Deeming provision in sales tax law treated grower as dealer for all purposes, without separate proof of business activity.

Explanation II to section 2(1)(e) of the Andhra Pradesh General Sales Tax Act was construed as a valid deeming provision. A grower who processes and sells agricultural or horticultural produce in a different form is treated as a dealer for all purposes of the Act, and the fiction must be given full effect to its logical consequences. On that basis, no separate enquiry is required into whether the person carries on business in the ordinary sense under section 2(1)(bbb). The inclusive definition of business and the turnover proviso were read consistently with the explanation, and the challenge based on repugnancy to the main definition was rejected.

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Issues: Whether Explanation II to section 2(1)(e) of the Andhra Pradesh General Sales Tax Act, 1957, which deems a grower of agricultural or horticultural produce who processes and sells such produce in a different form to be a dealer, is valid; and whether, notwithstanding that explanation, it is still necessary to prove in each case that such person carries on business within the meaning of section 2(1)(bbb).

Analysis: The explanation was construed as a deeming provision creating a legal fiction, and the fiction had to be given full effect to its logical consequences. On that basis, a grower covered by the explanation was treated as a dealer for all purposes of the Act, including the charging provision, and it was unnecessary to conduct a separate enquiry into whether he carried on business in the ordinary sense. The inclusive definition of business and the turnover proviso were read as consistent with the explanation, and the challenge that the explanation was repugnant to the main definition was rejected. The authorities relied on by the petitioners were distinguished, particularly because the Madras enactment considered there did not contain a comparable provision.

Conclusion: Explanation II to section 2(1)(e) is valid, and no separate proof of carrying on business is required where the deeming provision applies.

Ratio Decidendi: A statutory deeming provision, when validly enacted within legislative competence, must be carried to its logical conclusion and the person so deemed is treated as falling within the statutory definition for all purposes of the Act without a separate factual enquiry into the ordinary requirements of that definition.

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