Case: DEPUTY COMMISSIONER OF AGRICULTURAL INCOME TAX AND SALES TAX, QUILON Vs. MIDLAND RUBBER AND PRODUCE COMPANY LIMITED

2.The respondent, the Midland Rubber and Produce Company Ltd., hereinafter referred to as "the company", is a public limited company engaged in the business of planting and growing rubber trees and converting the latex obtained from the trees into rubber sheets and regularly selling the rubber sheets thus produced by them. The company is a registered dealer under section 7 of the Central Sales Tax Act, 1956 (74 of of 1956), hereinafter referred to as "the Act". For the yearthe company returned in Form II an aggregate gross turnover of Rs. 11, 43, 140.49 claiming exemption on the entire turnover. The company also filed C Forms covering an aggregate turnover of Rs. 11, 03, 934.10. By his order dated September 29, 1962, the Sales Tax Officer, Special Circle, Alleppey, assessed the company on a net turnover of Rs. 11, 04, 268.96. The company took the matter in appeal before the Appellate Assistant Commissioner of Agriculturaland Sales Tax, Trivandrum, and contended that though the company had sold rubber and tea produced in their own estate, they were not dealers within the definition of that term in the Act and that no tax could be levied in respect of the sales. The Appellate Assistant Commissioner rejected the appeal by his order dated December 16, 1962. The respondents preferred a second appeal before the Kerala Sales Tax Appellate Tribunal in Appeal No. 72 of 1963. By its order dated January 1, 1964, the Appellate Tribunal allowed the appeal, holding that the company was not a dealer and thesales of rubber were not taxable under the Act. The appellants thereupon filed Tax Revision Case No. 8 of 1964 before the High Court of Kerala and challenged the correctness of the decision of the Appellate Tribunal. By its order dated July 19, 1965, the High Court dismissed the tax revision case holding that thewas not a dealer as defined in section 2(b) of the Act and followed its previous decision in Deputy Commissioner of Agriculturaland Sales Tax, Quilon v. Travancore Rubber and Tea company Ltd. ([1964] 15 S.T.C. 615; 1964 K.L.J. 534).

Court's reasoning:
In the present case also the only facts found are that the assessee was a public limited company which was engaged in the business of planting and growing rubber trees and converting the latex obtained from the trees into rubber sheets and regularly selling the rubber sheets thus produced by it. It was argued for the appellant that the company was registered as a "dealer" as defined under section 2(b) of the Act. But this fact in itself is not decisive on the question as to whether the turnover ofsales of rubber is taxable under the Act. Otherwise the material facts in the present case are almost identical with those in Deputy Commissioner of Agriculturaland Sales Tax, Quilon v. Travancore Rubber and Tea Co. ([1967] 20 S.T.C. 520) and for the reasons expressed in that case we hold that the sales tax department had not discharged the onus of proving that the assessee was carrying on the business and was therefore a dealer within the meaning of section 2(b) of the Act.The question of law involved in these appeals is identical with the question of law which is theof consideration in Civil Appeal No. 2234 of 1966. The material facts of these two cases are also similar to the material facts found in Civil Appeal No. 2234 of 1966 and for the reasons given in the judgment of that appeal we hold that these two appeals also must fail and they are accordingly dismissed.