DY. COMMISSIONER OF AGRICULTURAL INCOME TAX, AND SALES TAX,CENTRAL ZONE, ERNAKULAM vs. M/S. PALAMPADAM PLANTATIONS LTD., KOTTAYAM

674 DY. COMMISSIONER OF AGRICULTURAL INCOME TAX, A ANDSALESTAX,CENTRALZONE,ERNAKULAM v. M/S. PALAMPADAM PLANTATIONS LTD., KOTTAYAM February 12, 1969 [J. C. SHAH, V. RAMASWAMI AND A, N. GROVER, JJ.] Kera/a General Sales Tax Act (Kera/a 15 of 1963), s. 2(viii)- Dealer-Trees of spontaneous growth in private forest-I/ 'produced' hy o»'ner of forest-'Produced', meaning of. Where a person owns and maintains a private forest and sells trees of spontaneous growth therein but does not do anything towards the produc- tion of the trees or their uprooting, be is not a 'dealer' within the meaning of s. 2(viii) of the Kerala General Sales Tax Act. I963. In order t<> fall within the definition, a person must sell goods produced by him by manu- facture, agriculture, horticulture or otherwise. The intention of the Legis- lature in using the word 'produced' was to introduce an element of voli· tion and effort involving the employment ·df some process for bringing into existence the goods. Trees which hav~ grown spontaneously without any plantation by a person cannot be said to have been produced by him hy agriculture or horticulture or •otherwise', stnce the element of 'produc- tion is not present. [675 H; 676 A-B, C-D] CIVIL APPELLATE JURI ICTION : Civil Appeal No. 1058 of 1967. Appeal by special leave from the order dated September 15, 1966 of the Kerala High Court in Tax Revisiqrl Case No. 106 of 1966. M. R. Krishna Pillai, for the appellant. The respondent did not appear. The Judgment of the Court was delivered by Grover, J. This is an appeal by special leave from a judgment of the Kerala High Court dismissing in limine a revision petition directed against the order of the Sales Tax Appellate Tribunal dated April 15, 1966 by which it was held that the respondent company was not a "dealer" within the meaning of s. 2(viii) of the Kerala General Sales Tax Act 1963 (Act 15 of 1963) herein- after called the "Act''. The respondent sold trees of spontaneous growth in its estate for Rs. 50,000 during the assessment year 1963-64. The assess- ing authority levied sales tax by treating the aforesaid amount as taxable turnover under the Act. In appeal the Appellate Assis- tant Commissioner confirmed that order. Before the Appellate Tribunal it was common ground that the trees sold were of spon- taneous growth. The Tribunal did not accede to the contention B c D E F G H

A 8 c DY. COMMR. s. T. v. PALAMPADAM (Grovu, J.) 675 of the State representative that Under the contrac.t, by the process of uprooting the trees, the respondent produced Umber and would be covered by the definition of a "dealer" contained in s. 2(viii) of the Act. It was held that uprooting of the trees was not being done by the respondent and no process had been employed by which it could be said that timber had been produced by it. The appellant herein filed a petition before the High Court raising the following questions of law : "(1) Whether on the facts and in the circumstances of this case, a person owning and maintaining priv~te forest and selling trees of spontaneous growth therem, is a 'dealer' within the meaning of section 2 (viii) of the Kerala General Sales Tax Act, 1963 ? (2) Whether such a person is liable to the levy of sales-tax respect of sales of his timber. under the s!tld Act?" D As mentioned before the High Court rejected the petition for revision at the preliminary hearing. The sole question is whether on the findings given by the Appellate Tribunal the respondent can be regarded as a "dealer" within the definitii:Jin given in s. 2(viii). According to that defi- E nition "dealer" means any person who carried on the business of buying, selling, supplying or distributing goods directly or other- wise whether for cash or for deferred payment or for commission, remuneration or other valuable cQ!lSideration and includes ..... . F ( e) a person who sells goods produced by him by manufacture, agriculture, horticulture or otherwise. It has been contended before us by learned counsel for the appellant that the Aopeliate Tribunal erred in assuming that any agricultural, horticultural or other process was involved in pro- ducing the timber sold. The basic questiol!f it is said, was whether ma!ntenance of a private forest with a view to producing and sellmg valuable timber with the usual attributes of business pre- G sent in the said activity, namely, periodicitv. continuity and profit motive would amount to such process. The other question was whether the said activity i.e .. forestry would not come within the scope of "agriculture, horticulture or otherwise" particularly when the respondent owns substantial area of forest land, and timber from the trees of spontaneous growth is sold year after year with H the object of earning profit. Now in order to fall within the definition of "dealer" a person must sell goods prod\lced by him by manufacture, agriculture,

676 SUPREME COURT REPORTS (1969] 3 s.c.R. horticulture or otherwise. Such trees which have grown sponta- neously and without any plantation by that person cannot passibly bei regarded as having been produced by him by agriculture 6f horticulture. The word "otherwise" also cannot cover trees of spontaneous growth since the elemqn,t of production must be pre- sent. The context in which the word "produced" appears in the definition can only mean "to bring forth, bring into being or exist- ence-to bring (a thing) into existence from its raw materials or elements : " (See the meaning oi the word "produce'' in the Shorter Oxford English Dictionary) .. According to Websters' International English Dictionary the verb "produce" means to bring forward, beget etc. The juxtaposition of the word "manufacture" with "agriculture" ~ "horticulture" is significant and cannot be lost sight of. The intention in employing the word "produced" ob- viously was to introduce an element of volition and effort involv- ing the employment of some process for bnnging into existence the goods. The respondent in the present case has not been found to have done anything towards the production of the trees and even the cutting has been done .by the contractor. The res- pondent therefore cannot possibly be regarded as a person who sells goods produced by him by agriculture, horticulture or other- wise. On the above view of the matter. the appeal fails and is dis- missed. As there is no appearance on behalf of the respondent there will be no order as to costs in this Court. V.P.S. Appeal dismissed. A B c D