In a recent judgment, the Madras High Court had ruled that Shade trees that have been cut and sized would be considered “agricultural produce” and would be exempt from the Tamil Nadu General Sales Tax Act, 1959. The matter was between Title: M/s. United Nilgiri Tea Estates Company Ltd. v. The Tamil Nadu Sales Tax Appellate Tribunal (W.P. Nos.46464 to 46470 of 2006) and was presided over by the Hon’ble Mr. Justice R. Mahadevan and Hon’ble Mr. Justice Mohammed Shaffiq.
Whether the sales of cut / sized Silver Oak (Scientific name : Grevillea robusta) grown as shade trees in the Tea Estates of the petitioner admittedly in cubic metre and charged per cubic metre would constitute “agricultural produce” in terms of Section 2(r) of the Tamil Nadu General Sales Tax Act, 1959 (for the sake of brevity, “TNGST Act, 1959”) or would constitute sales of “firewood” and thus exempt in terms of Entry 52 of Part B of the Third Schedule to the TNGST Act, 1959 or would constitute sales of “timber” liable to tax under the TNGST Act, 1959?
FACTS OF THE CASE:
The petitioner contested the Tribunal’s decision to levy the tax on the grounds that selling shade trees that have been trimmed or sized for shipping would still be considered “agricultural produce.” The TNGST Act, 1959’s definition of turnover would not apply to it.
The Court was dealing with whether the sales of cut/sized Silver Oak grown as shade trees in the Tea Estates would constitute “agricultural produce” or sales of “firewood” or sales of “timber”.
The petitioner contended that the department erred in deciding whether the wood or other products sold were timber, firewood, or agricultural produce by focusing on the billing process.
The petitioner’s argument that the Silver Oak/shade tree would qualify as “firewood” was denied by the court.
“Despite the fact that both parties mentioned a number of rulings, we believe it may not be essential to investigate the additional issue of whether the wood or items sold were firewood or timber. The aforementioned exercise would only be academic, and we have no intention of participating in it “The judge stated.
The Madras High Court bench of Justice R. Mahadevan and Justice Mohammed Shaffiq thus held that the cut and sized shade trees would constitute “agricultural produce” and, therefore, fall outside the purview of the Tamil Nadu General Sales Tax Act, 1959 (TNGST Act, 1959).
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JUDGMENT REVIEWED BY ADITI PRIYADARSHI