Dy. Commissioner of Agricultural
Income Tax, and Sales Tax V. M/S. Palampadam Plantations Ltd., Kottayam 
INSC 33 (12 February 1969)
12/02/1969 GROVER, A.N.
CITATION: 1969 AIR 930 1969 SCR (3) 674 1969
SCC (1) 662
CITATOR INFO :
RF 1989 SC 945 (13)
Kerala General Sales Tax Act (Kerala 15 of
1963), s. 2(viii)--Dealer-Trees of spontaneous growth in private forest-If
'produced' by owner 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 production of the trees or their uprooting, he is not a 'dealer'
within the meaning of s. 2(viii) of the Kerala General Sales Tax Act, 1963. In
order to fall within the definition, a person must sell goods produced by him
by manufacture, agriculture, horticulture or otherwise. The intention of the
Legislature in using the word 'produced' was to introduce an element of
volition and effort involving the employment of some process for bringing into
existence the goods. Trees which have grown spontaneously without any
plantation by a person cannot be said to have been produced by him by
agriculture or horticulture or 'otherwise', since the element of 'production is
not present. [675 H; 676 A-B, C-D]
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 1058 of 1967.
Appeal by special leave from the order dated
September 15, 1966 of the Kerala High Court in Tax Revision Case No. 106 of
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)
hereinafter called the "Act".
The respondent sold trees of spontaneous
growth in its estate for Rs. 50,000 during the assessment year 1963-64.
The assessing authority levied sales tax by
treating the aforesaid amount as taxable turnover under the Act. In appeal the
Appellate Assistant Commissioner confirmed that order. Before the Appellate
Tribunal it was common ground that the trees sold were of spontaneous growth.
The Tribunal did not accede to the contention 675 of the State representative
that under the contract, by the process of uprooting the trees, the respondent
produced timber 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 private forest and
selling_ trees of spontaneous growth therein, 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 said Act ?" 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 definition given in s. 2 (viii).
According to that definition
"dealer" means any person who carried on the business of buying,
selling, supplying or distributing goods directly or otherwise whether for cash
or for deferred payment or for commission, remuneration or other valuable
consideration and includes...... (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 Appellate Tribunal erred in assuming that
any agricultural, horticultural or other process was involved in producing the
timber sold. The basic question it is said, was whether maintenance of a
private forest with a view to producing and selling valuable timber with the
usual attributes of business present in the said activity, namely, periodicity,
continuity and profit motive would amount to such process. The other question
*as 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 the object of earning profit.
Now in order to fall within the definition of
"dealer' a person must sell goods produced by him by manufacture,
agriculture, 676 horticulture or otherwise. Such trees which have grown
spontaneously and without any plantation by that person cannot possibly be
regarded as having been produced by him by agriculture or horticulture. The
word "otherwise" also cannot cover trees of spontaneous growth since
the element of production must be present. The context in which the word
"produced" appears in the definition can only mean "to bring
forth, bring into being or existence-to bring (a thing) into existence from its
raw materials or elements :" (See the meaning of the word
",produce-" in the Shorter Oxford English Dictionary). According to Webster’s'
International English Dictionary the verb "produce" means to bring
forward, beget etc. The juxtaposition of the word "manufacture" with
"agriculture" and "horticulture" is significant and cannot
be lost sight of. The intention in employing the word "produced"
obviously was to introduce an element of volition and effort involving the employment
of some process for bringing 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 respondent
therefore cannot possibly be regarded as a person who sells goods produced by
him by agriculture, horticulture or otherwise.
On the above view of the matter the appeal
fails and is dismissed. 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.