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2022 (8) TMI 280 - CST, VAT & Sales Tax
Taxability - Sales of cut / sized Silver Oak grown as shade trees in the Tea Estates of the petitioner admittedly in cubic metre and charged per cubic metre - would constitute agricultural produce in terms of Section 2(r) of the TNGST Act, 1959 or would constitute sales of firewood and thus exempt in terms of Entry 52 of Part B of the Third Schedule to the TNGST Act, 1959 or would constitute sales of timber liable to tax under the TNGST Act, 1959? - HELD THAT:- The sale of shade trees cut/sized would constitute firewood and the authorities below have misdirected themselves in looking to the manner of billing to decide the classification viz., whether the wood/ goods sold was timber or fire wood or agricultural produce.
Whether shade trees grown in tea estate cut/sized and sold would constitute "agricultural produce", may be the principal question that needs to be answered first. If the answer to the said question is in the affirmative, the need to travel beyond and examine, whether the wood sold is firewood or timber, may not even arise. This is, in view of the fact that once it is "agricultural produce", then, it goes outside the purview of the turnover under the TNGST Act, 1959 - The shade trees that have been cut/sized and sold are Silver Oak. These trees have their origin in Australia, an exotic plant variety and they are used as shade trees in tea estates in southern parts of India. These shade trees viz., Silver Oak need to be attended to periodically and they have to be planted and grown at particular intervals/distance to serve its purpose as shade trees for growth of tea plants. It is not the case of the Revenue that the growth of Silver Oak is wild or spontaneous, rather it is the case of the petitioner, which remains uncontroverted, these require human effort/labour and attention and thus, would constitute “agricultural produce”.
Thus, it is clear that the cut/ sized shade trees would constitute "agricultural produce" and therefore, fall outside the purview of TNGST Act, 1959 - petition allowed.