RAJAGOPALAN, J.

The limited question that arises in this application preferred by the Government under section 12-B of the Madras General Sales Tax Act is whether the arecanuts sold by the respondent in the assessment year 1951-52 constituted "agricultural or horticultural produce grown by (the assessee) himself or grown on any land in which he had an interest, whether as owner, usufructuary mortgagee, tenant or otherwise", within the meaning of the proviso to section 2(1) of the Act.

The Deputy Commercial Tax Officer rejected the amounts of the petitioner and estimated the turnover of the cured nuts sold by the petitioner during 1951-52 at Rs. 40, 736 and assessed him to a tax of Rs. 636-8-0 on that turnover. An appeal to the Commercial Tax Officer failed. The assessee took the matter up on further appeal to the Appellate Tribunal. The Tribunal rejected the assessee's contention that he was not a "dealer" at all as defined by the Act. The Tribunal, however, accepted the contentions of the assessee : (1) that what the assessee sold was horticultural produce within the meaning of the proviso to section 2(i) of the Act, and (2) that the assessee had an interest in the land in which that produce was grown, within the meaning of section 2(i) of the Act. It was only the correctness of the finding of the Tribunal, that what was sold by the assessee in 1951-52 was horticultural produce, that the Government challenged in the proceedings before us.

The assessee's appeal was heard by the Appellate Tribunal along with appeals preferred by others similarly situate. They were all persons who grew and marketed arecanuts in Coimbatore district in accordance with the practice that prevailed in that district. It was not disputed at any state that there was no market for the arecanuts as gathered from the tree. While the practice in South Kanara district is to gather the nuts after they are ripe, the practice in Coimbatore district is to gather them while they are still raw. After gathering the produce, the arecanuts are peeled, and the kernels are then sliced, boiled and dried. In the course of boiling, the tannin content of the nuts gets minimised, and that itself colours the nuts, and that colour persists after the nuts are dried. It is only after they are dried that they are fit to be marketed. So much was common ground. While the assessee contended that what was sold was still horticultural produce, the contention of the Government was that it was produce subjected to a manufacturing process that was sold, and that what was sold had ceased to be horticultural produce as such before it was sold.The Tribunal disposed of the question before it on a very narrow basis. In an earlier batch of appeals of 1952 preferred by assessees of Coimbatore district, the Tribunal discussed the question at some length and came to the conclusion that despite the processing to which the raw arecanuts had been subjected, what was sold was still horticultural produce. The respondent before us was one of the appellants in that batch of 1952 appeals. In that batch of appeals the question whether the assessees had any interest in the land on which the arecanuts was grown, within the meaning of section 2(i), had also to be considered. Against the decisions of the Tribunal in the 1952 appeals, petitions were preferred to this Court, under section 12-B of the Act, and the judgment in that batch of petitions was reported in S. T. Sultan Ahmed Rowther v. State of Madras In that batch of cases, this Court had no occasion to go into the question whether what was sold was agricultural or horticultural produce. In that judgment it was recorded : "The finding of the Appellate Tribunal, which differed from the Departmental Authorities on that point, was that the cured arecanut sold by the assessee was agricultural or horticultural produce. The correctness of that finding was not challenged, and the arguments before us proceeded on the assumption that the arecanut sold