Minimal processing of horticultural produce does not change its character; cocoanut fibre remained exempt from sales tax.

Cocoanut fibre obtained from husks of coconuts grown on the owner's land remained horticultural produce where only ordinary processes were used to preserve the husks, prevent deterioration, and make the commodity marketable. The Court treated the effect of processing on the character of produce as a factual question, but held that minimal processing needed to render agricultural or horticultural produce fit for sale does not convert it into a manufactured article. On that basis, de-husking and conversion of green husks into fibre did not alter the essential character of the produce, and the fibre continued to qualify for exemption under the proviso to section 2(i) of the Madras General Sales Tax Act.

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Issues: Whether cocoanut fibre obtained from the husks of cocoanuts grown on the respondent's own land, after ordinary processes applied to preserve the husks and make them marketable, remained horticultural produce so as to fall within the exemption under the proviso to section 2(i) of the Madras General Sales Tax Act.

Analysis: The governing principle was taken to be that where an agriculturist subjects produce from his land only to minimum processes ordinarily employed to make it marketable, more marketable, or fit to be taken to market, the produce does not lose its character as agricultural or horticultural produce. The Court treated the question whether a process changes the character of the produce into a manufactured article as one of fact, but held that ordinary processes used to prevent deterioration and preserve value do not by themselves convert horticultural produce into a taxable manufactured commodity. Applying that principle, the Court found that de-husking and converting the green husks into fibre merely preserved the commodity, prevented loss of value, and made it fit for the market; the fibre had not changed its essential character.

Conclusion: Cocoanut fibre in the circumstances of the case continued to be horticultural produce and was exempt from sales tax under the proviso to section 2(i) of the Madras General Sales Tax Act.

Ratio Decidendi: Produce from an agriculturist's own land does not cease to be agricultural or horticultural produce merely because it is subjected to the minimum ordinary processes necessary to prevent deterioration and make it marketable or fit for sale.

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