2002 (10) TMI 760 - HC - VAT and Sales Tax

Issues Involved:
1. Whether the sales turnover of "cardamom" grown by the petitioner qualifies for exemption under section 2(r) of the Tamil Nadu General Sales Tax Act, 1959.
2. Whether the process of curing cardamom constitutes "mere drying, cleaning, grading, or sorting" as per Explanation (1) to section 2(r) of the TNGST Act.
3. The jurisdiction of the High Court in issuing a writ of certiorari under Article 226 of the Constitution of India.

Issue-wise Detailed Analysis:

1. Exemption of Sales Turnover Under Section 2(r) of TNGST Act:

The petitioner, a registered dealer under the TNGST Act, claimed exemption for the sales turnover of cardamom grown in their estate, arguing it was an agricultural produce. The Assessing Officer, however, rejected this claim, stating that the cardamom underwent a curing process that involved more than mere drying, cleaning, grading, or sorting. This process included heat treatment to preserve and enhance the product's marketability, thus disqualifying it from being considered "mere agricultural produce" under section 2(r). The appellate authorities and the Taxation Special Tribunal upheld this view, concluding that the cardamom ceased to be an agricultural produce and became a commercial product due to the curing process.

2. Process of Curing Cardamom:

The petitioner argued that the curing process was minimal and intended only to make the cardamom marketable, thus retaining its status as an agricultural produce. However, the authorities found that the curing process involved maintaining specific temperatures to not only dry the cardamom but also to enhance its shine, aroma, and flavor. This process was deemed more complex than mere drying, cleaning, grading, or sorting. The court noted that the curing process required expertise and careful supervision, indicating it was a specialized process beyond the scope of "mere drying."

3. Jurisdiction of the High Court:

The court reiterated the limits of its jurisdiction in issuing a writ of certiorari under Article 226, as established by the Supreme Court in Syed Yakoob v. K.S. Radhakrishnan. The High Court's supervisory jurisdiction does not extend to re-evaluating findings of fact made by inferior courts or tribunals unless there is an error of law apparent on the face of the record. The court found no such error in the authorities' determination that the curing process was more than mere drying. The petitioner failed to provide sufficient evidence to counter the factual findings of the lower authorities.

Additional Considerations:

The petitioner cited several cases to support their claim, including Commissioner of Sales Tax, Lucknow v. D.S. Bist and Deputy Commissioner of Agricultural Income-tax and Sales Tax v. A.P. Raman. However, the court found these cases inapplicable as they did not address the specific issue of whether the curing process disqualified the produce from being considered agricultural under section 2(r). The court also emphasized that statutory interpretation should not render any words redundant, and the term "mere" in the context of cleaning, grading, sorting, or drying must be given full effect.

Conclusion:

The court concluded that the curing process applied to the cardamom involved more than mere drying and included additional steps to enhance the product's marketability. Therefore, the cardamom could not be considered as "mere agricultural produce" under section 2(r) of the TNGST Act. Consequently, the petitioner's claim for exemption was denied, and the writ petition was dismissed without costs.

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