Trade parlance and dealer status govern taxation of green tea leaves, making them taxable and subject to purchase tax.

Green tea leaves sold as a separate commercial commodity are construed in common or trade parlance where no statutory definition exists, and they are not treated as the tea plant or as vegetables such as sabji, tarkari or sak. On that basis, the article states they fall outside serial No. 40 and serial No. 86 of Schedule I and are taxable goods. It also states that cultivators and farmers selling green tea leaves commercially are dealers under the Act, so purchase tax is payable on purchases from them under section 13(1)(a). The text concludes that the challenge to purchase tax on green tea leaves fails.

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Issues: (i) Whether green tea leaves were non-taxable under serial No. 40 or serial No. 86 of Schedule I. (ii) Whether purchase tax was payable under section 13(1)(a) on purchases of green tea leaves from cultivators and farmers.

Issue (i): Whether green tea leaves were non-taxable under serial No. 40 or serial No. 86 of Schedule I.

Analysis: The expression used in a sales tax statute is to be understood in common or trade parlance where no statutory definition is provided. Green tea leaves, when severed from the tea plant and sold as a separate commercial item, cannot be treated as the plant as a whole. Nor do they answer the description of vegetables commonly known as sabji, tarkari or sak. The commodity retains a distinct commercial identity in the tea trade and is not covered by either exemption entry.

Conclusion: Green tea leaves are not covered by serial No. 40 or serial No. 86 of Schedule I and are taxable goods.

Issue (ii): Whether purchase tax was payable under section 13(1)(a) on purchases of green tea leaves from cultivators and farmers.

Analysis: A dealer under the Act includes a person carrying on the business of selling or purchasing goods. Cultivators and farmers who grow green tea leaves for sale as raw material to tea manufacturers are engaged in business activity and do not cease to be dealers merely because they are agriculturists. On the facts, the suppliers were selling green tea leaves commercially, and the purchasers were therefore liable to purchase tax.

Conclusion: Purchase tax was payable on the purchase of green tea leaves from such cultivators and farmers.

Final Conclusion: The application failed in full, and the challenge to levy of purchase tax on green tea leaves was rejected.

Ratio Decidendi: Where a commodity is sold separately in the market and has a distinct commercial identity, it must be construed in its common or trade parlance meaning, and cultivators selling such goods as part of a commercial activity fall within the definition of dealer for tax purposes.

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