Agricultural produce exclusion does not extend to purchase turnover; groundnut purchase assessment upheld under sales tax law.

Section 2(i) of the General Sales Tax Act covered both sales and purchases in turnover, but the proviso exempted only the proceeds of sale of agricultural or horticultural produce grown by the dealer himself or on land in which he had an interest. The pronouns in the proviso were construed as referring to the dealer-seller of his own produce, not to sellers generally. A producer who is not a dealer falls outside the charging provision, while a producer who is also a dealer gets the exclusion only for his own sale proceeds. The exemption was not extended to purchase turnover of groundnut bought from growers, so the assessment on the purchases was upheld.

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Issues: Whether, under section 2(i) of the General Sales Tax Act, the exclusion of proceeds of sale of agricultural or horticultural produce grown by the dealer himself extends so as to exempt the purchase turnover of groundnut bought by a dealer from growers.

Analysis: The definition of turnover in section 2(i) covered both purchases and sales by a dealer. The proviso excluded only the proceeds of sale by a person of agricultural or horticultural produce grown by himself or on land in which he had an interest. The pronouns in the proviso were read as referring to the dealer who sells his own produce, not to the seller generally. On that construction, a producer who is not a dealer is outside the charging provision altogether, while a producer who is also a dealer is excluded only in respect of his own sale proceeds. The statutory scheme did not support extending the exclusion to purchase turnover merely because the goods were agricultural produce.

Conclusion: The exclusion did not cover the assessee's purchase turnover; the assessment on the purchases of groundnut was valid and the challenge failed.

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