 2 (viii).
According to that definition "dealer" means any person who
carried on the business of buying, selling, supplying or
distributing goods directly or otherwise whether for cash or
for deferred payment or for commission, remuneration or
other valuable consideration and includes...... (e) a person
who sells goods produced by him by manufacture, agriculture,
horticulture or otherwise.
It has been contended before us by learned counsel for the
appellant that the Appellate Tribunal erred in assuming that
any agricultural, horticultural or other process was
involved in producing the timber sold. The basic question
it is said, was whether maintenance of a private forest with
a view to producing and selling valuable timber with the
usual attributes of business present in the said activity,
namely, periodicity, continuity and profit motive would
amount to such process. The other question *as whether the
said activity i.e., forestry would not come within the scope
of "agriculture, horticulture or otherwise" particularly
when the respondent owns substantial area of forest land,
and timber from the trees of spontaneous growth is sold year
after year with the object of earning profit.
Now in order to fall within the definition of "dealer’ a
person must sell goods produced by him by manufacture,
agriculture,
676
horticulture or otherwise. Such trees which have grown
spontaneously and without any plantation by that person
cannot possibly be regarded as having been produced by him
by agriculture or horticulture. The word "otherwise" also
cannot cover trees of spontaneous growth since the element
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of production must be present. The context in which the
word "produced" appears in the definition can only mean "to
bring forth, bring into being or existence-to bring (a
thing) into existence from its raw materials or elements :"
(See the meaning of the word ",produce-" in the Shorter
Oxford English Dictionary). According to Websters’
International English Dictionary the verb "produce" means to
bring forward, beget etc. The juxtaposition of the word
"manufacture" with "agriculture" and "horticulture" is
significant and cannot be lost sight of. The intention in
employing the word "produced" obviously was to introduce an
element of volition and effort involving the employment of
some process for bringing into existence the goods. The
respondent in the present case has not been found to have
done anything towards the production of the trees and even
the cutting has been done by the contractor. The respondent
therefore cannot possibly be regarded as a person who sells
goods produced by him by agriculture, horticulture or other-
wise.
On the above view of the matter the appeal fails and is dis-
missed. As there is no appearance on behalf of the
respondent there will be no order as to costs in this Court.
V.P.S. Appeal dismissed.
777