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TMI Blog2022 (8) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... hether the sales of cut / sized Silver Oak (Scientific name : Grevillea robusta) 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 Tamil Nadu General Sales Tax Act, 1959 (for the sake of brevity, "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. 4. At the outset, it may be relevant to note that the following facts are not in dispute viz., a. That the wood sold is cut/ sized Silver Oak grown as shade tree in the Tea estate of the petitioner. b. That the sale is effected by the petitioner in cubic metres and not by weight. 5. The petitioner during the proceedings for the relevant assessment years, raised a two fold claim, viz., (a) That the sale of cut/sized Silver Oak, would constitute "agricultural produce", thereby falling outside the purview of "turnover" in terms of Section 2(r) of TNGST Act, 1959. (b) Alternatively, the sale of cut/sized Silver Oak represents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... izes of specific measurements, to the indenter..........The shade trees sold by a tea estate company after sizing them for convenience for transportation in lorries would be the agricultural produce and exempt from sales tax under the TNGST Act, 1959. Though the High Court has observed in an earlier case of the appellants that the shade trees cut into sizes and sold were not liable to tax under the TNGST Act, 1959, there is a treak of difference in the facts of the earlier case and the present case, since the shade trees in the present case had been cut into sizes only with an intention to sell as timber, as evidenced by using measurements to describe the commodity in the bills and charging at the unit rate per cubic meter....." 9. The attempt by the Respondents to treat the sale of shade trees cut/ sized as "timber" by relying on the fact that measurements were made at unit rate per cubic meter, in other words, applying the 'user' test to determine the classification / rate of tax after admitting that the wood that was sold is shade trees cut/ sized only for the purpose of transportation may not take the case of the Respondents forward inasmuch as 'user' test, tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TNGST Act, 1959 and Explanation I thereto, which reads as under : "Section 2(r) : " turnover " means the aggregate amount which goods are bought or sold , or delivered or supplied or otherwise disposed of in any of the ways referred to in clause (n), by a dealer either directly or through another, on his own account or on account of others whether for cash or for deferred payment of other valuable consideration , provided that the proceeds of the sale by a person of agricultural or horticultural produce other than tea, and rubber (natural rubber latex) and all varieties and grades of raw rubber grown within the State by himself or on any land in which he has an interest whether as owner, usufructuary mortgagee, tenant or otherwise, shall be excluded from his turnover. Explanation (1) - " Agricultural or horticultural produce " shall not include such produce as has been subjected to any physical, chemical or other process for being made fit for consumption, save mere cleaning, grading , sorting or dying . " 13. A reading of the above would show that to fall within the exclusion under the above provisions as agricultural / horticultural produce, the following requisites have to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale of shade trees, it is true that they were capable of being used as firewood. We are, however, concerned with the character of the trees were cut, and not with the purpose for which the purchasers are likely to use them. It is a misnomer to call the sales as sales of firewood as they were cut and sold as trees or logs, and not as firewood by splitting them with an axe. The sales were actually of shade trees after they were cut. They were sized for enabling convenient transportation. Timber by being sized does not become firewood......" (emphasis supplied) 16. The above extract would show that the claim of the petitioner that the cut / sized Silver Oak / shade tree would constitute "firewood", was rejected. However, this Court had taken the view that the cut/ sized Silver Oak would constitute "agricultural produce", thus, not liable to tax. The following extract would make the position clear: "......Thus, that were agricultural produce is clear from this finding. We shall presently examine whether they lost the character. But, as they were agricultural produce, they would be eligible for the exemption from tax. The Hon'ble Supreme Court has pointed out in Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X
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