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PETITIONER: DY.  COMMISSIONER OF AGRICULTURAL INCOME TAX,AND SALES TAX,

       Vs.

RESPONDENT: M/S.  PALAMPADAM PLANTATIONS LTD., KOTTAYAM

DATE OF JUDGMENT: 12/02/1969

BENCH: GROVER, A.N. BENCH: GROVER, A.N. SHAH, J.C. RAMASWAMI, V.

CITATION:  1969 AIR  930            1969 SCR  (3) 674  1969 SCC  (1) 662  CITATOR INFO :  RF         1989 SC 945  (13)

ACT: 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.

HEADNOTE: 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]

JUDGMENT: 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 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

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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

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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   Websters’ 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 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. 777