1. This appeal has been filed against the order of the Board of Revenue dated 27th January, 1975, in respect of the assessment years 1968-69 and 1971-72. The assessee reported a total and taxable turnover of Rs. 74,27,191.99 and Rs. 4,42,886.14 respectively for the assessment year 1968-69. Among other items, the assessee claimed deduction in respect of the following:
(i) Sales of firewood Rs. 82,166.44
(ii) Sales of scrap-iron Rs. 1,832.96
(iii) Sales of second-hand gunnies Rs. 3,127.12
(iv) Sales of charcoal Rs. 92.40
(v) Sales of barbed wire Rs. 498.80
(vi) Difference in the price of wheat refunded Rs. 212.40
2. In respect of item 1, the assessee's claim was based on the ground that the firewood sale was merely agricultural produce cultivated by the assessee on its own. As regards items 2 to 5, it was claimed that they were not dealers in these goods. As regards item 6, it was pointed out that it was not a sale. The Joint Commercial Tax Officer disallowed the claim for deduction of items 1, 3, 4 and 6, but allowed the deduction of items 2 and 5. He fixed the total and taxable turnovers in accordance with these calculations.
3. For the year 1971-72, the assessee claimed deduction of a sum of Rs. 1,21,223 relating to the sale of firewood on the ground that it was an 'agricultural produce' derived from cultivation of its land and eligible for deduction. The assessing authority disallowed this claim.
4. In the appeal before the Appellate Assistant Commissioner, the dispute related to the following items for the year 1968-69: (1) Sale of firewood (item 1); (2) Difference in the price of wheat refunded (item 6); (3) Sale of second-hand gunnies (item 3) and (4) Sale of charcoal (item 4). In the appeal relating to 1971-72, the only item in dispute was sale of firewood. The Appellate Assistant Commissioner accepted the assessee's claims and deleted the aforesaid amounts in the orders passed for the respective years.
5. The Board took up suo motu revision proceeding on the ground that the Appellate Assistant Commissioner was not right in deleting the aforesaid items from the taxable turnover. After hearing the assessee, the Board passed orders directing the restoration of several items in the assessment. The only item which was not considered by the Board, as having been wrongly allowed, was in respect of the sum of Rs. 212.40 (item 6), being the difference in the price of wheat refunded., The assessee has come up on appeal against the order of the Board.
6. With reference to items 2 to 5, there is no dispute that they are liable to be taxed as a result of the judgment of the Supreme Court in State of Tamil Nadu v. Burmah Shell Oil Storage ami Distributing Company of India Limited  3.1 S.T.C. 426. However, the learned counsel for the assessee submitted that there is a question of jurisdiction with reference to two of those items, viz., the sale of scrap-iron (item 2) and barbed wire (item 5). The learned counsel contended that these items were accepted as not liable to be taxed by the assessing authority itself and that those items cannot be the subject of revision because the order in revision has been passed beyond the period of limitation prescribed under the Act. The assessment order is dated 10th January, 1970. The Appellate Assistant Commissioner disposed of the appeal on 5th June, 1970. The Board passed the orders in revision on 27th January, 1975. If the date of the order of the Appellate Assistant Commissioner is to be taken into account for the purpose of determining the question of limitation, then it is not in dispute that the order of the Board would be within time. It is, however, submitted that, as the items had been accepted by the assessing authority itself, and as the matter was not considered by the Appellate Assistant Commissioner, there was no question of his confirming the assessment in respect of those items, and that, therefore, the period of limitation would be only from the assessment order dated 10th January, 1970. Dealing with a similar matter in which the disputed turnover had not been the subject of an appeal before the Appellate Assistant Commissioner and where the assessee's claim for exemption from assessment had been accepted by the assessing authority itself, this Court in Yercaud Coffee Curing Works Ltd. v. State of Madras  33 S.T.C. 170. held that the Board of Revenue could not treat the order of the Appellate Assistant Commissioner as the order to be revised. The theory of merger was held to be inapplicable in such a case and, therefore, the order of the Board of Revenue in so far as it cancelled the exemption granted by the assessing authority was set aside as having been passed beyond the period referred to in Section 34(2)(c) of the Act. Following that decision, we hold that, in respect of those two items, the order in revision is without jurisdiction. But, as regards the other items, the turnover is liable to be taxed as their assessability to tax is covered by the judgment in State of Tamil Nadu v. Burmah Shell Oil Storage and Distributing Company of India Limited  31 S.T.C. 426.
7. In respect of the turnover relating to the sale of shade trees, it is true that they were capable of being used as firewood. We are, however, concerned with the character of the trees, whether they were agricultural or horticultural produce when they were cut, and not with the purpose for which the purchasers are likely to use them. It is a misnomer to call the sales as sales of firewood, as they were cut and sold as trees or logs, and not as firewood by splitting them with an axe. The sales were actually of shade trees after they were cut. They were sized for enabling convenient transportation, Timber by being sized does not become-firewood. The sale was of a produce from the land. Such produce would be agricultural, if the trees had been planted on land on which labour had been expended. The trees would not be agricultural produce if the trees had come up by spontaneous growth. For the assessee, it was submitted that the trees had been planted and had actually been attended to in the same way as tea was grown by the assessee-company, since such trees were required to be planted and grown at the particular places to serve as shade trees for the tea bushes or plants.
8. The claim for exemption is made under Section 2(r), explanation (1). Explanation (1) deals with agricultural or horticultural produce, and it is stated therein that 'agricultural or horticultural produce shall not include such produce as has been subjected to any physical, chemical or other process for being made fit for consumption, save mere cleaning, grading or sorting or drying'. In the present case, the trees have been found by the Board itself to be agricultural produce, as the Board observes:
The firewood sold by the dealers has lost the characteristic as agricultural produce.
9. Thus, that they were agricultural produce is clear from this finding, We shall presently examine whether they lost the character of agricultural produce. But, as they were agricultural produce, they would be eligible for the exemption from tax. The Supreme Court has pointed out in Commissioner of Income-tax v. Raja Benoy Kumar Sahas Roy : 32ITR466(SC) . that some basic operation prior to germination involving an application of human effort on the land itself was necessary to constitute agriculture. In an earlier decision of a Bench of this Court in Commissioner of Income-tax v. Sundara Mudaliar : 18ITR259(Mad) , Viswanatha Sastri, J., pointed out that irrespective of the nature of the produce or product of the land> whatever is grown on land aided by human labour and effort, whatever does not grow wild or spontaneously on the soil without human labour or effort, would be agricultural produce. In the above case, the court was dealing with the assessability to income-tax of the income.derived from the sale of casuarina trees and it was held to be agricultural income. Judged by the test propounded in the above decision also, in the present case, the trees would constitute agricultural or horticultural produce.
10. The exclusion contemplated by the explanation would not apply to the present case because there is no process employed for making them fit for consumption. The timber was sized only for the purpose of convenient transportation so as to enable their sale. There is no material to show that the timber was not merely sized but was split further so as to convert them into firewood. The sizing in this case was necessary only for convenience of transportation in lorries. Sizing them for convenience of transportation is different from splitting them into firewood which would be a different commercial commodity. Further operations would be necessary to convert them into firewood. We are, therefore, satisfied that the assessee is eligible for exemption in respect of sales of the shade trees for the two years. The result is that the appeal for the year 1968-69 is partly allowed and that for 1971-72 is allowed. The assessee will be entitled to the costs. Counsel's fee Rs. 250 (one set).