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TMI Blog1975 (8) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... ttedly represented sale proceeds of fallen rubber trees, twigs, empty barrels, scrap, etc. of these It is not clear whether the scrap is scrap rubber. If what is sold is scrap rubber we feel that the turnover of such scrap is assessable in the hands of the appellant-company as it is one of the products dealt in by them. But the fallen trees, twigs, empty barrels and such other items are unserviceable goods as far as the business of the company is concerned and an attempt on their part to realise a price by sale of such goods does not necessarily lead to an Inference that they intended to carry on business in these goods. Therefore, applying the dictum laid down by the Supreme Court In State of Gujarat v. Raipur Manufacturing Co. Ltd.[1967] 19 S.T.C. 1 (S.C.)., we find that the turnover in question as stated above for the different years are not liable to tax In the hands of the appellant-company, subject of course excluding the part, if any, relating to sales of scrap rubber. We may also state here that the rubber trees are fixed assets of the company and we find no provision In the Kerala General Sales Tax Act, 1963, to bring to tax the sale price of a part or whole of the fixed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be presumed that when the trees were planted there was an intention to carry on the business of sales of these trees nor are these trees by-products or subsidiary products arising In the course of the business of the company. The trees are part of the fixed assets of the company. They are of course sold by the company for a price which goes into the profit and loss account of the business and may indirectly reduce the cost of production of the Items dealt in by the company, but on that account, It cannot be said to become part of the business of selling latex and other products produced by the company. In order that receipts from sale of a commodity may be included in the taxable turnover, It must be established that the assessee was carrying on business in that particular commodity and to prove that fact it must be established that the assessee had an intention to carry on business in that commodity. A person who sells goods which are old, uneconomic, unserviceable and unsuitable for his business, does not on that account become a dealer In those goods, unless he had an intention to carry on the business of selling those goods. Hence we find that the appellant-company cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any profit accrues ture, whether or not such trade, comfrom such trade, commerce, manufacmerce, manufacture, adventure or conture, adventure or concern." cern is carried on with a motive 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." For the period after the amendment to section 2(d) by incorporating 2(d)(11), It was held that the transactions were taxable because of the widening of the term "business" by the amendment. 5.. It may be noted that the definition of the term "dealer" In section 2(viii) In the Kerala General Sales Tax Act, 1963, Included a casual trader and a casual trader took within its ambit a person who has occasional transactions of a business nature involving the buying, selling, supply or distribution of goods in the State. 6.. The Act does not contain a clause (11) to section 2 (vi) of the Act defining "business" similar to clause (11) to section 2(d) defining business In the Act (The Madras General Sales Tax Act, 1959), with which the Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... selling them was not to do business as such. This part of the turnover is covered by the principle in State of Gujarat v. Raipur Manufacturing Co. Ltd.[1967] 19 S.T.C. 1 (S.C.)." The counsel therefore contended that one of the decisions relied on by the Madras High Court also was not of help. He then invited our attention to the other decision in T.C. No. 152 of 1964 relied on by the Madras High Court which is reported in Deputy Commissioner of Commercial Taxes, Coimbatore Division, Coimbatore v. Sri Thirumagal Mills Ltd.[1967] 20 S.T.C. 287. In the judgment, Veeraswami, J., after referring to the definition of the term "business" observed as follows: "In this case It is difficult to say that the assessee has been carrying on business in fair price shop. We have looked into its articles of association and nowhere is there any reference to the carrying on of business in fair price shop. What appears to be probable is that the assessee in order to provide amenity to its workmen has opened the fair price shop so that commodities may be made available to them at fair price. It may be that in fact profit accrues. But that is not what is material. The question is whether the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carrying on an adventure in the nature of trade and that such sales may form a part of the business transactions of the assessee though they were only of a casual nature not having the frequency or the periodicity of the business transactions and even If there was no profit-motive. But this Is an aspect which the Supreme Court has to consider as we feel bound by the decision in State of Tamil Nadu v. Burmah Shell Oil Storage and Distributing Co. of India Ltd.[1973] 31 S.T.C. 426 (S.C.). We have therefore to dismiss these tax revision cases and we do so. 8.. Passing on to the other batch of cases, T.R.C. Nos. 12, 13, 18, 19, 21 and 22, we think the matter is fully covered by our decision in A. Srinivasa Pai v. State of Kerala(2) (T.R.C. Nos. 35, 36 and 37 of 1973). The Tribunal has found that the barrels which are the containers in which latex was sold are of substantial value, one barrel costing Rs. 22.50. In these circumstances, It has to be Implied that there was an agreement to sell the barrels as well. As far as the sale of these barrels were concerned, It was certainly a part of the business transaction of the assessee. The matter is fully covered by our decision in A. Srini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised on behalf of the revenue are: "A. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that the sale proceeds of the shade trees (timber) of the respondent (company) is not exigible to tax under the Kerala General Sales Tax Act, 1963? B. Is not the reasoning and conclusion of the Appellate Tribunal, holding that the sale proceeds are not exigible to tax under the Kerala General Sales Tax Act, 1963, vitiated in not giving due effect to section 2(vi), 2(viii), 2(xxi) and 2(xxvii) of the Act? and C. Are not the decisions reported in State of Gujarat v. Raipur Manufacturing Co. Ltd.[1967] 19 S.T.C. 1 (S.C.). and Southern India Tea Estates Company Limited v. State of Kerala[1967] 20 S.T.C. 397. distinguishable?" 2.. The Sales Tax Appellate Tribunal found that the assessee was not carrying on the business of selling and therefore was not a dealer within the meaning of that term as defined in the Kerala General Sales Tax Act, 1963 (hereinafter called the Act). That In order to become a "dealer" as defined in most of the Sales Tax Acts, at any rate, as It stood sometime ago, a person must carry on the business of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion 'charitable devise or bequest,' as it occurs in section 3. It is not said in terms that 'charitable bequest' shall mean one or other of the things which are enumerated, but that it shall 'include' them. The word 'include' is very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of the statute; and when it is so used these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import, but also those things which the interpretation clause declares that they shall include." This decision of the Privy Council has been noted by Maxwell on Interpretation of Statutes, 12th edition, at page 270, and there is the following passage: "Sometimes it is provided that a word shall 'mean' what the definition section says it shall mean: in this case, the word is restricted to the scope indicated in the definition section. Sometimes, however, the word 'include' is used in order to enlarge the meaning of words or phrases occurring in the body of the statute; and when it is so used these words or phrases must be construed as comprehending, not only such things as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aning of section 2(xxvii). 6.. The questions that are referred to us cannot therefore be answered by this court without a determination whether the wood of the shade trees or the trees themselves can be said to be "timber ". The question can be answered only in this manner: If the shade trees are "timber", the sale proceeds of such trees would be assessable under the Sales Tax Act. If, on the other hand, the shade trees do not form "timber", the sale proceeds of such shade trees will not be turnover as defined In the Act and therefore not assessable to tax taking into account the charging section, section 5 of the Act. We answer the question accordingly. 7. As we indicated earlier the assessee has a contention that the shade trees are not timber. This question has to be determined. Therefore we set aside the order of the Tribunal and remit the case back to the Tribunal for determination of this question. It will be open to the Tribunal to take evidence for determining this question and the parties will be given sufficient opportunity to state and prove their respective cases. The Tribunal will dispose of the cases in the light of what we have stated in this judgment after ent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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