DY. COMMISSIONER OF AGRICULTURAL INCOME TAX, AND SALES TAX,CENTRAL ZONE, ERNAKULAM versus M/S. PALAMPADAM PLANTATIONS LTD., KOTTAYAM

Citation: [1969] 3 S.C.R. 674 · Decided: 12-02-1969 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Dismissed

Judgment (excerpt)

674 
DY. COMMISSIONER OF AGRICULTURAL INCOME TAX, 
A 
ANDSALESTAX,CENTRALZONE,ERNAKULAM 
v. 
M/S. PALAMPADAM PLANTATIONS LTD., KOTTAYAM 
February 12, 1969 
[J. C. SHAH, V. RAMASWAMI AND A, N. GROVER, JJ.] 
Kera/a General Sales Tax Act (Kera/a 
15 of 1963), 
s. 
2(viii)-
Dealer-Trees of spontaneous growth in private forest-I/ 'produced' hy 
o»'ner of forest-'Produced', meaning of. 
Where a person owns and maintains a private forest and sells trees of 
spontaneous growth therein but does not do anything towards the produc-
tion of the trees or their uprooting, be is not a 'dealer' within the meaning 
of s. 2(viii) of the Kerala General Sales Tax Act. I963. In order t<> fall 
within the definition, a person must sell goods produced by him by manu-
facture, agriculture, horticulture or otherwise. 
The intention of the Legis-
lature in using the word 'produced' was to introduce an element of voli· 
tion and effort involving the employment ·df 
some process for bringing 
into existence the goods. 
Trees which hav~ grown spontaneously without 
any plantation by a person cannot be said to have been produced by him 
hy agriculture or horticulture or •otherwise', stnce the element of 'produc-
tion is not present. [675 H; 676 A-B, C-D] 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1058 of 
1967. 
Appeal by special leave from the order dated September 15, 
1966 of the Kerala High Court in Tax Revisiqrl Case No. 106 of 
1966. 
M. R. Krishna Pillai, for the appellant. 
The respondent did not appear. 
The Judgment of the Court was delivered by 
Grover, J. This is an appeal by special leave from a judgment 
of the Kerala High Court dismissing in limine a revision petition 
directed against the order of the Sales Tax Appellate Tribunal 
dated April 15, 1966 by which it was held that the respondent 
company was not a "dealer" within the meaning of s. 2(viii) of 
the Kerala General Sales Tax Act 1963 (Act 15 of 1963) herein-
after called the "Act''. 
The respondent sold trees of spontaneous growth in its estate 
for Rs. 50,000 during the assessment year 1963-64. The assess-
ing authority levied sales tax by treating the aforesaid amount as 
taxable turnover under the Act. In appeal the Appellate Assis-
tant Commissioner confirmed that order. Before the Appellate 
Tribunal it was common ground that the trees sold were of spon-
taneous growth. 
The Tribunal did not accede to the contention 
B 
c 
D 
E 
F 
G 
H 
A 
8 
c 
DY. COMMR. s. T. v. PALAMPADAM (Grovu, J.) 
675 
of the State representative that Under the contrac.t, by the process 
of uprooting the trees, the respondent produced Umber and would 
be covered by the definition of a "dealer" contained in s. 2(viii) 
of the Act. It was held that uprooting of the trees was not being 
done by the respondent and no process had been employed by 
which it could be said that timber had been produced by it. The 
appellant herein filed a petition before the High Court raising 
the following questions of law : 
"(1) Whether on the facts and in the circumstances 
of this case, a person owning and maintaining priv~te 
forest and selling trees of spontaneous growth therem, 
is a 'dealer' within the meaning of section 2 (viii) of the 
Kerala General Sales Tax Act, 1963 ? 
(2) Whether such a person is liable to the levy of 
sales-tax respect of sales of his timber. under the s!tld 
Act?" 
D 
As mentioned before the High Court rejected the petition for 
revision at the preliminary hearing. 
The sole question is whether on the findings given by the 
Appellate Tribunal the respondent can be regarded as a "dealer" 
within the definitii:Jin given in s. 2(viii). According to that defi-
E 
nition "dealer" means any person who carried on the business of 
buying, selling, supplying or distributing goods directly or other-
wise whether for cash or for deferred payment or for commission, 
remuneration or other valuable cQ!lSideration and includes ..... . 
F 
( e) a person who sells goods produced by him by manufacture, 
agriculture, horticulture or otherwise. 
It has been contended before us by learned counsel for the 
appellant that the Aopeliate Tribunal erred in assuming that any 
agricultural, horticultural or other process was involved in pro-
ducing the timber sold. The basic questiol!f it is said, was whether 
ma!ntenance of a private forest with a view to producing and 
sellmg valuable timber with the usual attributes of business pre-
G 
sent in the said activity, namely, periodicitv. continuity and p

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