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TMI Blog1956 (4) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... nd estimated the turnover of the cured nuts sold by the petitioner during 1951-52 at Rs. 40,736 and assessed him to a tax of Rs. 636-8-0 on that turnover. An appeal to the Commercial Tax Officer failed. The assessee took the matter up on further appeal to the Appellate Tribunal. The Tribunal rejected the assessee's contention that he was not a "dealer" at all as defined by the Act. The Tribunal, however, accepted the contentions of the assessee: (1) that what the assessee sold was horticultural produce within the meaning of the proviso to section 2(1) of the Act, and (2) that the assessee had an interest in the land in which that produce was grown, within the mean- ing of section 2(1) of the Act. It was only the correctness of the find- ing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the question at some length and came to the conclusion that despite the processing to which the raw arecanuts had been subjected, what was sold was still horticultural produce. The respondent before us was one of the appellants in that batch of 1952 appeals. In that batch of appeals the question whether the assessees had any interest in the land on which the areca- nut was grown, within the meaning of section 2(i), had also to be considered. Against the decisions of the Tribunal in the 1952 appeals, petitions were preferred to this Court, under section 12-B of the Act, and the judgment in that batch of petitions was reported in S.T. Sultan Ahmed Rowther v. State of Madras(1). In that batch of cases, this Court had no occasion to go into t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) [1954] 5 S.T.C. 166. ordinarily employed by a cultivator or receiver of rent in kind to render the produce raised or received by him fit to be taken to market", which the Income-tax Act specifies in section 2(1)(b)(ii) of that Act. If the principle of that test can be applied in deciding whether what was sold by the assessee was still horticultural produce, it should be obvious that the question at issue should be answered in favour of the assessee. As we have pointed out, it was common ground that there is no market in Coimbatore or elsewhere for arecanuts as they are when plucked from the trees, and it should be remembered they are gathered when they are still unripe. The proviso to section 2(i) of the Act is obviously conceived in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eserve the commodity against its eventual sale. The difficulty which the learned Government Pleader experienced was in drawing a line where arecanuts ceased to be horticultural produce within the meaning of section 2(i) of the Act, especially when he was asked to consider the comparable cases of paddy, rice and particularly boiled rice. Under the Act, tax liability is imposed only on sales by a dealer, and the agriculturist who sold his agricultural produce has to satisfy the statutory requirements of the definition of a "dealer" before any question of tax liability or exclusion therefrom could arise. In the present case that the assessee was a "dealer" as defined by the Act did. not admit of any controversy, at any rate before us. The li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l left intact the real nature of the commodity, the nut that was eventually sold, collected from the green nut that had been gathered from the tree. The process to "cure" the arecanuts was only to pre- serve the commodity. Once again, we have to point out that the pro- cess the assessee had subjected the produce as he gathered it from the tree was in accord with the established practice of such agriculturists in that locality, Coimbatore district. We are, therefore, of opinion that despite the process, the minimum necessary, that the goods sold had been subjected to, what the assessee sold still retained its character as horticultural produce within the meaning of the proviso to section 2(i) of the Act. As we said, any narrow construction o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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