Green tea leaves treated as "tea" for sales tax; dealer status challenge also rejected under the statutory definition.

The expression "tea" in the Kerala General Sales Tax Act was construed broadly to include green tea leaves grown by the assessee, not merely manufactured or processed tea, so the leaves were includible in turnover. The assessee's attempt to avoid liability by denying "dealer" status under the Central Sales Tax Act was also rejected, because the statutory concept of dealer was held to be satisfied on the existing binding view. The revisions therefore failed on the substantive issues and the assessments were sustained.

---

---

Issues: (i) Whether green tea leaves grown by the assessee fell within the meaning of "tea" in explanation (1) to section 2(xxi) and explanation (1) to section 2(xxvii) of the Kerala General Sales Tax Act, 1963, so as to be included in turnover; (ii) Whether the assessee could avoid liability on the ground that it was not a "dealer" under the Central Sales Tax Act, 1956.

Issue (i): Whether green tea leaves grown by the assessee fell within the meaning of "tea" in explanation (1) to section 2(xxi) and explanation (1) to section 2(xxvii) of the Kerala General Sales Tax Act, 1963, so as to be included in turnover.

Analysis: The word "tea" in the relevant explanations was construed broadly and not as confined to manufactured tea. The settled view was that "tea" denotes the leaf gathered from the tea bush as a crop of cultivation, whether or not it has undergone processing for market. On that interpretation, green tea leaves are not excluded merely because they are sold in unprocessed form.

Conclusion: The issue was decided against the assessee and in favour of the Revenue; green tea leaves were held to fall within "tea" and were includible in turnover.

Issue (ii): Whether the assessee could avoid liability on the ground that it was not a "dealer" under the Central Sales Tax Act, 1956.

Analysis: The contention was rejected as being covered by the existing binding view that the assessee's activity brought it within the statutory concept of a dealer for the purposes of the central sales tax assessment.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Final Conclusion: The revisions failed on all substantive grounds and the assessments were sustained.

Ratio Decidendi: For sales tax purposes, the expression "tea" includes green tea leaves as grown, and liability cannot be avoided by treating such leaves as outside turnover or by denying dealer status where the statutory definition is satisfied.

---