Interest in land under sales tax law requires exclusive possession; a licence to collect arecanut produce was insufficient.

A mere short-term right to enter land and collect arecanut usufruct was held not to create an interest in land under the proviso to Section 2(i) of the Madras General Sales Tax Act, 1939. The arrangement was only a licence to take produce: the owner retained possession, continued horticultural operations, and the assessees had no exclusive possession or right in the trees. The word "otherwise" in the proviso was read ejusdem generis with ownership, usufructuary mortgage and tenancy, all requiring an interest in land of that character. The sale proceeds of arecanuts therefore could not be excluded from turnover.

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Issues: Whether the assessees' short-term contracts for collection of arecanut usufruct created an interest in land so as to attract the proviso to Section 2(i) of the Madras General Sales Tax Act, 1939, and entitle them to exclude the sale proceeds from turnover.

Analysis: The contract conferred only a right to enter the tope and remove the usufruct during a one-year term. The owner retained possession of the land and continued to perform the horticultural operations. The arrangement did not give the assessees any right in the trees or any exclusive possession of the land, and it was therefore only a licence to take the produce. The expression "otherwise" in the proviso was read ejusdem generis with ownership, usufructuary mortgage and tenancy, all of which involve exclusive possession of the land. A mere right to collect usufruct did not satisfy that requirement.

Conclusion: The contracts did not create an interest in land within the meaning of Section 2(i), and the assessees were not entitled to exclude the sale proceeds of arecanuts from turnover.

Final Conclusion: The petitions failed because the assessees were only licensees with a right to remove the produce and not persons having the requisite interest in the land.

Ratio Decidendi: Under the proviso to Section 2(i) of the Madras General Sales Tax Act, 1939, the term "otherwise" is controlled by ejusdem generis and requires an interest in land akin to ownership, usufructuary mortgage or tenancy, involving exclusive possession of the land.

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