TMI Blog2022 (8) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - W.P. Nos.46464 to 46470 of 2006 - - - Dated:- 29-7-2022 - Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s placed on the sale bills, which would show that the wood was sold in cubic metre and not by weight. According to the Revenue, firewood is normally sold by weight and not in cubic metre. It is only the timber that is sold by length/cubic metre. The said factum was taken to be conclusive proof of the fact that the wood sold was neither agricultural produce nor firewood, but sale of timber and thus, liable to tax. 7. Aggrieved by the orders of the Assessing Authority rejecting the claim of the petitioner that the wood sold was agricultural produce or alternatively firewood, the petitioner preferred appeals before the First Appellate Authority, who confirmed the orders of assessment, while placing reliance on the sale bills and the fact that the wood was sold in cubic metre and not by weight. Though the First Appellate Authority referred to a number of judgments on what would constitute firewood, reference is not made to those judgments in this order as it may not be necessary to examine the same in view of the conclusion that we propose to draw. 8. Before we examine the order of the Tribunal, it is necessary to note that the First Appellate Authority found that the wood sold b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Haryana [(1978) 42 STC 433]; b. Andavar and Co. vs. State of Tamil Nadu [(1995) 97 STC 141]; and c. State of Tamil Nadu vs. Modern Mill Stores [(1996) 102 STC 539 SC]. 10. The above orders of the First Appellate Authority were carried in appeals to the Appellate Tribunal, which again affirmed the orders of the Authorities below on the premise that the petitioner had effected sales of timber. The said conclusion was drawn primarily on the basis that the wood was sold in cubic metre and not by weight, which is an unusual practice, when it comes to sales of firewood. The Tribunal brushed aside the argument of the petitioner that the wood sold was agricultural produce and the issue was covered by a decision of the Division Bench in respect of the petitioner's own case, reported in 45 STC 10 stating that the same was considered by the First Appellate Authority. 11. The present writ petitions are filed by the petitioner against the order of the Tribunal challenging the levy of tax, on the premise that sale of shade trees cut/sized for the purpose of transportation, would still constitute agricultural produce and would fall outside the purview of turnover under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e land whereon the agricultural produce is grown. 14.1. To understand, what would constitute agriculture , it may be relevant to refer to the following judgments of the Hon'ble Supreme Court and the Madras High Court: (i) CIT vs. Raja Benoy Kumar Sahas Roy ( 31 ITR 426 ) wherein it was held that some basic operation prior to germination involving application of human effort on the land itself was necessary to constitute agriculture . (ii) CIT vs. Sundara Mudaliyar ( 18 ITR 259 ) wherein it was pointed out that irrespective of the nature of the produce or the product of the land whatever is grown on land aided by human labour and effort, whatever does not grow wild or spontaneously on soil without human labour or effort, would constitute agricultural produce . 14.2. 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Sastri, J., pointed out that irrespective of the nature of the produce or product of the land, whatever is grown on land aided by human labour and effort, whatever does not grow wild or spontaneously on the soil without human labour or effort, would be agricultural produce. In the above case, the court was dealing with the assesse-ability to income-tax of the income derived from the sale of casuarina trees and it was held to be agricultural income. Judged by the test propounded in the above decision also, in the present case, the trees would constitute agricultural or horticultural produce. The exclusion contemplated by the explanation would not apply to the present case because there is no process employed for making them fit for consumption. The timber was sized only for the purpose of convenient transportation so as to enable their sale. There is no material to show that the timber was not merely sized but was split further so as to convert them into firewood. The sizing in this case was necessary only for convenience of transportation in lorries. Sizing them for convenience of transportation is different from splitting them into firewood which would be a different commer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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