TMI Blog1989 (2) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... o we grant leave in SLP No. 2440 of 1979 and proceed to dispose of both the appeals together. The respondent-assessee in each of these cases acquired a reserve forest. It is common ground that the acquisition was effected with a view to raise a coffee and cardamom plantation thereon. For doing this, the assessee had to clear a portion of the forest and in the process fell the unwanted trees standing thereon as natural growth. The cut trees were sold by the assessee in the form of firewood as well as in the form of cut sizes of timber as well as sleepers. Some of the growth was also converted into charcoal and the resultant charcoal sold. On these facts, the question arose in each of these cases whether the price realised by the assessee on the sale of firewood, timber, sleepers and charcoal was assessable to sales tax. We are concerned with the assessment year 1969-70. The assessee's turnover, in respect of these items in the case of Shanmugham Estate was Rs. 3,00,396.16 which included a turnover in charcoal of Rs. 86,829.24. In the case of Shakti Estates, the disclosed turnover was as follows: Firewood 1,98,687.08 Sized timber 83,490.89 Sleepers 28,164.00 ----------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expressions "dealer" and "business", as defined under the Tamil Nadu General Sales Tax Act. These definitions read thus: "'Business' includes: (i) any trade, or commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture, whether 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." " 'Dealer' means 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........" It is seen that, in the case of Shakti Estates, the plantation has started functioning and there is turnover in coffee and cardamom to the extent of Rs. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed purpose, it is of no relevance whether the exploitation and development was under the terms of a lease deed or a purchase deed and the distinction made by the High Court between the two would appear immaterial. The extent of the lands acquired or leased out is so vast that the clearance has to be done in stages and the sale of forest trees extends over several years. Indeed, it is bound to be a recurring feature even after the plantation starts working as there will always be a certain number of trees retained in the plantation as shade trees and the like. The nature of the task undertaken by the assessees is really one in the nature of a venture to carry out sustained, systematic and organised activities in the nature of business. These activities do not merely cover the running of a plantation. They commence right from the beginning when the assessee went in for the land with a view to developing it. They fully intended, as a first stage in the business which they intended to start, to exploit the trees standing on the land to the maximum advantage. Moreover, they did not merely sell the forest trees haphazardly. They took steps to exploit them in a commercial manner. When t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l to or ancillary" to a trade and thus, even on the assessees' own arguments, these activities were incidental and ancillary to the business which the assessee was carrying on or definitely intended to carry on. It is also immaterial, on this definition, that the assessees may not have had a "motive of making a profit or gain" on these sales though on the facts, it is clear that such motive must have existed and, in any event, could not be ruled out. The reference to a "casual" dealer in the second definition also renders it immaterial that the assessees may not have intended to be regular dealers in sleepers, timber, firewood or charcoal but that this was something casual or incidental to the acquisition and exploitation of a forest for running a plantation. Before concluding, we may refer to the decisions cited before us. The decisions of the High Court in the present cases and in Kuttirayin's case [1976] 38 STC 282 (Ker) support the assessees' contention but, for reasons given above, we are unable to accept them as correct. The decision of the Madras High Court in L.N. Plantation Co. v. State [1981] 47 STC 210 supports the department's contention and we approve of the same. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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