GLENROCK RUBBER ESTATES Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) This revision raises a point under the Central Sales Tax Act, 1956. Glenrock Rubber Estates, the petitioners herein, were the lessees of a rubber estate, engaged in planting and growing rubber trees. The Tribunal accepted the following representation by the petitioners as to the nature of their activities :

(2.) The assessing authority treated the assessee as dealers in latex. Since latex was sold across the State borders, the assessing authority brought the turnover to sales tax under the Central Sales Tax Act. The contention of the assessee was that they were not dealers in latex or in latex sheets which they sold, but their operations were purely agricultural in nature, for bringing out latex from the rubber trees. According to them these operations do not amount to a business of dealing in such goods. This contention, however, was rejected by the assessing authority, On appeal, the assessment was confirmed. The Appellate Tribunal observed that what the assessees sold in the market cannot be regarded as agricultural produce, but was a commercial produce, since latex, after it was extracted from the rubber trees, was subjected to certain chemical treatment.

(3.) In this revision, the conclusion of the taxing authorities and the Tribunal is challenged. The question before us is whether the assessees can be regarded as dealers within the meaning of the Central sales Tax Act whose sales turnover of dealers (sic) can be properly brought to tax under this Act. The expression "dealer" is defined under the Act. Shortly stated, a dealer is defined as a person who carries on the business of buying and selling goods. The central argument of Mr. Chandran, the learned counsel for the assessees, is that the assesses in this case are not carrying on any business of selling latex. All that they do is to derive latex from the plantations and convert it into money value. This process, according to the learned counsel, involves the conversion of latex into sheets which represent the ordinary form in which the substance is rendered marketable. The learned counsel submitted that the mere fact that latex is made into sheets for easier marketability cannot render the transactions as as business transaction, nor render the assessees dealers in those goods.