1994 (4) TMI 170

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....in these appeals directed against the judgment and order of the High Court of Karnataka is whether rubber sheets of various grades supplied by the State of Karnataka or the Karnataka Forest Plantation Corporation to the private limited companies, were Forest Produce within the meaning of the Karnataka Forest Act, 1963 (hereinafter referred to as `the Act') and hence liable to payment of forest development tax under Section 98A thereof. 2. Even though validity of sub-section (1) of Section 101A, which enabled the State Government to grant or supply forest produce to any person on payment of seigniorage value as may be fixed by the Chief Conservator of Forests, was challenged, it does not appear to have been pressed in the High Court ei....

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....ned Single Judge and it was held that the natural rubber, which has been agreed to be purchased by the Company from the Corporation or the State, being in the shape of RMA sheets, was not forest produce. While the State filed appeal against that order of the Single Judge, the Company filed writ petition for refund of the amount paid by it. Since the controversy in the appeal and the writ petition was the same, the Division Bench decided both, the writ petition and the appeal, by a common order, agreeing with the learned Single Judge that latex, which is the natural produce, hardened by application of the sulphuric acid and given the shape or form of sheets and thereafter dried with the help of smoke and graded into grades of I to V could no....

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....p of the tree but a milky fluid contained in the bark, is obtained by narrow incisions in the bark. During the period of high prices trees were tapped once or even twice a day. With lower prices it has become customary to tap less frequently, but over a wider circumference of the tree. The trees are ordinarily rested for two months or more each year. After the latex has been gathered it is brought to the plantation warehouses and coagulated by acetic acid or some other chemical. The resulting rubber comes on the market as `crepe' rubber or, if it has gone through a smoking process, as `smoked sheet'". 5. `Caoutchouc' is, thus natural rubber which includes latex. The natural rubber or latex is milky fluid obtained by incisions, in the ....

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....ber Manufacturers' Association. 7. The High Court found that since what was sold by the appellant was not rubber obtained from the trees but sheets or blocks of rubber which were chemically and mechanically processed it could not be held to be forest produce. The High Court applied the test of commercial parlance and held that where latex produced from the tree underwent processing howsoever meagre it was the resultant produce obtained by the addition of sulphuric acid could not be treated to be forest produce. It was further found that since Government rubber plantations itself treated grade rubber sheets as different from wet latex while selling the same in auction it could not claim that the latex after processing remained the same....