NILAMBUR RUBBER COMPANY LIMITED Vs. STATE OF KERALA

JUDGEMENT

(1.) We shall deal with the facts for Assessment Year 1978-79. The facts for Assessment Year 1980-81 are similar.

(2.) The assessee Company owns substantial estates in the State of Kerala and plants rubber thereon. The latex which is obtained from the rubber trees is converted into rubber sheets and sold in Kerala and outside. We are here concerned with sales made outside Kerala. The assessing authority found that the Company was a dealer within the meaning of that word in the Central sales Tax Act, 1956 and he made an assessment upon that basis. The appellate Assistant Commissioner confirmed the assessment. The Company approached the Sales Tax Tribunal, which reversed the view taken by the lower authorities. It did so upon the basis that it had not been established that the Company was actually engaged in the purchase and/or sale of rubber or that the objects specified in the Company's memorandum and articles of association were actually being carried on. In the absence of any finding by the assessing authority that the Company was actually engaged in the business of purchase and sale, the Tribunal was unable to accept the revenue' s contention that the Company fell within the definition of "dealer". The Revenue filed a tax revision case before the High Court at Kerala against the findings of the Tribunal. The High Court noted that the definition of dealer was very wide and remanded the matter to the Tribunal to find out the intention with which the Company had formed a selling organisation and other relevant facts. The Tribunal, on remand, found that the amended definition of the term "dealer" was wide enough to take in the Company. It said:

(3.) Learned counsel for the Company drew our attention to the judgment of this Court in Dy. Commr. of Agricultural Income Tax and Sales Tax v. Travancore Rubber and Tea Co. This was a case of a company growing rubber trees on estates in Kerala. The only facts that were established were that it was converting the latex tapped from its rubber trees into sheets which it sold to its customers and that the conversion of latex into rubber sheets was a process essential for the transport and marketing of the product. This Court said: