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TMI Blog1967 (4) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... nty. In the assessment order in respect of the assessment year 1960-61, with which we are concerned, the Sales Tax Officer, Special Circle, Alleppey, determined the turnover of the assessee at Rs. 6,14,713.92, but did not discuss the question whether the assessee was a "dealer" or not within the Central Sales Tax Act. The Additional Appellate Assistant Commissioner of Agricultural Income-tax and Sales Tax, in the appeal filed by the assessee, dealt with the point raised by the assessee that it was not a dealer, as follows: "My reading of the relevant definitions under the Act and the records and the rules issued thereon leads me to the conclusion that the officer has perfectly considered the aspect and the appellant is a 'dealer' as defined in the Act and the sale effected by him Is liable for tax." The Full Tribunal in the second appeal framed the question for consideration as follows: "Whether on the admitted facts of the case, namely, the appellants only selling rubber sheets produced by conversion of latex obtained from trees grown on lands belonging to them, they could be held to be dealers within definition in the Act." The Tribunal, following the decision of the Kerala H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is agricultural operations; it is not separate and distinct from his agricultural avocation; and he cannot be considered to be a person carrying on a business of selling simply because he effects a sale of his own agricultural produce." The department had formulated the questions of law for decision by the High Court as follows: "(i) Whether a person who regularly sells rubber sheets produced by conversion of latex obtained from trees grown on his own lands is a dealer under section 2(b) of the Central Sales Tax Act, 1956. (ii) Whether the sales of rubber sheets by such a person is a business carried on by him. (iii) Whether the decision of the learned single judge of this Honourable Court in Muhammed and Others v. Sales Tax Officer, Kozhi- kode, and Another [1962] 13 S.T.C. 54., lays down the correct law and whether the principles laid down in that decision require reconsideration." The answer to these questions depends on the true interpretation of the word "dealer " as defined in the Central Sales Tax Act. Section 2(b) provides: "'Dealer' means any person who carries on the business of buying and selling goods and includes a Government which carries on such business." We a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry gain out of a transaction or even a series of transactions. It predicates a motive which pervades the whole series of transactions effected by the person in the course of his activity. In actual practice, the profit-motive may be easily discernible in some transactions: in others it would have to be inferred from a review of the circumstances attendant upon the transaction. For instance, where a person purchases a commodity in bulk and sells it in retail it may be readily inferred that he has a profit-motive in entering into the series of transactions of purchase and sale. A similar inference may be raised where a person manufactures finished goods from raw materials belonging to him or purchased by him, and sells them. But where a person comes to own in the course of his business of manufacturing or selling a commodity, some other commodity which is not a by-product or a subsidiary product of that business and he sells that commodity, cogent evidence that he has intention to carry on business of selling that commodity would be required. Where a person in the course of carrying on a business is required to dispose of what may be called his fixed assets or his discarded goods acq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et up no place of business. The evidence is to the effect that the goods are sold in each village probably in the Khalihan where an agriculturist stores them after harvesting or after they are brought to the granaries except with regard to sugarcane which has to be carted to the mills-this is the normal way in which sugarcane is sold in this Province at least. The plaintiff has a vast area of zirat or bakast lands in his cultivation and therefore the amount of goods produced will be large and the bigness of the figures realised by sale thereof is irrelevant........." In the present case before me all that I find is that the plaintiff owns agricultural zirat lands which he cultivates and from which he produces the goods. This is one operation. Now he cannot consume all the goods and he must sell the excess if he does not require all for his own consumption. How can the mere fact of selling the excess make the plaintiff carry on a business of selling the produce." In Girdharilal Jiwanlal v. The Assistant Commissioner of Sales Tax (Appeals), Nagpur [1957] 8 S.T.C. 732., the Bombay High Court (Nagpur Bench) held that a person does not necessarily fall within the definition of a deale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf in the business of selling or supplying goods, he would not fall within the definition of 'dealer' contained in section 2(c) of the Act. We do not say that in a given case the cultivation of land may not be undertaken with the object or pur- pose of carrying on a business of selling or supplying agricultural produce, but, as stated, in the instant case, there is nothing from which we can so conclude. In all cases of taxation the burden of proving the necessary ingredients laid down by law to justify taxation is upon the taxing authority and in the instant case they have failed to prove the essential ingredient, viz., the intention of the petitioner to carry on a business of selling or supplying agricultural produce." The High Court, in the present case, relied on Konduri Buchiraja- lingam v. The State of Hyderabad [1958] 9 S.T.C. 397., but in our opinion the Supreme Court in that case only assumed but did not decide that the agriculturist was not a dealer, for at page 401, Sarkar, J., observed: "The learned Advocate's contention is that the tax is by these sections really levied on a dealer, in respect of his turnover attributable to some of his transactions. He then referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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