Govindan Nair, C.J. - These tax revision cases cam be grouped under two heads, those taken by the revenue and those filed by the two assessees, Tirumbadi Rubber Company, Coimbatore, and M/s. Cochin Malabar Estates Ltd., Coimbatore. The tax revision cases taken by the revenue are 5, 6, 7, 8, 9, 10, 11, 14, 15 and 16 of 1974 and those by the two assessees are 12, 13, 18, 19, 20, 21, and 22 of 1974, These cases relate to the assessment years 1962-63 to 1965-66.
2. The question raised by the revenue is that the Tribunal erred in exonerating from tax the turnover pertaining to fallen rubber trees, twigs, empty barrels, scrap and so forth. We shall first deal with the batch of cases wherein this question has been raised. The relevant parts of the Tribunals order pertaining to this aspect reads as follows :
'The turnover assessed in the years under appeal admittedly represented sales proceeds of fallen rubber trees, twigs, empty barrels, scraps, etc. of these it is not clear whether the scrap is scrap rubber. If what is sold id scrap rubber we feel that the turnover of such scrap is assessable in the hands of the appellant-company as it is one of the products dealt by in by them. But the fallen trees, twigs, empty barrels and such other items are unserviceable goods as far as the business of the company is concerned and an attempt on their part to realise a price by sale of such goods does not necessarily lead to an inference that they intended to carry on business in these goods. Therefore, applying the dictum laid down by the Supreme Court in State of Gujarat vs. Raipur . We find that turnover in question as stated above for the different years are not liable to tax in the hands of the appellant-company, subject of course excluding the part, if any, relating to sales of scrap rubber. We may also state here that the rubber trees are fixed assets of the company and we find no provision in the Kerala General Sales Tax Act, 1963, to bring to tax the sale price of a part or whole of the fixed assets of the assessee. This point will elaborately considered while dealing with the question of assessability or otherwise of the amounts received by the company towards sale value of rubber trees during the year 1964-65.
'The third contention raised on behalf of the appellant-company is regarding the inclusion of the sale value of old rubber trees in the taxable turnover for 1964-65. During the year the company received trees in the taxable turnover for 1964-65. During the year the company received a sum of Rs. 1,27,597.95 towards the sale value of old rubber trees. According to the learned Advocate, the above amount is not taxable. In the first place, he contends that the company in not a dealer in rubber trees. He relies on the decision of the Supreme Court reported in State of Gujarat vs. Raipur . in support of his contention. When the rubber trees were planted long ago it was not the intention of the company to cut and sell them on any particular date. When the trees became old and uneconomic they had to be removed and the area replanted with new rubber plants. From these circumstances, it is contended that with new rubber plants. From these circumstances, it is contended that an intention on the part of the assessee-company to do business in the sale of rubber trees cannot be spelt and that therefore the amount realised by the company towards value of rubber trees allowed to be removed with roots from the estate cannot be treated as turnover liable to tax under the Act. Alternatively, it is also contended that rubber tree is not timber and that hence explanation 1 to section 2 (xxvii) of the Kerala General Sales Tax Act will not be attracted in regard to the transactions in question. Still another alternate contention is that the rubber trees sold to the various parties as per the agreements to cut and remove with roots form part of the land and hence only a part of the fixed assets of the company. Hence according to him the sales are not exigible to tax under the Kerala General Sales Tax Act, 1963. The goods sold are old and uneconomic rubber trees and they are admittedly part of the fixed assets of the appellant-company. It is also a fact that the sales of these trees are only once in their lifetime viz., when they become old, unserviceable and uneconomic. We are unable to hold that in disposing of such old and uneconomic trees, the company was carrying on business of selling such trees. These sales were frequent and the volume was large but it cannot be presumed that when the trees were planted there was an intention to carry on the business of sales of these trees not are these trees by-products or subsidiary products arising in the course of the business of the company. The trees are part of the fixed assets of the company. They are of course sold by the company for a price which goes into the profit and loss account of the business and may indirectly reduce the cost of production of the items dealt in by the company, but on that account it cannot be said top become part of the business of selling latex and other products produced by the company. In order that receipts from sale of a commodity may be included in the taxable turnover, it must be established that the assessee was carrying on business in that particular commodity and to prove that fact it must be established that the assessee had an intention to carry on the business in that commodity. A person who sells goods which are old, uneconomic, unserviceable and unsuitable for his business, does not on that account become a dealer in those goods. Hence we find that the appellant-company cannot be assessed on the sale value of the rubber trees for the year 1964-65 on both counts viz., that the appellant-company is not a dealer in rubber trees and that the trees are part of their fixed assets. In view of our above finding, we do not find it necessary to go into the question whether rubber trees are timber.'
3. The counsel for the revenue relied on the amendments that have been effected to the Kerala General Sales Tax Act, 1963, for short, Act to the definitions of the terms 'business' [section 2 (vi)], 'casual trader' [section 2 (vii)], 'dealer' [section 2 (vii)], 'sale' [section 2 (xxi)], 'turnover' [section 2 (xxvii)], and 'total turnover' [section 2 (xxvi)], read the amended definitions and contended that as the Act stood at the time of the various assessments (1962-63 to 1965-66), the two assessees were clearly 'dealers' within the meaning of that definition in section 2 (viii) of the Act and that therefore the turnover pertaining to the sale of the goods of the description already referred to was taxable. He relied on the decision this court in Deputy Commissioner of Agricultural Income-tax and Sales Tax vs. Kattamullai Tea Co. Ltd. which supports him fully.
4. The above argument has been met by the counsel for the assessee by relying of the decision of the Supreme Court in State of Tamil Nadu vs. Burmah Shell Oil Storage and Distributing Co. of India Ltd. The Supreme Court had therein to consider a statute (The Madras General Sales Tax Act, 1959), which contained the definition of the term 'casual trader' almost in very similar terms as that contained in the Act. Nevertheless, the Supreme Court took the view that the principle of the decision in State of Gujarat vs. Raipur . would apply for the period of the assessment year when the section defining business stood unamended. the section defining 'business' before and after the amendment read as follows :
After the 1961 and 1964 Amendment Acts
Section 2(d). 'business' includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce, manufacture, adventure or concern.'
Section 2(d). 'business' includes
(i) any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture, whether or not such trade trade, commerce, manufacture, adventure or concern is carried on with a motive to make gain or profit and whether or not any profit accrues from such trade, commerce, manufacture, adventure or concern; and
(ii) any transaction in connection with, or incidental or ancillary to, such trade commerce, manufacture, adventure or concern.'
For the period after the amendment to section 2 (d) by incorporating 2 (d) (ii), it was held that the transactions were taxable because of the widening of the term 'business' by the amendment.
5. It may be noted that the definition of the term 'dealer' in section 2 (viii) in the Kerala General Sales Tax Act, 1963, included a casual trade and a casual trader took within its ambit a person who has occasional transactions of a business nature involving the buying, selling, supply or distribution of goods in the State.
6. The Act does not contain a clause (ii) to section 2 (vi) of the Act defining 'business' similar to clause (ii) to section 2 (d) defining business in the Act (The Madras General Sales Tax Act, 1959), with which the Supreme Court was concerned. The counsel for the assessees therefore contended before us that the assessees in these cases cannot be said to be 'dealers' within the meaning of section 2(viii) of the Act. We think the assessees counsel is well-founded in this submission. The counsel for the revenue pointed out that this decision of the Supreme Court cannot be treated to be an authority for deciding the ambit of the definition of the term 'casual trader'. It was urged that the Supreme Court had not adverted to the definition of the term 'casual trader' at all and had expressed no opinion in regard to the question whether the definition of 'dealer', which included a casual trader got a wider meaning by such inclusion. He referred us to the judgment of the Madras High Court from which the appeal was taken and which appeal gave rise to the decision of the Supreme Court in State of Tamil Nadu vs. Burmah Shell Oil Storage and Distributing Co. of India Ltd., and invited our attention to a short paragraph, the last one in the judgment of the Madras High Court (Burmah Shell Oil Storage and Distributing Co. of India Ltd Madras vs. State of Madras), reading as follows :
'That the sales of scrap by the assessee is not liable to tax, is covered by the principle of out judgment in T.C. Nos. 170 and 213 of 1964 (Loyal Textile Mills Ltd. vs. State of Madras and so too canteen sales by our judgment in T.C. No. 152 of 1964 Deputy Commissioner of Commercial Taxes vs. Sri Thirumangal Mills Ltd.
The counsel then drew our attention to the decision in T.C. Nos. 170 and 213 of 1964, which is reported in Loyal Textile Mills Ltd. vs. State of Madras and stressed that there has been no discussion of the implications of the inclusion of a 'casual trader' within the definition of the term 'dealer'. He invited our attention to the relevant passage reading as follows :-
'The last item consists of sales of empty tins, dealwood boxes, hoop iron, tiles, cinder, etc. The assessee during the relevant years was a dealer in yarn and cotton. It was not its business to deal in goods like dealwood boxes, hoop iron, tiles etc. In the course of tis business it came by these goods which it had necessarily to dispose of. The intention in selling them was not to do business as such. This part of the turnover is covered by the principle in State of Gujarat vs. Raipur .'
The counsel therefore contended that one of the decisions relied on by the Madras High Court also was not of help. He then invited out attention to the other decision in T.C. No. 152 of 1964 relied on by the Madras High Court which is reported in Deputy Commissioner of Commercial Taxes, Coimbatore Division, Coimbatore vs. Sri Thirumagal Mills Ltd. In the judgment, Veeraswami, J., after referring to the definition of the term 'business' observed as follows :-
'In this case it is difficult to say that the assessee has been carrying on business in fair price shop. We have looked into its articles of association and nowhere is there any reference to the carrying on of business in fair price shop. What appears to be probable is that the assessee in order to provide amenity to its workmen has opened the fair price shop so that commodities may be made available to them at fair price. It may be that in fact profit accrues. But that is not what is material. The question is whether the assessee meant to run the fair price shop as a trade or commerce or a commercial activity. We do not find it possible to say that the fair price shop is a commercial activity of the assessee. We hold that the assessee is not carrying on the business of selling commodities in the fair price shop in a trade or commercial sense, and that, therefore, it is not with reference to the fair price shop a dealer within the meaning of the Act.'
The counsel emphasised that this decision of the Madras High Court has not been accepted by the Supreme Court. He referred us to the decision in Hyderabad Asbestos Cement Products Ltd. vs. State of A.P. wherein the Supreme Court preferred to follow the view taken by the Andhra Pradesh High Court in the decision appealed against. The view of the Andhra Pradesh High Court taken on facts very similar, it was submitted, was opposed to the Madras view in Deputy Commissioner of Commercial Taxes, Coimbatore Division, Coimbatore vs. Sri Thirumagal Mills Ltd. So it was urged that the Madras view is no more good law and it was therefore contended that the matter was open for consideration by this court. We do not think that we can accept this argument.
7. In the decision of this court it has been assumed that the sales of the nature with which we are concerned in these cases will be casual transactions of a business nature. There has however been no discussion of the matter. The Supreme Court seems to have taken the opposite view that they will not be transactions of a business nature. In determining what are the transactions of a business nature though those transactions re only occasional transactions, the definition of the term 'business' will also come into play and this will drag in the words 'adventure in the nature of trade or commerce' contained in the definition of the term 'business'. Then such questions as whether a single transaction would be a business transaction or whether arise or consideration. When a person engages in the business of growing rubber trees with the view to draw from those rubber trees it may be possible to take the view that the sale of rubber trees which fall down in course of time due to age and decay or both or due to other reason like storm or other upheavals of nature is carrying on an adventure in the nature of trade and that such sales may form a part of the business transactions of the assessee though they were only of a casual nature not having the frequency or the periodicity of the business transactions and even if there was no profit-motive. But this is an aspect which the Supreme Court has to consider as we feel bound by the decision in State of Tamil Nadu vs. Branch Shell Oil Storage Shell Oil Storage and Distributing Co. of India Ltd. We have therefore to dismiss these tax revision cases and we do so.
8. Passing on the other batch of cases, T.R.C. Nos. 12, 13, 18, 19, 21 and 22, we think the matter is fully covered by our decision in A. Srinivasa Pai vs. State of Kerala (T.R.C. Nos. 35, 36 and 37 of 1973). The Tribunal has found that the barrels which are the containers in which latex was sold are of substantial value, one barrel costing Rs. 22.50. In these circumstances, it has to be implied that there was an agreement to sell the barrels a well. As far as the sale of these barrels were an agreement to sell the barrels as well. As far as the sale of these barrel were concerned, it was certainly a part of the business transaction of the assessee. The matter is fully covered by our decision in A. Srinivasa Pai vs. State of Kerala (T.R.C. Nos. 35, 36 and 37 of 1973). We therefore negative this contention. All these tax revision cases excepting T.R.C. No. 20 of 1974 wherein an additional point arises will have to therefore to be dismissed.
9. In T.R.C. No. 20 of 2974, an additional point has been taken that the petitioners therein are not the last purchasers in State of rubber latex. The petitioner produced before the Tribunal a letter from M/s. Zaveri & Co. Which indicated that Zaveri & Co. who had been registered as dealers under the Act from 1st October, 1965, had purchased rubber for the sum of Rs. 56,975.87 from the petitioner. The letter also stated that they were liable to be taxed and that they had been taxed assessed had been paid. If what is stated in the letter is the true stated of affairs the petitioner will not be liable to tax on the above turnover . But the contention of the petitioner will not be liable to tax on the above turnover. But the contention of the petitioner has been negatived by the Tribunal. We do not think there is any justification for doing so. The question would have to be investigated and therefore we set aside the order of the Tribunal in T.R.C. No. 20 of 1974 to the extent that it has negatived the claim of the assessee that the turnover of Rs. 56,975.87 must be excluded in computing the turnover for the year. We direct that the matter be reinvestigated and if what is stated in the letter given by M/s. Zaveri & Co. represented the true state of affairs exemption will be granted to that extent.
10. We accordingly dismiss T.R.C. Nos. 12, 13, 18, 19, 21 and 22 of 1974 but remit T.R.C. No. 20 of 1974 for determination of the question whether exemption should be granted to the extent of Rs. 56,975.87 and dismiss the same in all other respects.
11. We direct the parties to bear their respective costs in all these cases.