1. These appeals are by one and the same assessee and are directed against two different but identical orders made by the Commissioner of Commercial Taxes, Karnataka, Bangalore (Commissioner), on 10th December, 1976, and 15th December, 1976, revising the orders of the appellate authority and restoring the orders of the assessing authority made under the Karnataka Sales Tax Act of 1957 ('the Act').
2. M/s. Cochin Malabar Estate Limited, Cochin, a public limited company incorporated under the Companies Act, inter alia, owned certain rubber estates in the District of Coorg. Under two separate but identical agreements, the assessee purchased the rubber trees standing on the estates for valuable consideration for 'slaughter-tapping' them or cut and remove the trees, extract the available natural rubber or 'latex' and sell both of them. We are concerned in these cases only with 'latex' extracted by the assessee from the trees and sold and its exigibility to tax under the Act.
3. In assessment or/reassessment proceedings under the Act, the Commercial Tax Officer, Mercara, brought the sale of 'latex' by the assessee to tax under Act. On appeals filed by the assessee against the order of the Commercial Tax Officer, the Deputy Commissioner of Commercial taxes, Mangalore, allowed the said appeals. In exercise of the suo motu power of revision conferred by section 22-A of the Act, the Commissioner, overruling the objections of the assessee, has revised the orders of the Deputy Commissioner and has restored the orders of the Commercial Tax Officer. Hence, these appeals by the assessee under section 24 of the Act.
4. In Mohamed Samiullah v. Commissioner of Commercial Taxes : ILR1985KAR481 , a Full Bench of this Court has upheld the validity of section 22-A of the Act and the power of the Commissioner to revise the orders of the Deputy Commissioner. Sri G. Sarangan, learned counsel for the assessee, did not rightly urge those questions that are concluded in Mohd. Samiullah's case : ILR1985KAR481 .
5. Sri Sarangan contends that sale proceeds realised by the assessee from sale of 'latex' derived from 'slaughter-tapping' of rubber trees, was agricultural income and was not exigible to sales tax under the Act. In support of his contention Sri Sarangan strongly relies on a ruling rendered by Venkatadri, J., of the Madras High Court in K. M. Jamal Mydeen v. State of Madras  22 STC 45.
6. Sri S. Rajendra Babu, learned Government Advocate appearing for the revenue, sought to support the orders of the Commissioner.
7. On a critical examination of the agreements, the nature of the transactions and the relevant provisions of the Act, the Commissioner relying on certain rulings of the Madras and Kerala High Courts, to which we will also refer later, has found that the sale proceeds from 'latex' were sales exigible to sales tax under the Act. We are of the view that the reasoning and conclusion of the Commissioner and the Commercial Tax Officer are sound and do not suffer from any error on facts or law.
8. The rights of the assessee and the nature of transactions must be decided with reference to the agreements entered into by him with the owner of the lands.
9. Admittedly, the assessee was not the owner of lands. Under the agreements the assessee secured the right to cut and remove the rubber trees, extract 'latex' available from them and sell the same in open market to others which he did. The agreements were not agreement for lease of lands or deeds of lease. When that is so, there is hardly any ground to differ from the conclusion reached by the Commissioner and the Commercial Tax Officer.
10. In C.P.A. Yoosuf v. Income-tax Officer, Kottayam : 77ITR237(Ker) , Isaac, J., construing a similar agreement has expressed thus :
'........... The income derived by a person by sale of rubber obtained by slaughter-tapping trees, which he has purchased for being cut and removed is not income derived in any such manner; and it does not, therefore, fall within the definition of 'agricultural income'.
............ On the other hand, the income is derived under contracts of sale entered into between the petitioner and other planters. Such an income is clearly non-agricultural.'
We are in respectful agreement with these views of Isaac, J.
11. In Sudershan and Company v. State of Karnataka : ILR1985KAR661 in somewhat similar circumstances of tapping toddy and its sale, we have held that the same was a sale exigible to sales tax under the Act. We are of the view that on the ratio in Sudershan & Co.'s case : ILR1985KAR661 , the conclusion of the Commissioner and the Commercial Tax Officer is unexceptionable.
12. In Deputy Commissioner of Commercial Taxes, Madurai Division, Madurai v. M. R. R. M. S. Palaniappan & Co.  31 STC 387 a Division Bench of the Madras High Court dissenting from the view expressed by Venkatadri, J., in Jamal Mydeen's case  22 STC 45 has followed the view expressed by Ramaprasada Rao, J., (as his Lordship then was), of the same High Court in P. V. Palaniappa Pillai v. Deputy Commercial Tax Officer, Melur  28 STC 502. We are of the view that for the reasons expressed by the Division Bench in Palaniappan & Co.'s case  31 STC 387 with which we are in respectful agreement, we find it difficult to subscribe to the views expressed by Venkatadri, J., in Jamal Mydeen's case  22 STC 45.
13. On the foregoing discussion, it follows that the under contracts of sale, the assessee extracted 'latex' and sold the same to others which on any view cannot be treated as 'agricultural income' but has to be treated only as sales exigible to tax under the Act. On this view, we do not consider it necessary to examine the scope and ambit of the definitions occurring in section 2(1)(a), (b), (c), (i) and (j) and the explanation to section 2(1)(k) of the Act relied on by Sri Sarangan and express our views.
14. As the only contention urged for the assessee fails, these appeals are liable to be dismissed. We, therefore, dismiss these appeals. But, in the circumstances of the cases, we direct the parties to bear their own costs.