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TMI Blog2006 (7) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... cted tax on entry of any goods specified in the First Schedule into a local area for consumption, use or sale therein, at such rates not exceeding 5 per cent of the value of the goods, as may be specified retrospectively or prospectively, by the State Government by issuance of notifications. Section 2 of the Entry Tax Act defines the various expressions used in the Act. The expression "Agricultural produce or horticultural produce" is defined in section 2(A)(1). In substance, it includes all agricultural or horticultural produce excluding tea, coffee, rubber, cashew, cardamom, pepper and cotton and such agricultural or horticultural produce which has been subjected to any physical, chemical or other process for being made fit for consumption except merely cleaning, grading, sorting or drying. Sub-section (6) of section 3 provides for total exemption from entry tax on the goods specified in the Second Schedule to the Entry Tax Act. The exemption Schedule, i.e., Second Schedule in Sl. No. 2, specifies agricultural produce including tea, coffee and cotton (whether ginned or unginned) as exempt from the entry tax. Appellant claimed exemption from entry tax before the assessing author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duce" in section 2(A)(1) of the Entry Tax Act, which clearly excludes rubber, rubber brought in the local area by the appellant could not be considered as agricultural produce for the purposes of the Entry Tax Act. That Sl. No. 2 of the Second Schedule specified agricultural produce, does not exempt rubber from payment of entry tax and, therefore, when the definition of agricultural produce in section 2(A)(1) and enumeration of agricultural produce in Sl. No. 2 of the Second Schedule are taken together and construed, there could be no ambiguity that raw rubber is not an agricultural produce for the purposes of the Act. In repelling this contention, the High Court held that it will have to be guided by the provisions of the definition under section 2(A)(1) which clearly excludes rubber and not by the enumeration in Sl. No. 2 of the Second Schedule. Aggrieved against the aforesaid order the present appeal has been filed. Shri Dhruv Mehta, learned counsel appearing for the appellant strenuously contended that the High Court erred in construing the definition of "agricultural produce or horticultural produce" in section 2(A)(1) of the Entry Tax Act as excluding rubber, whereas the def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct to in consonance with the definition as contained in the statute. Definition of the expression "agricultural produce or horticultural produce" in section 2(A)(1), sub-section (6) of section 3 providing for exemption in respect of goods specified in the Second Schedule and Sl. No. 2 of the Second Schedule specifying "Agricultural produce including tea, coffee and cotton (whether ginned or unginned)" as relevant are extracted below: Section 2(A)(1): " 'agricultural produce or horticultural produce' shall not include tea, coffee, rubber, cashew, cardamom, pepper and cotton; and such produce as has been subjected to any physical, chemical or other process for being made fit for consumption, save mere cleaning, grading, sorting or drying." Sub-section (6) of section 3: "6. No tax shall be levied under this Act on any goods specified in the Second Schedule on its entry into a local area for consumption, use or sale therein." Sl. No. 2 of Second Schedule: "2. Agriculture produce including tea, coffee and cotton (whether ginned or unginned)." We would have readily accepted the submissions advanced by the learned counsel for the appellant without any difficulty under normal circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it fit for consumption would also be excluded from the definition of the agricultural or horticultural produce except where such agricultural produce is merely cleaned, graded, sorted or dried. For example, if the potatoes are cleaned, graded, sorted or dried, they will remain agricultural produce but in case raw potato is subjected to a process and converted into chips for human consumption it would cease to be agricultural produce for the purposes of the Entry Tax Act. The words "such produce" in the second part does not refer to the produce which has already been excluded from the agricultural or horticultural produce but refers to such other agricultural produce which has been subjected to any physical, chemical or other process for being made fit for human consumption. We do not agree with the submission of the learned counsel for the appellant that what is excluded is only such tea, coffee, rubber etc., which are subjected to any physical, chemical or other process for making them fit for consumption. In our opinion, the definition of the agricultural and horticultural produce does not say as to what would be included in the agricultural or horticultural produce, in substanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempting it from payment of entry tax does not mean that all other agricultural produce items which have been excluded from the definition of the agricultural produce would stand included in the Second Schedule to the Act exempting them from payment of entry tax. This would be doing violation to the Act as well as acting contrary to the intent of the Legislature. The learned counsel for the appellant relied upon Karnataka Forest Development Corporation Ltd. v. Cantreads Pvt. Ltd. [1994] 4 SCC 455, to contend that rubber is an agricultural produce. This was a case under the Karnataka Forest Act, 1963 for the purposes of levy of the forest development tax. The meaning assigned to the agricultural produce in the present Act is different from what was assigned to it in the Karnataka Forest Act, 1963. The same is not relevant. Similarly, he cited two other judgments which are not germane to the point and need not even be noticed. The Legislature has deliberately excluded certain items from being agricultural produce and therefore while interpreting the provisions of the present Act, the legislative intention will have to be given effect to in consonance with the definition as contain ..... X X X X Extracts X X X X X X X X Extracts X X X X
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