Standing rubber trees sold after severance count as goods, making the producer a dealer and the receipt taxable.

An agreement for cutting and removing standing rubber trees was treated as a sale of goods where the terms contemplated severance before removal; the consideration realised after severance was therefore the price of goods, not immovable property. On that basis, the person selling the trees produced by him fell within the statutory definition of dealer under the Kerala General Sales Tax Act, and the amount formed part of taxable turnover. The agricultural or horticultural produce exclusion did not apply on the facts, so the disputed receipt remained liable to sales tax.

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Issues: (i) Whether the agreement for cutting and removing rubber trees amounted to a sale of goods or a transfer of immovable property; (ii) Whether the assessee fell within the definition of dealer and the consideration formed part of taxable turnover under the Kerala General Sales Tax Act, 1963.

Issue (i): Whether the agreement for cutting and removing rubber trees amounted to a sale of goods or a transfer of immovable property.

Analysis: The agreement separated the consideration for enjoyment of the trees from the consideration for their sale, and contemplated cutting and removal of the trees before the stipulated date. On its terms, the transaction conveyed the right to enjoy the trees and also the right to cut and sell the trees standing on the land. The amount realised from the trees after severance represented the price of goods and not the price of immovable property.

Conclusion: The transaction was a sale of goods and not a transfer of immovable property.

Issue (ii): Whether the assessee fell within the definition of dealer and the consideration formed part of taxable turnover under the Kerala General Sales Tax Act, 1963.

Analysis: The statutory definition of dealer included persons selling goods produced by them and also casual traders. The definition of sale treated a transfer of property in rubber by the producer as a sale, and turnover meant the aggregate amount for which goods are sold. The exclusion relating to agricultural or horticultural produce was not attracted on the facts. Since the transaction was a sale of goods, the statutory definitions stood satisfied.

Conclusion: The assessee was liable to be treated as a dealer and the amount was includible in taxable turnover.

Final Conclusion: The revision failed because the disputed receipt arose from a taxable sale of goods and the assessment to sales tax was upheld.

Ratio Decidendi: Where an agreement contemplates severance and sale of standing trees on its terms, the consideration realised after severance is the price of goods, and a person selling such goods produced by him falls within the statutory definitions of dealer, sale, and turnover for sales tax purposes.

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