The judgment of the court was delivered by

GULATI, J. - This and the connected cases are references under section 11(1) of the U.P. Sales Tax Act. They relate to the same assessee, but to different assessment years. A common question of law has arisen in these cases which has been referred by the revising authority for the opinion of this court. The question is :

"Whether on the facts and circumstances of this case, the article ceased to be an agricultural produce and whether the tea produced by the assessee would be exigible to sales tax ?"

The assessee owns some tea gardens. The tea-leaves grown in the gardens are sold after being processed and packed. The assessee's contention is that the sale of such tea is exempt from sales tax.

Under section 3, which is the charging section, it is the turnover for a year which is taxed. The term "turnover" has been defined in section 2(i) in the following words :

"'Turnover' means the aggregate amount for which goods are supplied or distributed by way of sale or are sold, or the aggregate amount for which goods are bought, whichever is greater, by a dealer, either directly or through another, on his account or on account of others, whether for cash or deferred payment or other valuable consideration :

Provided that the proceeds of the sale by a person of agricultural or horticultural procedure, grown by himself or grown on any land in which he has an interest whether as owner, usufructuary mortgagee, tenant or otherwise, or poultry or dairy products from fowls or animals kept by him, shall be excluded from his turnover."

The assessee relies on the proviso, its contention being that tea sold by it is agricultural produce grown by itself on land which belongs to it. Now, there is no dispute that tea-leaves are agricultural produce and are grown by the assessee in its own gardens. But the department's contention is that tea-leaves are subjected to a long and complicated process which converts the tea-leaves into a different commercial commodity so that the tea-leaves do not remain agricultural produce.

Income arising from agriculture is exempt from tax under the Income-tax Act. Under section 2(1)(b)(ii) of the Income-tax Act, the performance by a cultivator of any process ordinarily employed by a cultivator to render the produce raised by him fit for being taken to the market does not make any change in the nature of the income which continues to be income from agriculture. A provision like this is not to be found in the U.P. Sales Tax Act. But it is clear that the principle underlying this provision has to be kept in view while deciding as to whether or not a produce is agricultural produce for the purposes of the U.P. Sales Tax Act. Under the U.P. Sales Tax Act what is exempt is the sale proceeds of an agricultural produce. It follows, therefore, that the agricultural produce must be in a salable state and any process employed to make the produce salable would not alter its nature. Now, it is a matter of common knowledge that a large number of agricultural products are subjected to some kind of processing before they are fit for sale. Tobacco leaves are ordinarily dried to make them salable. Barley and paddy are dehusked before they are sold as barely and rice. Sometimes agricultural products grown in the original form are not sold in the same form. Tea-leaves when plucked from fields are green and perishable. There is not finding that tea-leaves in that state are marketable. In fact, in that state they are not tea at all. In order to convert the leaves into tea, as it is understood commercially, the leaves are to be subjected to a process of drying, heating and roasting. It follows, therefore, that tea-leaves have to be subjected to a process which is ordinarily employed by the growers of tea in order to render it fit for sale in the market.

It is not disputed on behalf of the department that some process is necessary to convert tea-leaves into tea and such a process will not ma