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TMI Blog1989 (2) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... he forest and in the process fell the unwanted trees standing thereon as natural growth. The cut trees were sold by the assessee in the form of firewood as well as in the form of cut sizes of timber as well as sleepers. Some of the growth was also converted into charcoal and the resultant charcoal sold. On these facts, the question arose in each of these cases whether the price realised by the assessee on the sale of firewood, timber, sleepers and charcoal was assessable to sales tax. We are concerned with the assessment year 1969-70. The assessee's turnover, in respect of these items in the case of Shanmugham Estate was Rs. 3,00,396.16 which included a turnover in charcoal of Rs. 86,829.24. In the case of Shakti Estates, the disclosed turnover was as follows: Firewood 1,98,687.08 Sized timber 83,490.89 Sleepers 28,164.00 ----------- 3,10,341.97 ----------- The Deputy Commercial Tax Officer added 5 per cent towards omissions and assessed a turnover of Rs. 3,25,859.07. The further facts disclosed in the case of Shakti Estates are these. The assessee is a firm of 10 individuals. It had not purchased the forest but had got a lease which entitled them to enjoy the usufruct of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otive to make gain or profit and whether or not any profit accrues from such trade, commerce, manufacture, adventure or concern; and (ii) any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern." " 'Dealer' means any person who carries 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- (i) a local authority, company, or Hindu undivided family, firm or other association of persons which carries on such business; (ii) a casual trader........" It is seen that, in the case of Shakti Estates, the plantation has started functioning and there is turnover in coffee and cardamom to the extent of Rs. 58,000 while it is stated that the Shanmugham Estate has not yet started deriving income from its plantation. The principal contention of the assessees is that they are, or may, no doubt, become, dealers in coffee or cardamom or other crops grown, or to be grown, on the estates but that they are by no means dealers in firewood, timber, sleepers or charcoal. They say ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. Indeed, it is bound to be a recurring feature even after the plantation starts working as there will always be a certain number of trees retained in the plantation as shade trees and the like. The nature of the task undertaken by the assessees is really one in the nature of a venture to carry out sustained, systematic and organised activities in the nature of business. These activities do not merely cover the running of a plantation. They commence right from the beginning when the assessee went in for the land with a view to developing it. They fully intended, as a first stage in the business which they intended to start, to exploit the trees standing on the land to the maximum advantage. Moreover, they did not merely sell the forest trees haphazardly. They took steps to exploit them in a commercial manner. When the trees yielded timber, the assessee not only had them sawn and cut to sizes but even converted them into sleepers and sold them. They reduced a part of the jungle growth to charcoal and sold the same. Taken all together, one is left in no doubt that when the assessees went in for a purchase or lease of the forest for starting a plantation they also knowingly let the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lear that such motive must have existed and, in any event, could not be ruled out. The reference to a "casual" dealer in the second definition also renders it immaterial that the assessees may not have intended to be regular dealers in sleepers, timber, firewood or charcoal but that this was something casual or incidental to the acquisition and exploitation of a forest for running a plantation. Before concluding, we may refer to the decisions cited before us. The decisions of the High Court in the present cases and in Kuttirayin's case [1976] 38 STC 282 (Ker) support the assessees' contention but, for reasons given above, we are unable to accept them as correct. The decision of the Madras High Court in L.N. Plantation Co. v. State [1981] 47 STC 210 supports the department's contention and we approve of the same. In Tamil Nadu Trading Co. v. State [1983] 52 STC 7 the Madras High Court was dealing with a case where the assessee was found to be a dealer in timber. But,inthecourseoftheirjudgment,thecourtmadethefollowing observations which support the case of the department: "Even if it were to be assumed, without accepting, for the sake of argument, that the assessee purchased the la ..... X X X X Extracts X X X X X X X X Extracts X X X X
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