Agricultural produce classification: cut and sized shade trees remained exempt when sold for transportation convenience.

Cut and sized Silver Oak shade trees grown in a tea estate retained the character of agricultural produce because they were raised through human effort and periodic attention, and mere cutting and sizing for transportation did not amount to processing that altered their taxable character. The exclusion in Explanation 1 to Section 2(r) of the Tamil Nadu General Sales Tax Act, 1959 was inapplicable because no process was undertaken to make the produce fit for consumption. Billing method and the buyer's intended use were held inconclusive, and the trees were therefore not liable to tax under the Act.

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Issues: Whether cut and sized Silver Oak shade trees sold in cubic metres constitute agricultural produce falling outside turnover under the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The sale of shade trees grown in the tea estate was not shown to involve any wild or spontaneous growth; the trees required human effort, planting and periodic attention. The fact that the trees were cut and sized only for convenient transportation did not alter their character as agricultural produce. The exclusion in Explanation 1 to Section 2(r) was held inapplicable because no process was undertaken to make the produce fit for consumption. The manner of billing and the use to which the buyer might put the goods was held to be inconclusive for classification. The earlier decision in the petitioner's own case had already treated such shade trees as agricultural produce and had rejected the firewood character.

Conclusion: The cut and sized shade trees were agricultural produce and therefore not liable to tax under the Act.

Ratio Decidendi: Produce grown with human effort in a tea estate retains the character of agricultural produce when it is merely cut and sized for transportation, and such sizing does not amount to processing that changes its taxable character.

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