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TMI Blog1960 (2) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... e year 1954-55 for Rs. 10,784-4-11. The Assistant Commercial Tax Officer proposed to levy sales tax on this amount. The respondent objected to the levy on two grounds, firstly, that he was not a dealer within the meaning of the Madras General Sales Tax Act and secondly, that the cocoanut fibre sold by him constituted agricultural or horticultural produce grown by him on his own land and hence the sales of such produce were not liable to tax under the proviso to section 2(i) of the Act. The Assistant Commercial Tax Officer negatived both these contentions and assessed the respondent. The respondent appealed to the Commercial Tax Officer, Malabar South, who agreeing with the Assistant Commercial Tax Officer, dismissed the appeal. On further a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of fibre is really a manufacture and hence the fibre is a manufactured article. He has invited our attention to two decisions of the Madras High Court dealing with the question whether jaggery was an agricultural produce within section 2(i) of the Act. The first case is K.P. Vaidyanatha Iyer v. The State of Madras[1954] 5 S.T.C. 94. In that case their Lordships of the Madras High Court held that the conversion of sugarcane into jaggery was a process of manufacture and hence the exemption contained in the proviso to section 2(i) did not apply to the sale of jaggery. The second case is The State of Madras v. V.R.B. Gopalaratnam Gupta[1957] 8 S.T.C. 16. In this case Krishnaswami Nayudu, J., followed the Division Bench ruling in the previous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived by him fit to be taken to market" to fix the "bounds" of the processes within which the agricultural or horticultural produce retained its original character and applying this test, their Lordships held that arecanut after the aforesaid processes was still a horticultural produce and hence exempted from taxation. The second case is The State of Madras, In re[1956] 7 S.T.C. 546., where the same learned Judges followed their previous decision. Our attention has also been drawn to another old decision of the Patna High Court in J.M. Casey v. Commissioner of Income-tax, Bihar and Orissa[1930] 4 I.T.C. 259. Courtney Terrell, C.J., held in that case that the whole of the profits derived from the manufacture of sisal fibre was agricultural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 957] 8 S.T.C. 16., we express no opinion. In those two cases the learned Judges proceeded on the basis that there was market for sugar-cane in the locality. In the present case the green husks, if they are not sold within a few days of de-husking, will dry up and lose their value. The only use to which the husks could thereafter be put is as fuel or firewood. It may be that there is some market for green husks also in the locality. But it is only a very limited and precarious one. So if an agriculturist, who collects cocoanuts from his own gardens, de-husks them and in order to preserve the value and prevent the deterioration of the husks, converts the husks into fibre by processes ordinarily employed by cultivators, human labour in the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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