Deputy Commissioner ... v. Tirumbadi Rubber Com..., Kerala High Court, Judgment, Law, casemine.com

Citation Codes

Equivalent Citations

citation codes

Case Number

T.R.C Nos. 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 18, 19, 20, 21 and 22 of 1974

Judges

P. Govindan Nair, C.J
T. Kochu Thommen, J.

Acts

follows:1959 Act After the 1961 and 1964 Amendment Acts Section 2(d).
section 2(vlil) in the Kerala General Sales Tax Act, 1963,
section 2(xxvii) of the Kerala General Sales Tax Act
Kerala General Sales Tax Act, 1963, for short, the Act,
Act (The Madras General Sales Tax Act, 1959),
Kerala General Sales Tax Act, 1963,
Madras General Sales Tax Act, 1959),
clause (ii) to section 2(d)
section 2(d)

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Smart Summary

Factual and Procedural Background

These matters are tax revision cases before the Kerala High Court grouped into two sets: appeals taken by the revenue (T.R.C. Nos. 5, 6, 7, 8, 9, 10, 11, 14, 15 and 16 of 1974) and those filed by two assessees, Tirumbadi Rubber Company, Coimbatore, and M/s. Cochin Malabar Estates Ltd., Coimbatore (T.R.C. Nos. 12, 13, 18, 19, 20, 21 and 22 of 1974). The disputes relate to assessment years 1962-63 to 1965-66. Central contested issues include (a) whether turnover from sales of fallen rubber trees, twigs, empty barrels, scrap and similar items is taxable, and (b) whether amounts realised from the sale of old rubber trees (including trees removed with roots) during 1964-65 are exigible to tax under the Kerala General Sales Tax Act, 1963. The Tribunal had earlier exonerated such turnovers for the assessees in relevant respects, and these tax revision petitions challenge or defend those Tribunal findings. The Court also considered an additional factual point in T.R.C. No. 20 of 1974 relating to whether a subsequent purchaser (M/s. Zaveri & Co.) was registered and had paid tax, which could affect the assessability of a particular turnover figure (Rs. 56,975.87).

Legal Issues Presented

Whether turnover from sale of fallen rubber trees, twigs, empty barrels, scrap and similar items is taxable as part of the assessee's turnover under the Kerala General Sales Tax Act, 1963.
Whether amounts received by an assessee for the sale of old rubber trees (including trees removed with roots) constitute taxable turnover (i.e., whether the assessee was a "dealer" in rubber trees or whether the trees were part of its fixed assets not subject to sales tax).
Whether amendments to the definitions of “business”, “casual trader”, “dealer”, “sale”, “turnover” and “total turnover” in the Kerala Act (as they stood for 1962-63 to 1965-66) rendered the assessees “dealers” and thereby made such casual or incidental sales taxable.
Whether sale of latex barrels (containers) constituted part of the assessee’s business turnover.
In T.R.C. No. 20 of 1974 specifically: whether the petitioner was not the last purchaser of certain rubber latex because a buyer (M/s. Zaveri & Co.) was registered and had paid tax, thereby excluding that turnover from the petitioner’s taxable turnover.

Arguments of the Parties

Revenue's Arguments

The Tribunal erred in exonerating from tax turnover relating to fallen rubber trees, twigs, empty barrels, scrap and similar items; such receipts are part of taxable turnover.
The amendments to the Kerala General Sales Tax Act's definitions (of “business”, “casual trader”, “dealer”, “sale”, “turnover”, and “total turnover”) meant that the two assessees were “dealers” within the meaning of section 2(viii) and therefore liable on these turnovers. The revenue relied on the decision of this Court in Deputy Commissioner of Agricultural Income-tax and Sales Tax v. Kottamullai Tea Co. Ltd. (T.R.C. Nos. 64 and 65 of 1971) in support of this position.

Assessees' Arguments

The turnovers in question represented sales of unserviceable goods or part/whole of fixed assets (old rubber trees) and did not show an intention to carry on business in such goods; therefore they are not taxable turnover. This argument was advanced with reliance on the Supreme Court decision in State of Gujarat v. Raipur Manufacturing Co. Ltd.
Specifically as to the sale of old rubber trees in 1964-65 (amount Rs. 1,27,597.95), the assessee contended they were not dealers in rubber trees, the trees were part of fixed assets sold only once (when uneconomic), and thus the receipts could not be treated as taxable turnover.
Assessees also relied on the Supreme Court decision in State of Tamil Nadu v. Burmah Shell Oil Storage and Distributing Co. of India Ltd. to argue that where statutory language remained unamended, the Raipur principle would apply and exclude such casual transactions from taxable turnover.
In T.R.C. No. 20 of 1974 the petitioner produced a letter from M/s. Zaveri & Co. asserting they purchased rubber from the petitioner and were registered and taxed; the petitioner argued that if true, that turnover should be excluded from its taxable turnover.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
State of Gujarat v. Raipur Manufacturing Co. Ltd. [1967] 19 S.T.C. 1 S.C.	Principle that sales of unserviceable or incidental goods (e.g., fallen trees, twigs, empty tins, etc.) are not necessarily business transactions liable to sales tax where there was no intention to carry on business in those goods.	The Tribunal applied this dictum to exempt turnover from fallen trees, twigs, empty barrels, etc. The High Court recounts and accepts the relevance of that principle as applied by the Tribunal in reaching the same conclusion for the assessment years in question.
State of Tamil Nadu v. Burmah Shell Oil Storage and Distributing Co. of India Ltd. [1973] 81 S.T.C. 426 S.C.	Held that where the statute's definition of “business” remained unamended for a period, the principle in Raipur could apply for that period; examined a Madras Act provision including a similar “casual trader” concept.	The Court considered this Supreme Court decision binding for the period when the defining section remained unamended and treated it as dispositive against the revenue's contention that amended definitions widened liability; the High Court found the assessees’ reliance on this decision well-founded and felt bound by it in dismissing the revenue challenges in the relevant batch of cases.
Deputy Commissioner of Agricultural Income-tax and Sales Tax v. Kottamullai Tea Co. Ltd. (T.R.C. Nos. 64 & 65 of 1971)	Interpreted amended statutory definitions to support the proposition that certain transactions would fall within the definition of a “dealer” and be taxable.	The revenue relied on this Court's decision to support its argument that amended definitions made assessees dealers. The High Court considered this reliance but concluded that due to differences in the Kerala Act's language (absence of a particular clause) and the binding effect of Burmah Shell, the Kottamullai decision did not dictate a contrary outcome in these matters.
Loyal Textile Mills Ltd. v. State of Madras (T.C. Nos. 170 & 213 of 1964)	Applied Raipur principle to exclude turnover from incidental sales (empty tins, dealwood boxes, etc.) that were not part of the assessee's business.	The Madras High Court's use of this decision was examined; the Kerala High Court noted it as one of the authorities cited in the chain of cases but found that it did not compel a conclusion adverse to the assessees in the present appeals.
Deputy Commissioner of Commercial Taxes v. Sri Thirumagal Mills Ltd. (T.C. No. 152 of 1964)	Held that a fair price shop run to provide amenity to workmen was not a commercial activity of the assessee and did not make the assessee a dealer in that trade for the purposes of the Act.	The High Court noted this Madras High Court decision, observed that it was not accepted by the Supreme Court in another context, and treated the general question of whether incidental activities amount to business as one requiring careful consideration of intention and statutory language.
Hyderabad Asbestos Cement Products Ltd. v. State of A.P.	Referenced as a Supreme Court decision that preferred the Andhra Pradesh High Court view in a factually similar context (contrasting with the Madras view).	The High Court referred to this decision to show there was conflicting high-court authority on these issues and that the Supreme Court had not uniformly accepted the Madras approach; nonetheless, the High Court stated it felt bound by the Supreme Court decision in Burmah Shell for the present questions.
A. Srinivasa Pai v. State of Kerala (T.R.C. Nos. 35, 36 & 37 of 1973)	Addressed the assessability of sales of barrels/containers used in the assessee's trade and held that when containers are of substantial value and there is an implied agreement to sell them, such sales form part of business turnover.	The High Court found the Tribunal's factual finding (barrels of substantial value — one costing Rs. 22.50) meant the sale of barrels was part of the assessee's business transactions; the Court applied A. Srinivasa Pai and dismissed the related tax revisions accordingly.

Court's Reasoning and Analysis

The Court proceeded in structured stages:

The Court first grouped the tax revision matters into the revenue's petitions and the assessees' petitions covering assessment years 1962-63 to 1965-66 and identified the core factual categories (fallen trees, twigs, empty barrels, scrap, and sale of old rubber trees).
It quoted and considered the Tribunal's reasoning which had applied the Supreme Court dictum in State of Gujarat v. Raipur Manufacturing Co. Ltd. to hold that turnover from fallen trees, twigs, empty barrels and similar unserviceable goods were not taxable, while noting an exception for scrap rubber (if the scrap was of the product dealt in).
The revenue challenged that conclusion by pointing to amendments to definitions in the Kerala General Sales Tax Act (terms such as “business”, “casual trader”, “dealer”, “sale”, and “turnover”) and relied on this Court's earlier decision in Kottamullai Tea Co. Ltd. to argue that the assessees became “dealers” and so the turnovers should be taxed.
The assessees countered by relying on the Supreme Court decision in State of Tamil Nadu v. Burmah Shell, which had held that where the statutory provision remained unamended the Raipur principle could apply; the Burmah Shell analysis examined materially similar language in the Madras Act and concluded that Raipur applied for the unamended period.
The Court compared the Kerala Act's language with the Madras Act's definition of “business” and observed a critical textual difference: the Kerala Act did not contain a clause equivalent to clause (ii) of section 2(d) of the Madras Act (which had broadened “business” to include “any transaction in connection with, or incidental or ancillary to” trade). Because of this absence, the Court found the assessees' reliance on the Burmah Shell decision persuasive.
The Court analysed prior authorities cited (Madras High Court decisions such as Loyal Textile Mills and Thirumagal Mills, and other high-court and Supreme Court decisions) and noted conflicting approaches in different courts; however, it found itself bound by the Supreme Court decision in Burmah Shell for the period and statutory circumstances involved.
Accordingly, for the first batch of cases (revenue appeals challenging Tribunal's exoneration of fallen trees etc.), the Court concluded that the Tribunal's application of Raipur, as construed in Burmah Shell for the unamended period, was correct and the revenue's contentions failed.
On the separate batch concerning barrels and containers, the Court relied on its own earlier decision in A. Srinivasa Pai v. State of Kerala and the Tribunal's factual finding that barrels were of substantial value (one costing Rs. 22.50) to conclude that the barrel sales were part of the assessee's business turnover; these tax revision petitions were dismissed.
For T.R.C. No. 20 of 1974 the Court examined the factual material — a letter from M/s. Zaveri & Co. asserting purchase and payment of tax — and concluded that the Tribunal ought not to have negatived the petitioner's claim without investigation. The Court remitted that matter for reinvestigation so that, if the letter represented the true state of affairs, exemption could be granted to the petitioner for Rs. 56,975.87.
Finally, the Court made the procedural direction that parties bear their respective costs.

Holding and Implications

Holding:

DISMISSED: The Court dismissed the revenue's tax revision challenges relating to turnover from fallen rubber trees, twigs, empty barrels, scrap and the like for the assessment years in question, upholding the Tribunal's application of the Raipur principle as constrained by the Supreme Court decision in Burmah Shell for the relevant statutory period. The Court also dismissed T.R.C. Nos. 12, 13, 18, 19, 21 and 22 of 1974 (relating to barrel sales and other matters) applying its earlier decision in A. Srinivasa Pai. T.R.C. No. 20 of 1974 was remitted for further investigation on the discrete factual point of whether M/s. Zaveri & Co. purchased the rubber and paid tax (exemption of Rs. 56,975.87 if established); in all other respects T.R.C. No. 20 was dismissed. The parties were directed to bear their own costs.

Implications:

The direct effect is that, on the facts and statutory language applicable to the assessment years before the Court, turnovers from incidental sales of fallen rubber trees, twigs and similar unserviceable goods were not taxable in the hands of the assessees (subject to exclusion of scrap rubber where it constituted the product of the business).
Sales of barrels of substantial value used in the business were held to form part of taxable turnover and the related tax revisions were dismissed.
T.R.C. No. 20 has been remitted for factual re-examination; the Court directed reinvestigation and potential exclusion of a specified turnover amount if the buyer's letter proves correct.
No claim in the opinion is advanced that a new general precedent is being laid down beyond application of existing Supreme Court and High Court authority; the Court framed its decision primarily as application and reconciliation of prior authorities to the particular statutory text and facts before it.

Ordered accordingly by P. Govindan Nair, C.J., as set out in the opinion.

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Deputy Commissioner Of Agricultural Income-Tax And Sales Tax (Law), Ernakulam v. Tirumbadi Rubber Company Ltd. And Others

P. Govindan Nair, C.J:— These tax revision cases can be grouped under two heads, those taken by the revenue and those filed by the two assessees, Tirumbadi Rubber Company, Coimbatore, and M/s. Cochin Malabar Estates Ltd., Coimbatore. The tax revision cases taken by the revenue are 5, 6, 7, 8, 9, 10, 11, 14, 15 and 16 of 1974 and those by the two assessees are 12, 13, 18, 19, 20, 21 and 22 of 1974. These cases relate to the assessment years 1962-63 to 1965-66.

2. The question raised by the revenue is that the Tribunal erred in exonerating from tax the turnover pertaining to fallen rubber trees, twigs, empty barrels, scrap and so forth. We shall first deal with the batch of cases wherein this question has been raised. The relevant parts of the Tribunal's order pertaining to this aspect reads as follows:

“The turnover assessed in the years under appeal admittedly represented sale proceeds of fallen rubber trees, twigs, empty barrels, scrap, etc. Of these It is not clear whether the scrap is scrap rubber. If what is sold is scrap rubber we feel that the turnover of such scrap is assessable in the hands of the appellant-company as it is one of the products dealt in by them. But the fallen trees, twigs, empty barrels and such other items are unserviceable goods as far as the business of the company is concerned and an attempt on their part to realise a price by sale of such goods does not necessarily lead to an inference that they intended to carry on business in these goods. Therefore, applying the dictum laid down by the Supreme Court in State of Gujarat v. Raipur Manufacturing Co. Ltd,1, we find that the turnover in question as stated above for the different years are not liable to tax in the hands of the appellant-company, subject of course excluding the part, if any, relating to sales of scrap rubber. We may also state here that the rubber trees are fixed assets of the company and we find no provision in the Kerala General Sales Tax Act, 1963, to bring to tax the sale price of a part or whole of the fixed assets of the assessee. This point will be elaborately considered while dealing with the question of assessability or otherwise of the amounts received by the company towards sale value of rubber trees during the year 1964-65.

“The third contention raised on behalf of the appellant-company is regarding the inclusion of the sale value of old rubber trees in the taxable turnover for 1964-65. During the year the company received a sum of Rs. 1,27,597.95 towards the sale value of old rubber trees. According to the learned Advocate, the above amount is not taxable. In the first place, he contends that the company is not a dealer in rubber trees. He relies on the decision of the Supreme Court reported in State of Gujarat v. Raipur Manufacturing Co. Ltd., in support of his contention. When the rubber trees were planted long ago it was not the intention of the company to cut and sell them on any particular date. When the trees became old and uneconomic they had to be removed and the area replanted with new rubber plants. From these circumstances, it is contended that an intention on the part of the assessee-company to do business in the sale of rubber trees cannot be spelt and that therefore the amounts realised by the company towards value of rubber trees allowed to be removed with roots from the estate cannot be treated as turnover liable to tax under the Act. Alternatively, it is also contended that rubber tree is not timber and that hence explanation 1 to section 2(xxvii) of the Kerala General Sales Tax Act will not be attracted in regard to the transactions in question. Still another alternate contention is that the rubber trees sold to the various parties as per the agreements to cut and remove with roots form part of the land and hence only a part of the fixed assets of the company. Hence according to him the sales are not exigible to tax under the Kerala General Sales Tax Act, 1963. The goods sold are old and uneconomic rubber trees and they are admittedly part of the fixed assets of the appellant-company. It is also a fact that the sales of these trees are only once in their lifetime, viz., when they become old, unserviceable and uneconomic. We are unable to hold that in disposing of such old and uneconomic trees, the company was carrying on business of selling such trees. These sales were frequent and the volume was large but it cannot be presumed that when the trees were planted there was an intention to carry on the business of sales of these trees nor are these trees by-products or subsidiary products arising in the course of the business of the company. The trees are part of the fixed assets of the company. They are of course sold by the company for a price which goes into the profit and loss account of the business and may indirectly reduce the cost of production of the items dealt in by the company, but on that account, it cannot be said to become part of the business of selling latex and other products produced by the company. In order that receipts from sale of a commodity may be included in the taxable turnover, it must be established that the assessee was carrying on business in that particular commodity. and to prove that fact it must be established that the assessee had an intention to carry on business in that commodity. A person who sells goods which are old, uneconomic, unserviceable and unsuitable for his business, does not on that account become a dealer in those goods, unless he had an intention to carry on the business of selling those goods. Hence we find that the appellant-company cannot be assessed on the sale value of the rubber trees for the year 1964-65 on both counts, viz., that the appellant-company is not a dealer in rubber trees and that the trees are part of their fixed assets. In view of our above finding, we do not find it necessary to go into the question whether rubber trees are timber.”

3. The counsel for the revenue relied on the amendments that have been effected to the Kerala General Sales Tax Act, 1963, for short, the Act, to the definitions of the terms “business” [section 2(vi)], “casual trader” [section 2(vii)], “dealer” [section 2(viii)], “sale” [section 2(xxi)], “turnover” [section 2(xxvii)], and “total turnover” [section 2(xxvi)], read the amended definitions and contended that as the Act stood at the time of the various assessments (1962-63 to 1965-66), the two assessees were clearly “dealers” within the meaning of that definition in section 2(viii) of the Act and that therefore the turnover pertaining to the sale of the goods of the description already referred to was taxable. He relied on the decision of this court in Deputy Commissioner of Agricultural Income-tax and Sales Tax v. Kottamullai Tea Co. Ltd. (T.R.C Nos. 64 and 65 of 1971), which supports him fully. The above argument has been met by the counsel for the assessee by relying on the decision of the Supreme Court in State of Tamil Nadu v. Burtnah Shell Oil Storage and Distributing Co. of India Lid. [1973] 81 S.T.C 426 S.C. The Supreme Court had therein to consider a statute (The Madras General Sales Tax Act, 1959), which contained the definition of the term “casual trader” almost in very similar terms as that contained in the Act. Nevertheless, the Supreme Court took the view that the principle of the decision in State of Gujarat v. Raipur Manufacturing Co. Ltd. [1967] 19 S.T.C 1 S.C. would apply for the period of the assessment year when the section defining business stood unamended. The section defining “business” before and after the amendment read as follows:

1959 Act After the 1961 and 1964 Amendment Acts section 2(d). “‘business’ includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture, whether or not any profit accrues from such trade, commerce, manufacture, adventure or concern.” section 2(d). “‘business’ includes— (i) any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture, whether or not such trade, commerce, manufacture, adventure or concern is carried on with a motive to make gain or profit and whether or not any profit accrues from such trade, commerce, manufacture, adventure or concern; and (ii) any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern.”

4. For the period after the amendment to section 2(d) by Incorporating 2(d)(11), It was held that the transactions were taxable because of the widening of the term “business” by the amendment.

5. It may be noted that the definition of the term “dealer” in section 2(vlil) in the Kerala General Sales Tax Act, 1963, included a casual trader and a casual trader took within its ambit a person who has occasional transactions of a business nature involving the buying, selling, supply or distribution of goods in the State.

6. The Act does not contain a clause (ii) to section 2(vi) of the Act defining “business” similar to clause (ii) to section 2(d) defining business in the Act (The Madras General Sales Tax Act, 1959), with which the Supreme Court was concerned. The counsel for the assessees therefore contended before us that the decision of the Supreme Court is a direct authority for the proposition that the assessees in these cases cannot be said to be “dealers” within the meaning of section 2(viii) of the Act. We think the assessees' counsel is well-founded in this submission. The counsel for the revenue pointed out that this decision of the Supreme Court cannot be treated to be an authority for deciding the ambit of the definition of the term “casual trader”. It was urged that the Supreme Court had not adverted to the definition of the term “casual trader” at all and had expressed no opinion in regard to the question whether the definition of “dealer”, which included a casual trader, got a wider meaning by such inclusion. He referred us to the judgment of the Madras High Court from which the appeal was taken and which appeal gave rise to the decision of the Supreme Court in State of Tamil Nadu v. Burmah Shell Oil Storage and Distributing Co. of India Ltd., and invited our attention to a short paragraph, the last one in the judgment of the Madras High Court (Burmah Shell Oil Storage and Distributing Co. of India Ltd., Madras v. State of Madras), reading as follows:

“That the sales of scrap by the assessee is not liable to tax, is covered by the principle of our judgment in T.C Nos. 170 and 213 of 1964 (Loyal Textile Mills Ltd. v. State of Madras) and so too canteen sales by our judgment in T.C No. 152 of 1964 (Deputy Commissioner of Commercial Taxes v. Sri Thirumagal Mills Ltd. [1867] 20 S.T.C 287.).

7. The counsel then drew our attention to the decision in T.C Nos. 170 and 213 of 1964, which is reported in Loyal Textile Mills Ltd. v. State of Madras and stressed that there has been no discussion of the implications of the inclusion of a “casual trader” within the definition of the term “dealer”. He invited our attention to the relevant passage reading as follows:

“The last item consists of sales of empty tins, dealwood boxes, hoop fron, tiles, cinder, etc. The assessee during the relevant years was a dealer in yarn and cotton. It was not its business to deal in goods like dealwood boxes, hoop iron, tiles, etc. In the course of its business it came by these goods which it had necessarily to dispose of the intention in selling them was not to do business as such. This part of the turnover is covered by the principle in State of Gujarat v. Raipur Manufacturing Co. Ltd. [1967] 19 S.T.C 1 S.C.”

8. The counsel therefore contended that one of the decisions relied on by the Madras High Court also was not of help. He then invited our attention to the other decision in T.C No. 152 of 1964 relied on by the Madras High Court which is reported in Deputy Commissioner of Commercial Taxes, Coimbatore Division, Coimbatore v. Sri Thirumagal Mills Ltd. In the judgment, Veeraswami, J., after referring to the definition of the term “business” observed as follows:

“In this case it is difficult to say that the assessee has been carrying on business in fair price shop. We have looked into its articles of association and nowhere is there any reference to the carrying on of business in fair price shop. What appears to be probable is that the assessee in order to provide amenity to its workmen has opened the fair price shop so that commodities may be made available to them at fair price. It may be that in fact profit accrues. But that is not what is material. The question is whether the assessee meant to run the fair price shop as a trade or commerce or a commercial activity. We do not find it possible to say that the fair price shop is a commercial activity of the assessee. We hold that the assessee is not carrying on the business of selling commodities in the fair price shop in a trade or commercial sense, and that, therefore, it is not with reference to the fair price shop a dealer within the meaning of the Act.” The counsel emphasised that this decision of the Madras High Court has not been accepted by the Supreme Court. He referred us to the decision in Hyderabad Asbestos Cement Products Ltd. v. State of A.P (sic) wherein the Supreme Court preferred to follow the view taken by the Andhra Pradesh High Court in the decision appealed against. The view of the Andhra Pradesh High Court taken on facts very similar, it was submitted, was opposed to the Madras view in Deputy Commissioner of Commercial Taxes, Coimbatore Division, Coimbatore v. Sri Thirumagal Mills Ltd. So it was urged that the Madras view is no more good law and it was therefore contended that the matter was open for consideration by this court. We do not think that we can accept this argument.

9. In the decision of this court it has been assumed that the sales of the nature with which we are concerned in these cases will be casual transactions of a business nature. There has however been no discussion of the matter. The Supreme Court seems to have taken the opposite view that they will not be transactions of a business nature. In determining what are the transactions of a business nature though those transactions are only occasional transactions, the definition of the term “business” will also come into play and this will drag in the words “adventure in the nature of trade or commerce” contained in the definition of the term “business”. Then such questions as whether a single transaction would be a business transaction br whether the transaction was the sale of a capital asset or was a business transaction would arise for consideration. When a person engages in the business of growing rubber trees with the view to draw latex from those rubber trees it may be possible to take the view that the sale of rubber trees which fall down in course of time due to age and decay or both or due to other. reasons like storm or other upheavals of nature is carrying on an adventure in the nature of trade and that such sales may form a part of the business transactions of the assessee though they were only of a casual nature not having the frequency or the periodicity of the business transactions and even if there was no profit-motive. But this is an aspect which the Supreme Court has to consider as we feel bound by the decision in State of Tamil Nadu v. Burmah Shell Oil Storage and Distributing Co. of India Ltd. We have therefore to dismiss these tax revision cases and we do so.

10. Passing on to the other batch of cases, T.R.C Nos. 12, 13, 18, 19, 21 and 22, we think the matter is fully covered by our decision in A. Srinivasa Pai v. State of Kerala (T.R.C Nos. 35, 36 and 37 of 1973). The Tribunal has found that the barrels which are the containers in which latex was sold are of substantial value, one barrel costing Rs. 22.50 In these circumstances, it has to be implied that there was an agreement to sell the barrels as Well. As far as the sale of these barrels were concerned, it was certainly a part of the business transaction of the assessee. The matter is fully covered by our decision in A. Srinivasa Pai v. State of Kerala (T.R.C Nos. 35, 36 and 37 of 1973). We therefore nagative this contention. All these tax revision cases excepting T.R.C No. 20 of 1974 wherein an additional point arises will have therefore to be dismissed.

11. In T.R.C No. 20 of 1974, an additional point has been taken that the petitioners therein are not the last purchasers in the State of rubber latex. The petitioner produced before the Tribunal a letter from M/s. Zaveri & Co., which indicated that Zaveri & Co., who had been registered as dealers under the Act from 1st October, 1965, had purchased rubber for the sum of Rs. 56,975.87 from the petitioner. The letter also stated that they were liable to be taxed and that they had been taxed and tax assessed had been paid. If what is stated in the letter is the true state of affairs the petitioner will not be liable to tax on the above turnover. But the contention of the petitioner has been negatived by the Tribunal. We do not think there is any justification for doing so. The question would have to be investigated and therefore we set aside the order of the Tribunal in T.R.C No. 20 of 1974 to the extent that it has negatived the claim of the assessee that the turnover of Rs. 56,975.87 must be excluded in computing the turnover for the year. We direct that the matter be reinvestigated and if what is stated in the letter given by M/s. Zaveri & Co. represented the true state of affairs exemption will be granted to that extent.

12. We accordingly dismiss T.R.C Nos. 12, 13, 18, 19, 21 and 22 of 1974 but remit T.R.C No. 20 of 1974 for determination of the question whether exemption should be granted to the extent of Rs. 56,975.87 and dismiss the same in all other respects. We direct the parties to bear their respective costs in all these cases.

13. Ordered accordingly.

Deputy Commissioner ... v. Tirumbadi Rubber Com...