1. The respondent in both these cases is the North Arcot District Co-operative Sugar Mills Limited, hereinafter called the mills. The first case relates to the assessment year 1965-66, while the second relates to the assessment year 1968-69. For the assessment year 1965-66, the mills were assessed under the Madras General Sales Tax Act, 1959, on their sales of fertilisers to cane-growers, amounting to Rs. 5,13,311.36 and for the assessment year 1968-69 they were assessed not only on their sales of fertilisers amounting to Rs. 12,94,284.46 but also on their sales of press-mud for Rs. 3,135.77. The mills disputed their liability to pay sales tax on their sales of fertilisers and press-mud. The assessing authority had overruled the objection of the mills. The Appellate Assistant Commissioner on appeal upheld the levy of tax on the sales of fertilisers during the assessment year 1965-66. But for the assessment year 1968-69 he has set aside the assessment on the sale value of fertilisers but upheld the assessment so far as it related to sales of press-mud. When the assessments came up before the Tribunal, the State filed an application for enhancement of the assessment for the year 1968-69 as regards the sales of fertilisers. The Tribunal considered that the assessments both in respect of the sales of fertilisers as also press-mud are invalid. The reason given by the Tribunal is that though the mills have actually sold fertilisers and press-mud to the cane-growers, those sales cannot be brought to charge, as the mills are not dealers in fertilisers and press-mud and that, therefore, the transactions of sales of fertilisers and press-mud cannot be brought to charge. Aggrieved against the decision of the Tribunal, the revenue has come to this court.
2. Before us the learned Government Pleader contends that though the Tribunal came to the right conclusion when it said that there have been sales of fertilisers and press-mud to the cane-growers by the mills, it went wrong in holding that the mills were not 'dealers' as defined in the Act in these articles and that, therefore, the sales are not liable to be taxed. It is pointed out by the revenue that once the impugned transactions of supplies of the fertilisers and press-mud by the mills to the cane-growers are treated as sales, then on the principle enunciated by the Supreme Court in State of Tamil Nadu v. Burmah Shell Company Ltd.  31 S.T.C. 426 , those sales have to be brought to charge as the sales of fertilisers and press-mud are in the course of the mills' main business of manufacturing sugar and that it is not necessary that the mills should carry on a separate business either in fertilisers or press-mud for making the transactions of sale taxable.
3. The Tribunal has specifically found that the mills have regularly purchased fertilisers of different kinds such as ammonium sulphate, potash, urea, bone-meal, sulphur phosphate and deoiled cake, and manufactured a new manure mixture by mixing the various kinds of fertilisers purchased by them in a fixed proportion as advised by the Director of Agriculture and supplied the said mixture to the caue-growers who happen to be the members of the society, which runs the mills. The said supplies made to the cane-growers had been shown in the mills' accounts as sales effected by the society. It is on these facts the Tribunal held that there were actual sales of the manure mixture by the mills to the cane-growers.
4. The learned counsel for the mills would contend that the Tribunal's finding that the supplies of fertilisers by the mills to the case-growers are sales is erroneous, that it should be taken as a mere financial transaction, that the mills in discharge of their obligation to advance to the cane-growers in proportion to the extent of the land in which sugarcane is cultivated, supplied the manure mixture as an advance in kind and that, therefore, the facility of giving the advance partly in cash and partly in kind to the sugarcane growers cannot be taken as a sale transaction. We are of the view that in this case the transactions of supply of fertilisers by the mills to the cane-growers involving the transfer of property in the goods for a price can only be treated as sales.
5. The learned counsel for the mills then contends that the purchase of the various fertilisers, the manufacture of a new manure mixture and the supply thereof to the cane-growers by the mills should be taken to have been done for and on behalf of the cane-growers who are members of the society, and that, therefore the supply of the manure cannot be treated as sales effected by the mills. The learned counsel refers to the various bye-laws of the society to show that the society has to provide various amenities to the members including giving of advances to enable them to raise the sugarcane crop. It is said that such advances are given partly in cash and partly in kind in the form of manure mixture. It is urged that bye-law 43 has to be construed as constituting the mills an agent of the sugarcane growers for the purchase of fertilisers. But we are not able to understand bye-law 43 as constituting the mills as an agent of the members for the purchase of either fertilisers or any other commodity. The bye-law merely enables the mills to advance cash up to a particular limit to the members of the mills. If the mills had paid for such advances partly in cash and partly in the form of manure, it has to be taken that the members took the entire advance in cash and utilised a portion of their advance for purchase of manure.
6. We are, therefore, of the view that the reliance placed by the learned counsel on bye-law 43 in support of his stand that the transaction of supply of manure to the cane-growers by the mills is not a sale transaction is misconceived. We, therefore, uphold the view of the Tribunal that there was in fact sale of fertilisers by the mills to the cane-growers. Having found that, there have been sales of manure mixture by the mills to the members, the question is whether the sales have been effected in the course of business of the society. The Tribunal, however, held that the business of the society being only manufacture and sale of sugar, it is not a dealer either in fertilisers or press-mud. It is in that view the Tribunal set aside the assessments. But the Supreme Court in a recent decision in State of Tamil Nadu v. Burmah Shell Company Ltd.  31 S.T.C. 426 has held that after the amendment of the definition of 'business' by Madras Act 15 of 1964 it is not necessary that the seller should be a dealer of that particular commodity, that if the goods sold are connected with the business of a dealer, then the sales could be treated as having been effected in the course of the business and could be brought to charge. Of course, this decision of the Supreme Court was not there when the Tribunal rendered its judgment. We have to, therefore, hold following the decision of the Supreme Court that the sales of fertilisers effected by the society to the cane-growers who are its members are taxable transactions.
7. On the same reasoning, the press-mud which is a by-product obtained by the society in the course of manufacture of sugar when sold by the mills is liable to be taxed even though the mills is not a dealer in that commodity.
8. The tax cases are, therefore, allowed with costs. Counsel's fee Rs. 150 in each.