Curing process and agricultural produce exemption: cardamom lost tax benefit because the process was more than mere drying.

Cardamom subjected to a controlled curing process was held not to retain the character of agricultural produce for exemption under Explanation (1) to section 2(r) of the Tamil Nadu General Sales Tax Act, 1959. The provision saves only mere cleaning, grading, sorting or drying, but excludes produce that has undergone a physical, chemical or other process making it fit for consumption. On the accepted facts, the curing process did more than remove moisture and also improved shine while preserving aroma and flavour. The High Court found no reason under Article 226 to disturb the concurrent factual findings, and the exemption was unavailable.

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Issues: Whether cardamom subjected to the curing process retained the character of agricultural produce so as to qualify for exemption under Explanation (1) to section 2(r) of the Tamil Nadu General Sales Tax Act, 1959.

Analysis: Explanation (1) to section 2(r) excludes agricultural or horticultural produce that has undergone any physical, chemical or other process for being made fit for consumption, while saving only mere cleaning, grading, sorting or drying. The evidence accepted by the assessing authority, the appellate authorities and the revisional tribunal showed that the cardamom was cured in a controlled heating process that did more than remove moisture: it improved shine and preserved aroma and flavour. The process was therefore not mere drying, and the High Court, exercising writ jurisdiction under Article 226 of the Constitution of India, found no basis to disturb the concurrent factual findings.

Conclusion: The cardamom lost the benefit of the exemption under Explanation (1) to section 2(r), and the writ petition was rightly dismissed.

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