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R.B.N.S. Borawake Vs. the State of Bombay - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtMumbai High Court
Decided On
Case NumberSales Tax References Nos. 25, 26 and 27 of 1958
Judge
Reported in[1960]11STC8(Bom)
ActsBombay Sales Tax Act, 1953 - Sections 2(6); Indian Income-tax Act, 1956; Sales Tax Act
AppellantR.B.N.S. Borawake
RespondentThe State of Bombay
Appellant AdvocateJ.P. Pandit, Adv.
Respondent AdvocateM.J. Mistree, Adv.
Excerpt:
- .....to the definition which provides that an agriculturist who sells exclusively agricultural produce grown on land cultivated by him personally shall not be deemed to be a dealer within the meaning of the clause. an 'agriculturist' is defined in section 2(2) of the act as meaning a person who cultivates land personally. that the assessee is cultivating the land personally is undisputed. he is therefore an agriculturist. he is also selling his agricultural produce but because of the circumstances that one of the items of his agricultural produce, viz., sugar-cane, is converted into gur for the purpose of transportation and preventing deterioration, it is urged on behalf of the revenue that the assessee is a dealer within the meaning of the definition. it is true that gur cannot be.....
Judgment:

Shah, J.

1. The assessee is carrying on agricultural operations on a very large scale. In his field he produces sugar-cane, ground-nut, til, cotton, kardi, onion, wheat, tobacco and fruits. He sells the produce at the two offices maintained by him one at Kopargaon and the other at Shrirampur in the district of Ahmednagar. As the sugar-cane cannot after cutting be kept without deterioration for a long time, he extracts juice and prepares gur out of it and sells it at his office. The question which arose before the Sales Tax Authorities was whether he is, in the circumstances, a dealer within the meaning of section 2(6) of the Bombay Sales Tax Act, 1953.

2. The expression 'dealer', so far as it is material, is defined by section 2(6) of the Bombay Sales Tax Act as meaning any person who carries on business of selling goods in the State of Bombay whether for commission, remuneration or otherwise. That definition is followed by an explanation which is not material for the purpose of this case. There is an exception to the definition which provides that an agriculturist who sells exclusively agricultural produce grown on land cultivated by him personally shall not be deemed to be a dealer within the meaning of the clause. An 'agriculturist' is defined in section 2(2) of the Act as meaning a person who cultivates land personally. That the assessee is cultivating the land personally is undisputed. He is therefore an agriculturist. He is also selling his agricultural produce but because of the circumstances that one of the items of his agricultural produce, viz., sugar-cane, is converted into gur for the purpose of transportation and preventing deterioration, it is urged on behalf of the revenue that the assessee is a dealer within the meaning of the definition. It is true that gur cannot be regarded as an agricultural produce grown on land. But if gur is prepared out of the agricultural produce which is grown on land, in the absence of any indication to the contrary suggesting that the agricultural produce must be sold in the form in which it is grown, we will we justified in holding that an agriculturist who is exclusively selling agricultural produce grown on the land either in the form in which it is grown or in the form in which it is converted for the purpose of transportation or preventing deterioration is within the exception provided by section 2(6). In the present case, with a view to prevent deterioration and for the purpose of facilitating transportation the assessee converted the sugar-cane grown by him into gur and sold it. In our view, the taxing authorities and the Sales Tax Tribunal were in error in holding that the assessee is a dealer within the meaning of the definition in section 2(6).

3. The Tribunal has submitted the following question for determination :-

'Whether on the facts and in the circumstances of this case the applicant can be held to be an agriculturist falling within the exception to sub-section (6) of section 2 of the Act of 1953 ?'

4. But it is not disputed that the assessee is an agriculturist within the meaning of the Act; and section 2(6) does not define an agriculturist. The question in our judgment does not bring out the real matter in dispute between the taxing authorities and the assessee. We therefore reframe the question as follows :-

'Whether on the facts and in the circumstances of the case, the applicant can be regarded as a dealer within the meaning of section 2(6) of the Bombay Sales Tax Act, 1953 ?'

5. To the reframed question, our answer for reasons already set out will be in the negative.

6. The State to pay the costs of the assessee.

7. There will be only one set of costs in these three references.

8. References answered accordingly.


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