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TMI Blog1981 (12) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellate Assistant Commissioner, Pollachi, the latter upheld the decision of the Deputy Commercial Tax Officer and dismissed the appeal. The assessee took the matter in second appeal before the Sales Tax Appellate Tribunal, Coimbatore. The Tribunal also came to the conclusion that the assessee was a dealer within the meaning of section 2(g) of the Tamil Nadu General Sales Tax Act, 1959, and that the sale of timber and firewood from the lands owned by the assessee-firm during the assessment year was exigible to sales tax. The assessee has come by way of revision before this Court. Mr. K. Srinivasan, the learned counsel, reiterated the identical contentions urged before the Tribunal. The learned counsel submitted that the assessee was not a dealer in timber or firewood, that the trees sold were of spontaneous growth, that they were cut and sold as the forest area had to be cleared for the purpose of coffee plantation for which the land was bought by the assessee-firm and therefore no sales tax could be levied on the sale proceeds of timber and fuel. In the circumstances, the learned counsel argued that the sale proceeds of trees of spontaneous growth could not be exigible t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er or not such trade, commerce, manufacture, adventure or concern 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." Section 2(g) of the Act defines a dealer meaning "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........" According to section 2(j) of the Act "goods" means all kinds of movable property (other than newspapers, actionable claims, stocks and shares and securities) and includes all materials, commodities, and articles (including those to be used in the fitting out, improvement or repair of movable property); and all growing crops, grass or things attached to, or forming part of the land which are agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss than the cost price advertisement materials such as calendars, purses and key chains. The High Court held that inasmuch as the object of the assessee was not shown to be to engage itself in trade or commerce of publicity materials or the sale of scrap, it would not be liable to pay sales tax. The High Court held that the words "in connection with or incidental or ancillary to" in the second part of the definition of "business", after the amendment, still retained or preserved the requisite that the transaction should be in the course of business understood in a commercial sense and that the intention of Madras Act 15 of 1964 did not appear to be to bring into the tax net a transaction of sale or purchase which is not of a commercial character. The Supreme Court, however, took the view that the sale of the scrap and the advertisement materials at cost price or less than the cost price was connected with the business of the assessee as being incidental or ancillary to the said business. Again in District Controller of Stores v. Assistant Commercial Taxation Officer [1976] 37 STC 423 (SC) the Supreme Court had to consider the definition of "business" in section 2 of the Rajasthan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 69] 24 STC 231 (SC). The assessee, Palampadam Plantations Ltd., was the respondent before the Supreme Court. It owned and maintained vast areas of forest land. The question that arose before the Supreme Court was whether the assessee was a dealer within the meaning of section 2(viii)(e) of the Kerala General Sales Tax Act, 1963, and liable to sales tax in respect of the sale of trees of spontaneous growth in respect of which it was found that the assessee had not done anything towards the production of the trees. Grover, J., speaking for the court, held that the assessee was not a dealer within the meaning of the definition in section 2(viii)(e) of the Act. The learned judge further held that in order to fall within the definition of "dealer" a person must sell goods produced by him by manufacture, agriculture, horticulture or otherwise and trees of spontaneous growth could not be regarded as having been produced by him by agriculture or horticulture. Mr. K. Srinivasan relied on this decision of the Supreme Court for his argument that the sale of trees of spontaneous growth could not be subjected to sales tax. We are unable to accept the contention of Mr. K. Srinivasan. We are clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me process for bringing into existence the goods. The respondent in the present case has not been found to have done anything towards the production of the trees and even the cutting has been done by the contractor. The respondent therefore cannot possibly be regarded as a person who sells goods produced by him by agriculture, horticulture or otherwise." We have already referred to the definition of "dealer" in the Act. The inclusive portion found in the Kerala Act and which was the subject-matter of interpretation by the Supreme Court in Deputy Commissioner v. Palampadam Plantations Ltd. [1969] 24 STC 231 (SC) is conspicuously absent in the Tamil Nadu Act. Consequently, we hold that the said decision of the Supreme Court does not help the assessee in this case. Mr. Srinivasan then referred to the decisions in Kuttirayin and Co. v. State of Kerala [1976] 38 STC 282 and Deputy Commissioner (C.T.) v. Sree Shanmuga Estate [1979] 43 STC 226. We do not derive any support from these cases on the question arising for decision in this case. In the circumstances, we hold that the timber cut from the land of the assessee and sold by the assessee is liable to sales tax. We therefore dismi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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