JUDGMENT

JUDGMENT :— The question involved in these two matters is the same. So we grant leave in SLP 2440 of 1979 and proceed to dispose of both the appeals together.

2. The respondent assessee in each of these cases acquired a reserve forest. It is common ground that the acquisition was effected with a view to raise a coffee and cardamom plantation thereon For doing this, the assessee had to clear a portion of the forest and in the process fell the unwanted trees standing thereon as natural growth. The cut trees were sold by the assessee in the form of firewood as well as in the form of cut sizes of timber as well as sleepers. Some of the growth was also converted into charcoal and the resultant charcoal sold. On these facts, the question arose in each of these cases whether the price realised by the assessee on the sale of firewood, timber, sleepers and charcoal was assessable to sales tax.

3. We are concerned with the assessment year 1969-70. The assessees turnover, in respect of these items in the case of Shanmugha Estate was Rs. 3,00,396.16 which included a turnover in charcoal of Rs. 86,829.24. In the case of Shakti Estate, the disclosed turnover was as follows :

Firewood 1,98,687.08

Sized timber 83,490.89

Sleepers 28,164.00

3,10,341.97

The Deputy Commercial Tax Officer added 5% towards omissions and assessed a turnover of Rs. 3,25,859.07.

4. The further facts disclosed in the case of Shakti Estate are these. The assessee is a firm of 10 individuals. It had not purchased the forest but has got a lease which entitled them to enjoy the usufruct of the forest by its exploitation. Clause (4) of the partnership deed recites that "the firm will carry on the development and exploitation of the lands". The firm had been functioning for the past 7 years and had been paying sales tax on its sales of firewood, timber and sleepers. But for the first time in assessment year 1968-69, it put forward a claim that the above turnover was not assessable in its hands. The full facts in the case of Shanmugha Estate are not on record but, except for the fact that this was a case of a purchase of a forest by the assessee, and that the plantation does not seem to have started yielding crops, the facts are broadly similar to those in the case of Shakti Estate. The assessing officers and the first appellate authorities held, the turnover in question to be taxable. But the Tribunal reversed this and held that the turnover was not liable for assessment to sales tax.

5. The High Court had dismissed the revision filed by the State in the case of Shakti Estate in respect of assessment year 1968-69 by a short order which read :

"We are of the view that the tribunal was right in its order. This was a case of a lease. It did not involve any sale of trees. Merely because the trees cut were sawn to sizes, that would not by itself make out a sale."

In respect of assessment year 1969-70 also, the States revision was dismissed following the above order. In the case of Shanmugha Estate the department challenged the Tribunals finding only in respect of sales of sized timber. The suggestion that the sizing of trees into timber or their conversion into slpeepers would make a difference was not accepted by High Court, which, following the decision of the Kerala High Court in Kattirayin and Co. v. State, (1976) 38 STC 282 affirmed the Tribunals order by its judgment reported in (1979) 43 STC 226 The State appeals from the judgments in both the cases.

6. The answer to the question posed depends on the interpretation of the expressions "dealer" and "business", as defined under the Tamil Nadu General Sales Tax Act. These definitions read thus :

"Business includes :

(i) any trade, or commerce or manufacture or any adventure or concern in the nature of trade commerce or manufacture whether or not such trade, commerce, manufacture, adventure or conern is carried on with a motive to make gain or profit and whether or not any profit accrues from such trade, commerce, manufacture,