Jaggery sales tax liability turns on dealer status and denial of agricultural produce exemption

Jaggery extracted from sugar-cane was held not to be agricultural or horticultural produce, so it did not qualify for exemption from turnover. The assessee's systematic cultivation of sugar-cane, conversion into jaggery, maintenance of account books, and supply of jaggery in transactions showed carrying on business for profit or income, making the assessee a dealer for sales tax purposes. The fact that the lands were leased and rent was received in jaggery did not alter the character of the dealings. The assessment was therefore sustained.

---

---

Issues: Whether the sale of jaggery by the assessee could be treated as a sale by a dealer so as to attract sales tax, and whether jaggery constituted agricultural produce exempt from inclusion in turnover.

Analysis: Jaggery was held not to be agricultural or horticultural produce after it is extracted from sugar-cane. The assessee's activity of systematically growing sugar-cane, converting it into jaggery, maintaining account books, and supplying the jaggery in the course of transactions showed that the activity amounted to carrying on business of selling goods for profit or income. The circumstance that the lands were leased to tenants and rent was received in jaggery did not alter the character of the assessee's dealings for sales tax purposes.

Conclusion: The assessee was liable to be treated as a dealer, jaggery was not exempt agricultural produce, and the assessment was sustained.

Ratio Decidendi: Jaggery obtained from sugar-cane is not agricultural produce, and systematic sale of such goods in the course of business makes the seller a dealer liable to sales tax.

---