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Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes) Vs. Kalpana Krishna Mohan - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtKerala High Court
Decided On
Case NumberT.R.C. Nos. 60, 107, 108, 109 and 117 of 1981 and 34, 37, 55 and 56 of 1982
Judge
Reported in[1985]59STC316(Ker)
AppellantDeputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes)
RespondentKalpana Krishna Mohan
Appellant AdvocateGovernment Pleader
Respondent Advocate T.L. Viswanatha Iyer, Adv.
DispositionPetition dismissed
Cases ReferredDeputy Commissioner v. Tirumbadi Rubber Co.
Excerpt:
- .....thereto.5. as for clause (e) of section 2(viii), its language is clear on the point that only sales of goods produced by a seller (by way of manufacture, agriculture, horticulture or otherwise) could bring him within the meaning of 'dealer' as defined in the sub-section. how can any one say that the mere cutting of a tree growing spontaneously would amount to production of goods by manufacture, agriculture or otherwise cutting is the final act in converting standing trees into 'goods'; and such a final act alone, without planting, nurturing and engaging in other activities antecedent thereto cannot be characterised as production of trees or timber by the cutter. the position may be different, for example, when a person plants teak or other trees and cuts them for being sold as poles.....
Judgment:

M.P. Menon, J.

1. The only question in these revisions is whether shade trees cut and sold as timber or firewood by owners of coffee and other plantations is exigible to tax under the Kerala General Sales Tax Act.

2. In Manager, Pulpally Devaswom v. State of Kerala [1977] 40 STC 350 this Court held that turnover in regard to such trees of spontaneous growth could not be taxed because :--

(i) to bring 'occasional transactions' within the meaning of Section 2(vii), they should be transactions of a business nature ; and

(ii) to bring them under Section 2(viii)(e), the sales should be of goods produced by the seller.

The Sales Tax Appellate Tribunal has only followed the above view of this Court, and we are unable to hold that the orders under revision are erroneous.

3. Counsel for the Revenue contends that the decision in Pulpally Devaswom [1977] 40 STC 350 is opposed to the view taken earlier by this Court in the Kottamullai Tea Co. case [1975] 36 STC 499 (App) (T. R. C. Nos. 64 and 65 of 1971) and in T. R. C. No. 34 of 1973. We cannot agree. The question in the above cases was whether in view of the definitions in Section 2(vii) and Section 2(viii)(e) of the Kerala Act, the term 'dealer' should be understood to denote only a person normally engaged in the business of selling and buying. And this Court held that even a person engaging in casual transactions could be regarded as a dealer in view of the wider language. The two questions specifically considered in Pulpally [1977] 40 STC 350 and noticed in the preceding paragraph were not separately examined in those cases.

4. It is not disputed that at the material time, 'occasional transactions of a business nature' alone were comprehended by the definition of 'casual trader' in Section 2(vii). Therefore, the transaction had to be a business transaction, i. e., 'an adventure in the nature of trade or commerce', before the person responsible for it could be treated as a 'casual trader', and consequently, a 'dealer'. This view taken in the Pulpally case [1977] 40 STC 350 is in fact supported by the earlier decision of another Bench in Deputy Commissioner v. Tirumbadi Rubber Co. [1975] 36 STC 492. We are in respectful agreement with the above view, and we see nothing in Kottamullai Tea Co. [1975] 36 STC 499 (App) (T. R. C. Nos. 64 and 65 of 1971) or in T. R. C. No. 34 of 1973 contrary thereto.

5. As for Clause (e) of Section 2(viii), its language is clear on the point that only sales of goods produced by a seller (by way of manufacture, agriculture, horticulture or otherwise) could bring him within the meaning of 'dealer' as defined in the sub-section. How can any one say that the mere cutting of a tree growing spontaneously would amount to production of goods by manufacture, agriculture or otherwise Cutting is the final act in converting standing trees into 'goods'; and such a final act alone, without planting, nurturing and engaging in other activities antecedent thereto cannot be characterised as production of trees or timber by the cutter. The position may be different, for example, when a person plants teak or other trees and cuts them for being sold as poles or as timber, because the trees or timber could then be regarded as goods produced by him, but the same cannot be said about the mere cutting of trees of spontaneous growth. Again, we are in respectful agreement with the approach made in Pulpally [1977] 40 STC 350 on this aspect. The distinction between trees only planted and trees of spontaneous growth was not considered in Kottamullai Tea Co. [1975] 36 STC 499 (App) (T. R. C. Nos. 64 and 65 of 1971) or T. R. C. No. 34 of 1973; apparently, the point was not argued. A conflict requiring resolution by a larger Bench is not involved on this point also.

6. To satisfy the element of 'sale' as understood in explanation (1) to Section 2(xxi) also, the timber must be produced by the seller. What has been said in connection with Section 2(viii)(e) applies equally to the aforesaid explanation.

7. All that is necessary to add is that we have not taken into account the amendments made to Section 2(vii) and Section 2(viii)(e) by Act 19 of 1980 and Act 21 of 1978 respectively, because the transactions involved in these revisions were of earlier years.

The revisions are accordingly dismissed, but without any order as to costs.


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