1. This petition by the Deputy Commissioner of Sales Tax, South Zone, Quilon, is directed against the decision of the Sales lax Appellate Tribunal, Trivandrum, in Tribunal Appeal No. 428 of 1962. That decision is tothe effect that the respondent, the Travancore Rubber and Tea Company Limited, Alleppey, is not a dealer as defined in Section 2(b) of the Central Sales Tax Act, 1956, In respect of its sales of rubber and that those sales arenot as a result liable to taxation under the said enactment.
2. The definition of the expression 'dealer' as given in Section 2(b) of the Act reads as follows :
' 'dealer' means any person who carries on the business of buying or selling goods and includes a Government which carries on such business',
It is common ground that all that the company does is to convert the latex tapped from its rubber trees into sheets and effect a sale of those sheets to its customers. The sole question for determination is whether in these circumstances the company can be considered to be a person who carries on the business of selling goods.
3. Latex is an opaque liquid resembling milk. It is not disputed thit the usual method of selling it is after converting it into sheets, and that the conversion is not a manufacturing process but a process essential for the transport and marketing of the produce concerned.
4. We take the view that an agriculturist selling his own produce either as gathered or after subjecting it to the minimum requirements necessary for transport and marketing cannot be considered to be a person engaged in the business of selling. The sale which he effects, aswe see it, is only the culmination of his agricultural operations; it is not separate and distinct from his agriculturalavocation; and he cannot be considered to be a person carrying on a business of selling simply because he effects a sale of his own agricultural produce.
5. In Konduri Buchirajalingam v. Slate of Hyderabad, 1958-9 STC 397 : (AIR 1958 SC 756) the Supreme Court had to deal with the definition of turnover in the Hyderabad Gdneral Sales Tax Act, 1950, as it stood prior to ths amendment by the Hyderabad General Sales Tax (Amendment) Act, 1953. The definition before the amendment read as follows :
' 'turnover' means the aggregate amount for which goods are either bought by or sold by a dealer, whether for cash or for deferred payment or other valuable consideration'.
The Supreme Court said that the definition showed that turnover 'only refers to the turnover of a dealer and not of an agriculturist'. The definition of dealer embodied In the Hyderabad General Sales Tax Act, 1950 -- Section 2(e) is in essential particulars the same as the definition of that expression in the Central Sales Tax Act, 1956. The definition in the Hyderabad Act reads as follows:--
' 'dealer' means any person, local authority, company, firm, Hindu undivided family or any association or associations of persons engaged in the business of buying, selling or supplying goods in the Hyderabad State whether for a commission, remuneration or otherwise and includes a State Government which carries on such business and any society, club or association which buys or sells or supplies goods to its members'.
6. The view we have taken is the samei as the view taken by Velu Pillai, J., in Muhammed v. Sales Tax Officer, Kozhikode, 1962-13 STC 54 (Ker). The relevant considerations are discussed at lengtfi in that decision and it is unnecessary to go over the ground afresh in any greater detail.
7. List II (State List) in the Seventh Schedule to the Constitution deals with agricultural income and sales tax separately. Item 46 of that List is :
'Taxes on agricultural income';
and itam 54 is :
'Taxes on the sale or purchase of goods other than newspapers, subject to the provisions of Entry 92 A of List I.'
Item 92-A of List 1 (Union List) is:
'Taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce'.
These entries give an indication of the scheme of Indian taxation and afford soms support to the conclusion we have reached.
8. Counsel for the respondent suggested that the proceeds of the sale of the rubber sheets constitute agricultural income and any taxation thereof by the Central legislature will be ultra vires of the Constitution. In view of our conclusion that the respondent is not a dealer as defined in Section 2(b) of the Central Sales Tax Act, 1956, it is not necessary to evaluate this contention and It is not considered in this judgment.
9. The learned Advocate-General cited before us certain cases under the Indian Income-tax Act, 1922, cases like Ponnuswami Pillai v. Commr, of Income-tax Madras, 3 ITC 378 (Mad). Those cases are of no assistance in deciding the question with which we are concerned. All that they say is that income derived from agricultural lands situate in a foreign State would fall outside the definition of 'agricultural income' in Section 2 (1) of the Indian Income-tax Act, 1922, corresponding to Section 2(1) of the Income-tax Act, 1961, and that the entire income from purely agricultural operations as well as from manufacture would be taxable as an income from business.
10. In the light of what is stated above the T. R.C. has to be dismissed and we do so. In the circumstances of the case, however, there will be no order as to costs.