1982 (4) TMI 261

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....ber trees are grown. We extract latex (rubber milk) from those trees. This latex is mixed with water and formic acid at the ratio of 1 gIn. of water: 1 gis. of latex: 1/12 oz. of formic acid. After 24 hours, the mixture will form like a sheet and float like a pillow. This will be introduced in a roller-machine and pressed. The sheets so obtained will be smoked and kept in the smoke for five days. On the 5th day it will come out as red rubber sheets (1 3/4' X 1 1/4'). They are sent for sale in the crude form." The assessing authority treated the assessees as dealers in latex. Since latex was sold across the State borders, the assessing authority brought the turnover to sales tax under the Central Sales Tax Act. The contention of the assesse....

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....d marketable. The learned counsel submitted that the mere fact that latex is made into sheets for easier marketability cannot render the transaction as a business transaction, nor render the assessees dealers in those goods. The learned Government Pleader sought to sustain the assessment and the Tribunal's order confirming the assessment, by urging that the very fact that the assessees have taken on lease a vast area of 374 acres of lands of which 200 acres were planted with rubber trees, shows the commercial motive with which the whole acquisition had been undertaken and the subsequent activities were being performed in the estate. The learned Government Pleader also submitted that in its very essence, latex, whether converted into sheets....

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.... Kerala who ran a rubber plantation derived latex from rubber trees, converted it into sheets and sold the sheets to customers across the State borders. On the question whether the assessee was a dealer liable to tax under the Central Sales Tax Act on the sales in question, the Supreme Court observed that the taxing department had not established that the assessee in that case was a "dealer " within the meaning of the Act. The court observed that apart from the fact that the assessee had converted the latex tapped from the rubber trees into sheets, an operation which was essential for the transport and had marketed the sheets, nothing else has been found by the department on the basis of which it could be held that the assessee was carrying....

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.... tax. There are indications here and there in that judgment to show that the court considered as relevant such factors as the existence of a profit-motive, the nature and set-up of the plantation as a business organisation, the establishment of selling agencies, and the like. In the case before them, however, the Supreme Court did not find any indications of the existence of considerations such as these. They held, therefore, that the assessee in that case could not be assessed to Central sales tax as a dealer carrying on the business of selling latex in any form. This decision was followed by the Supreme Court in Deputy Commissioner v. Greenham Estate (P.) Ltd. [1969] 24 STC 424 (SC), and in a subsequent decision in Deputy Commissioner v.....