# 9.2 STATE OF KERALA AND OTHERS v. BHAVANI TEA PRODUCE CO. LTD

- **Citation:** [1966] 2 S.C.R. 92
- **Court:** Supreme Court of India
- **Decided:** 1965-10-07
- **Case number:** Civil Appeals Nos. 650 and 651 of 1964
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/9-2-state-of-kerala-and-others-v-bhavani-tea-produce-co-ltd-3768
- **Pages:** 10

## Headnote

9.2
STATE OF KERALA AND OTHERS
A
v.
BHAVANI TEA PRODUCE CO. LTD.
October 7, 1965
{P.
B.
GAJENDRAGADKAR,
C.J., K.
N.
WANCHOO,
B
M. HIDAYATULLAH, J. C. SHAH AND S. M. SIKRI, JJ.]
Madras Plantations Agricultural Income-tax Act, 1955 (as extended to
Kerala State) s. 3--Charge of income-tax on income of previous yearAccounts maintained on mercantile system-Coffee supplied to Coffee Board
under s. 25 of the Coffee Act, 1942 and price entered in accounts though
not received-Price received in next accounting year-Income 1vhcn accrues
C
-Sale when occurs-Whether in year of supply or year in l'.Jhich price
received.
Under s. 3 of the Madras Plantations Agricultural Income-tax Act, 1955
(as extended to Kerala State) income-tax was to be assessed in each financial
year on the income of an asses-see during the previous year.
"fhe first
assessment under the Act could be for 1955-56 so that income of any
period before April 1, 1954 could not be taxed under the Act.
The
D
respondent company was assessed for the years 1955-'56 and 1956-'57 on
its income of the relevant previous years.
The company objected to the
inclusion in its income for these years of certain sums on the g.round that
they represented income of the period before April 1, 1954 to which
the Act did not apply.
The controversy was in respect of certain sales
·Of coffee which, according to the company, took place in its accounting
years ending March 31, 1953 and March 31, 1954. The sales were to
the Coffee Board under s. 25 of the Coffee Act and as the company mainE
tained its accounts on the mercantile system the price \.Vas also entered
in the accounts at the time of the sale itself although it was received
later i.e. in the previous years relevant to the assessment years 1955-56
and 1956-57. The Appellate Assistant Commissioner of Agricultural Jn-
, come-tax and the Appellate Tribunal held that the income arose when
the price was received and thus upheld the inclusion of the income from
the aforesaid sales in the assessment for 1955-56 and 1956-57. Th0 company filed writ petitions in the High Court challenging the said assessF
ment;;.
A single judge decided in favour of the company and so did the
Division Bench.
The State of Kerala appealed by special leave to this
Court.
HELD : All Coffee which the Coffee Board obtains under the C,offee
Act is put in a pool and gets mixed up· with other coffee.
Coffee in the
pool is disposed of on behalf of the Coffee Board which pays only a proportionate price to the planter. Even though the planter does not actually
G
sell coffee to the Coffee Board there is in reality a sale by operation of
law as a result of which the planter ceases to be the owner of coffee
the moment he has handed over his produce to the Coffee Board.
The
fact that the price is received la1ter does not make it any the less a sale.
[99 R; 100 A-Bl
The system of accounting must make a difference as to the time when
the income arises. If it were a cash system income would be taxable when
H
actually received but in the mercantile system it would be taxable in the
year ih which the relevant entry is made
about the sale of the coffee
to the Coffee Board. [100 C]
"
. '
STATE v. BHAYANI TEA co. (Hidayatullah, ).)
93
A
B
The appellant company maintained its accoWlts on the mercantile svstem. When it handed over coffee to the Coffee Board it entered the price
of coffee accordmg to the valuation of the Coffee B.oard in its books of
account although it did not receive payment immediately.
The payment
for coffee handed over before April J, 1954 was recei\·ed after that date.
No doubt actual payment was received in the previOus years relevant to
the assessment years 1955-56 and 1956-57 but coffee was handed over to the
Coffee Board in the earlier years for which no tax could be demanded. The
High Court therefore rightly held that the income in question was not taxable
in the said. assessment years. [99 F-G; 101 A]
D
Puthuthotottam Estates (1943) Ltd . . v. Agricultural fncome-tax Off

## Text

9.2
STATE OF KERALA AND OTHERS
A
v.
BHAVANI TEA PRODUCE CO. LTD.
October 7, 1965
{P.
B.
GAJENDRAGADKAR,
C.J., K.
N.
WANCHOO,
B
M. HIDAYATULLAH, J. C. SHAH AND S. M. SIKRI, JJ.]
Madras Plantations Agricultural Income-tax Act, 1955 (as extended to
Kerala State) s. 3--Charge of income-tax on income of previous yearAccounts maintained on mercantile system-Coffee supplied to Coffee Board
under s. 25 of the Coffee Act, 1942 and price entered in accounts though
not received-Price received in next accounting year-Income 1vhcn accrues
C
-Sale when occurs-Whether in year of supply or year in l'.Jhich price
received.
Under s. 3 of the Madras Plantations Agricultural Income-tax Act, 1955
(as extended to Kerala State) income-tax was to be assessed in each financial
year on the income of an asses-see during the previous year.
"fhe first
assessment under the Act could be for 1955-56 so that income of any
period before April 1, 1954 could not be taxed under the Act.
The
D
respondent company was assessed for the years 1955-'56 and 1956-'57 on
its income of the relevant previous years.
The company objected to the
inclusion in its income for these years of certain sums on the g.round that
they represented income of the period before April 1, 1954 to which
the Act did not apply.
The controversy was in respect of certain sales
·Of coffee which, according to the company, took place in its accounting
years ending March 31, 1953 and March 31, 1954. The sales were to
the Coffee Board under s. 25 of the Coffee Act and as the company mainE
tained its accounts on the mercantile system the price \.Vas also entered
in the accounts at the time of the sale itself although it was received
later i.e. in the previous years relevant to the assessment years 1955-56
and 1956-57. The Appellate Assistant Commissioner of Agricultural Jn-
, come-tax and the Appellate Tribunal held that the income arose when
the price was received and thus upheld the inclusion of the income from
the aforesaid sales in the assessment for 1955-56 and 1956-57. Th0 company filed writ petitions in the High Court challenging the said assessF
ment;;.
A single judge decided in favour of the company and so did the
Division Bench.
The State of Kerala appealed by special leave to this
Court.
HELD : All Coffee which the Coffee Board obtains under the C,offee
Act is put in a pool and gets mixed up· with other coffee.
Coffee in the
pool is disposed of on behalf of the Coffee Board which pays only a proportionate price to the planter. Even though the planter does not actually
G
sell coffee to the Coffee Board there is in reality a sale by operation of
law as a result of which the planter ceases to be the owner of coffee
the moment he has handed over his produce to the Coffee Board.
The
fact that the price is received la1ter does not make it any the less a sale.
[99 R; 100 A-Bl
The system of accounting must make a difference as to the time when
the income arises. If it were a cash system income would be taxable when
H
actually received but in the mercantile system it would be taxable in the
year ih which the relevant entry is made
about the sale of the coffee
to the Coffee Board. [100 C]
"
. '
STATE v. BHAYANI TEA co. (Hidayatullah, ).)
93
A
B
The appellant company maintained its accoWlts on the mercantile svstem. When it handed over coffee to the Coffee Board it entered the price
of coffee accordmg to the valuation of the Coffee B.oard in its books of
account although it did not receive payment immediately.
The payment
for coffee handed over before April J, 1954 was recei\·ed after that date.
No doubt actual payment was received in the previOus years relevant to
the assessment years 1955-56 and 1956-57 but coffee was handed over to the
Coffee Board in the earlier years for which no tax could be demanded. The
High Court therefore rightly held that the income in question was not taxable
in the said. assessment years. [99 F-G; 101 A]
D
Puthuthotottam Estates (1943) Ltd . . v. Agricultural fncome-tax Officer,
·Coimbatore, 34 I.T.R. 765, Puthuthotottam Estates (1943) Ltd. v. Agricultural Income-tax Officer, 45 I.T.R. 87 & amalgamated Coffee
Estates
Ltd. v. State of Kera/a, 45 I.T.R. 353, referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos.
650
and 651 of 1964.
Appeals by special leave from the judgment and order dated
January 9, 1962 of the Kerala High Court in Writ Petitions Nos.
154 and 155 of 1961.
P. Govinda Menon and V. A. Seyed Muhammad, for the
appellants.
M. C. Seta/vad, O_ P. Malhotra, J. B. Dadachanji, 0. C.
Mathur and Ravinder Narain, for the respondent.
E
The Judgment of the Court was delivered by
Hidayatullah J.
These two appeals by special leave arise from
two petitions under Art. 226 of the Constitution in the High Court
of Kerala questioning the assessment to :Agricultural Income-tax
of Bhavani Tea Produce Co., Ltd. (respondent) under the Madras
F
Plantations Agricultural Income-tax Act, 1955 '(as extended to
Kerala State) for the assessment years 1955-56 and 1956-57 res-
•pectively.
The High Court decided that certain receipts were not
taxable in those assessment years and the State of Kera la is the
appeliant before us.
The assessment year in each case ended on
March 31, of the year and tax was leviable on the results of the
G
previous year. For the first of the two assessment years, corresponding to the previous year ended on March 31, 1955 the net
agricultural income was assessed at Rs. 1,32,198/- and a tax of
Rs. 45,443/1/- was demanded by the Department and in the
succeeding assessment year, corresponding to the previous year
ended on March 31, 1956, the amounts of net agricultural income
H
and the tax were respectively Rs. 1,24,339 and Rs. 42,810/5/-.
The assessee Company claimed that Rs. 97,090/- in the first year
and Rs. 10,095 /- in the second year were not taxable although
94
SUPREME COURT REPORTS
[1966] 2 S.C.R.
received by the company from the Coffee Board during the releA
vant accounting years.
The Company contended that these payments were in respect of coffee delivered by the Company to the
Coffee Board under s. 25 of the Coffee Market Expansion Act
1942, in the years 1952-53 and 1953-54, that is to say, prior to
April l, i 954 when the Madras Plantations Agricultural Income
Tax Act came into force and were not assessable, as the accounts B
were maintained· on the mercantile system and the amounts were
shown in 1952-53 and 1953-54.
This plea was not accepted by
the Agricultural Income-tax Officer, Coimbatore.
His assessment
orders are dated May 18, 1956 and July 15, 1957 respectively.
The Company appealed, but the Appellate Assistant Commissioner C
by orders passed on December 19, 1958 dismissed the appeals. The
Company appealed further.
By a common order dated January
25, 1960 the Agricultural Income Tax Appellate Tribunal dismissed the appeal in respect of the assessment year 1955-56.
Jn
the other appeal the conclusion was the same but the case had to be
remanded to ascertain some matters not connected with the present D
controversy.
In both the cases the Department had held that the
income was derived in the relevant previous year and this opinion
was upheld by the Appellate Tribunal.
The Appellate Tribunal
observed that "amounts actually received in the 'previous year' as
the price of coffee from the plantation should be regarded as income
derived from the plantation in that. year irrespective of the year to E
which the crop belongs." The Company did not apply for revision under s. 54 of the Agricultural Income Tax Act, but instead
filed petitions under Art. 226 of the Constitution against Agricultural Income-tax Officer, Coimbatore, Appellate Assistant Commissioner of Agricultural Income-tax, Kozhikode and Agricultural
Income-tax Appeflate Tribunal, Trivandrum.
The petitions were F
heard by Mr. Justice Vaidialingam who accepted the contention of
the assessee company and cancelling the assessment orders impugned before him directed the Agricultural Income-tax Officer to make
a reassessment of the total income excluding the sums of
Rs. 97,090/- in the first year and Rs. 10,095/- in the second year.
The judgment was pronounced on August 18, 1961. The G
State of Kerala and the Agricultural Income-tax Officer appealed
under the Letters Patent.
The appeal was summarily dismissed on
Janiiary 9, 1962. It is from this judgment that the present appeals
have been filed.
The only question is whether the two amounts were rightly exH
eluded from the assessable Agricultural income for the two assessment years.
The answer to this question depends on whether
,
.
'
7
STATE v. BHAYANI TEA co. (Hidayatu/lah, J.)
9 5
A
under the scheme of the Madras Plantations Agricultural Income
Tax Act read with the scheme of the Coffee Act it can be said that
the income was only received when the payment was received or
when the produce was handed over to the Coffee Board and under
the mercantile system of accounting it was entered in the books of
account of the assessee company. If the answer is that income
iJ
was received when the crop was handed over to the Coffee Board
and the entry was made in the books of account under the mercantile system, the judgment under appeal must be considered to be
right but if it is the other way, then the action of the Department
was correct. We shall now consider this question.
Before we proceed we shall analyse the provisions of the two
Acts with which we are concerned.
The Madras Plantations
Agricultural Income Tax Act consists of 65 sections.
It is not
necessary to give a full analysis of that Act.
For our purpose
it is sufficient to refer to some of the provisions only. Section 2
·n defines "Agricultural income", inter alia, as any income derived
from a plantation in the State and Explanation II says that Agricultural income derived from such plantation by the cultivation
of coffee means ·that portion of the income derived from the cultivation, manufacture and sale of coffee as may be defined to be
agricultural income for the purpose of the encatments relating to
E Indian Income-tax Act. "Plantation" in the Act means any land
used for growing certain crops including coffee.
Section 3 lays
charge of agriculutral income-tax and for our purpose we need
read only the first sub-section. It is :
"3. Charge of agricultural income-tax.
;F
(I) Agricultural income-tax at the rate or rates
specified in Part I of the Schedule to this Act shall be
charged for such financial year commencing from the 1st
April 1955 in accordance with and subject to the provisions of this Act, on the total agricultural income of the
previous year of every person.
(2)
,,
Section 4 defines "Total agricultural income" as the total agricultural income of any previous y~ar of any person from a plantation
situate within the State.
We are not concerned with the other
sections. Some deal with the computation of agricultural income,
H the expenses which may be deducted, the method of accounting,
exemption from the tax under the Act and computation and carrying forward of loss. Some others establish Income-tax Authorities,
96
SUPREME COURT REPORTS
(l 966] 2 S.C.R.
Appellate Tribunal and provide generally how returns of assessA
ment should be made and sundry matters which have no relevance
here. It is thus clear that the income, which is sought to be taxed
was the kind of income which is taxable under the Act. This
in~ome was derived from coffee grown on a plantation situated
w1thm the State and the only question is in which year the income
can be said to be received by the assessee company.
B
To ascertain this we have to turn to the provisions of the
Coffee Market Expansion Act of 1942 because the sale of coffee
"""
was not made directly by the assessee but by a Board established
under the Coffee Market Expansion Act. That Act replaced an
Ordinance of the Governor-General (Ordinance No. 30 of 1940) c
passed to assist the coffee industry by regulating the export and
sale of coffee.
As a result of the outbreak of the Second World
War Indian coffee had lost some of its important foreign markets
and there arose a great slump in the price of coffee.
A Coffee
Control Conference convened to co~~ider the situation, suggested
steps that could be taken to save the coffee industry in India. Its
D
recommendations led to the passing of the Ordinance of 1940.
A second Coffee Control Conference was held in 1941 and after
its recommendations were considered by the Standing Advisory
Committee of the Legislature attached to the Commerce Department, the present Act was passed. This Act has been frequently
amended and today it is called the Coffee Act after the amendment
E
of its title in 1954. We have referred, and shall refer, to it by
.i/i
... ·
this name. The Coffee Act constituted a Board which was known
as the Indian Coffee Market Expansion Board, now called the
Coffee Board. The Coffee Board is a body corporate (having perpetual succession and a common seal) with power to acquire and
hold property, both movable and immovable and to contract ( s. 5). F
The Coffee Act imposes a duty of customs on all coffee produced
in India and exported from India ( s. 11 ) and a duty of excise on
all coffee which an estate registered under s. 14 is permitted, under
a scheme of internal sale quota allotted to it, to sell in the Indian
market, whether such coffee is actually sold or not, and on all
coffee released for sale in India by the Coffee Board from its surG
plus pool ( s. 12). The proceeds of these duties (though first
credited to the Consolidated Fund of India) may be paid to the
Coffee Board and when so paid are credited to a General Fund
,-
( s. 13). All owners of coffee es.,ates of not less than 10 acres
"'
are required to register with a Registering Officer appointed in this
behalf by the State Government and the registeration once made
H
continues till it is cancelled ( s. 14). The Central Government
fixes the price or prices at which coffee may be sold wholesale or
•
STATE v. BHAVA_NI TEA co. (Hidayatul/ah, !.)
97
A retail in the Indian Market and no registered owner or licensed
curer or dealer can sell coffee wholesale or retail in the Indian
market at a price or prices higher than the price or prices fixed
by the Central Government ( s. 16). Section 1 7 next provides :
B
c
"17. Sale of coffee in excess of internal sale quota.
No registered owner shall sell or contract to sell in
the Indian market coffee from any registered estate if by
such sale the internal sale quota allotted to that estate is
exceeded nor shall a registered owner sell or contract to
sell in the Indian market any coffee produced on his
estate in any year for which no internal sale quota is
allotted to the estate."
The internal sale quota is fixed by s. 22. Under that section the
Coffee Board allots to each registered estate an internal sale quota
for the year.
Unless with the previous sanction of the Central
Government the Coffee Board decides that no internal sale quota
D shall be allotted, the Board allots to each registered estate an internal sale quota for the year. The internal sale quota is a fixed percentage, common to all registered estates, of the probable total
production of the estate in the year as estimated by the Board.
For the purpose of fixing the quota the registered owner is required
to furnish such returns as the Board may demand. The surplus
E pool to which we have referred means the stock of coffee accumulated by the Board out of the ammmts delivered to the Board
under s. 25. That section is a long section of six sub-sections and
they need to be carefully considered. It provides that all coffee
produced by a registered estate in excess of the amount specified
in the internal sale quota allotted to that estate shall be c
~livered
F
to the Coff~e Board by the owner of the estate for inclusion in
the surplus pool.
( sub-s. 1). Delivery of coffee must be made
to the Coffee Board in such places and at such times and in such
manner as the Coffee Board may direct and the Coffee Board may
give directions for partial delivery to the surplus pool ? t any time
whether the internal sale quota has been exceeded or not and the
G Coffee Board may reject any defective consignment ( sub-s. 2).
Coffee delivered to the Coffee Board for inclusion in the surplus
pool must represent fairly in kind and quality the produce of the
estate, and such coffee remains under the control of the Coffee
Board and the Coffee Board is responsible for its storage, curing
(when necessary) and marketing (sub. s. 3). The Coffee Board
H
must prepare, from time to time, a differential scale for the valuation of such coffee. In accordance with that scale the Coffee Board
must classify each consignment delivered for inclusion in the surplus
98
SUPREME COURT REPORTS
[1966] 2 S.C.R.
P?Ol and make an assessment of its value based on its quantity,
kind and quality ( sub-s. 4). Sub-section ( 5) is not material Sub·
section ( 6) then provides as follows :-
"25. Surplus coffee and surplu.~ pool
( 6) When coffee has been delivered or is treated as
having been delivered for inclusion in the surplus pool,
the registered owner whose coffee has been so delivered
or is treated as having been so delivered shall retain no
rights in respect of such coffee except his right to receive
the payments referred to in section 34."
Section 34, which is here referred to, reads :
"34. Payments to registered owners.
The Board shall at such times as it thinks fit make
to registered owners who have delivered coffee for inclusion in the surplus pool such payments out of the pool
fund as it may think proper.
(2) The sum of all payments made under sub-sec·
tion ( 1 ) to any one registered owner shall bear to the
sum of the payments made to all registered owners the
same proportion as the value of the coffee delivered by
him oui of the year's crop to the surplus pool bears to the.
value of all coffee delivered to the surplus pool out of that
year's ~rop :
Provided that in calculating the sum of all payments
made under sub-section ( 1) and the value of the coffee
delivered to the surplus pool out of the year's crop, respectively, any payment accepted by a registered owner as
final payment in immediate settlement for coffee delivered by him for inclusion in the surplus pool and the value
of any such coffee shall be excluded."
A
B
c
D
E
F
G
We may refer to one other section and that is section 3 3 which
confers on the Board power to borrow on the security of the coffee
so delivered. It reads as follows :-
"33. Power to borrow.
The Board may, subject to any prescribed conditions
borrow on the security of the general fund or the pool
fund for any purposes for which it is authorised to expend
money from such fund, or on the security of the coffee
H
•
STATE v. BHAYANI TEA co. (Hidayatullah, J.)
99
A
delivered or treated as delivered for inclusion in the surplus pool for any purposes for which it is authorised to
expend money from the pool fund."
The failure to register, contravention of s. 25, making of a false
return, obstruction and contravention of the other provisions of
B the Coffee Act, some of which we have not found necessary to
mention here, are constituted offences and there is provision for
punishment and penalty. The Coffee Board is also given the power
to seize coffee withheld from inclusion in the surplus pool.
In
this way, the marketing of coffee is made the duty of the Coffee
Board and the right of a party who .has made contributions to the
C surplus pool is merely to receive payment for coffee which is handed over. The quantum of payment is determined, at first according
to the differential scale of valuation prepared by the Coffee Board.
It must be remembered that under s. 34(2) the payment is in the
proportion which the value of coffee delivered by the owner bears
to the value of all coffee delivered to the surplus pool out of one
D year's crop. But an owner need not wait and may accept an immediate settlement for his coffee. It follows that coffee delivered
to the Coffee Board becomes the property of the Board no sooner
it is delivered. The Coffee Board can borrow money by pledging
it and is not required to return any part of that coffee to the producer. It only sells it and gives to the planter price proportionate
E
to the value of all coffee in the surplus pool for that year, unless
the planter settles for an immediate payment.
The appellant Company maintains its accounts on the mercantile system. When it handed over coffee to the Coffee Board
it entered the price of the coffee according to the valuation of the
F
Coffee Board in its books of account although it did not receive
payment immediately because as has been shown above the payment is delayed unless immediate settlement is made. The payment for coffef! handed over before April I, 1954 was received
after that date.
No doubt actual payment was received in the
previous years relevant to the two assessment years, but coffee was
G
handed over to the Coffee Board in the earlier years for which no
tax could be demanded. Was there a sale to the Coffee Board ?
The answer must be in the affirmative. The Coffee Board is neither
a trustee nor even an agent of the planter. It is not accountable
to the owner, except as to payment for coffee received and valued
according to the differential prices. All coffee which the Coffee
H
Board obtains under the Coffee Act is put in a pool and gets mixed
up with other coffee. Coffee in the pool is disposed of on behalf
of the Coffee Board. The Coffee Board only pays a proportionate
100
~UPREME COURT REPORTS
[1966] 2 S.C.R.
price to the planter .. Even though the planter does not actually
A
sell coffee to the Coffee Board there is in reality a sale by operation
of law as a result of which the planter ceases to be the owner of
coffee the moment he has handed over his produce to the Coffee
Board. He is then entitled to receive payment and is not concerned any more with his coffee. The unsold coffee is not returned to
him and he does not enjoy any rights of ownership in it. The
B
Coffee Board can pledge it and sell it as and when it likes.
In
these circumstances it is plain that the handing over of coffee by
the plantvr amounts to a sale to the Coffee Board and the payment
of the prl.ce is from the sale of all the coffee in the surplus pool
unless the planter settles for immediate payment. The system of
Account must make a difference. If it were a cash system income
C
would be taxable when actually received but in the mercantile
system it would be taxable in the year in which the relevant
entry is made about the sale of coffee to the Coffee Board.
We were referred to some rulings of the
Madras and the
Kerala High Courts. Jn Puthuthottam Estates ( 1943) Limited v.
D
Agricultural Income-Tax Officer, Coimbatore,(') Rajagopalan J.
held that there was nothing in the Madras Plantations Agricultural
Income-tax Act or the Rules thereunder, which exempted pn)duce
gathered earlier than 1st April, 1954 from taxation if payment
was received in any previous year relevant to an assessment year
under the Madras Plantations Agricultural Income-tax Act.
The E
judgment of Rajgopalan J. was reversed on appeal in Puthuthottam
Estates (1943) Ltd., v. Agricultural Income-Tax Officer( 2 ).
Rajarnannar C.J., and Jagadisan J. held that, if the sale took
place after 1st April 1954, tax was payable no matter if the
produce was of an earlier year but if the sale took place earlier
than that date, tax would not be payable even if the price was
re.alized later.
In the Kerala High Court distinction was made
between entries under cash and mercantile systems of bookkeeping.
In Amalgamated Coffee Estates Ltd. v.
State of
Kera/a(') the assessee followed the mercantile system and payments entered in the accounting period April 1, 1953 to March
31, 1954 were held not taxable even though actually received
G
after April 1, 1955. The reasoning in these two cases is the same
F
as in this judgment. Jt is, therefore, not necessary to refer to
them.
The judgment under appeal follows the earlier decision
of the same Court and the Divisional Bench decision of the
Madras High Court, and in our opinion the High Court have
taken the right view of the matter.
(1) 34 I. T. R. 764.
(2) 45 I. T. R. 87.
(3) 45 I. T. R. 353.
H
STATE v. BHAYANI TEA co. (Hidayatullah, J.)
101
A
The High Court was thus right in holding that there was no
sale in the years relevant to the assessment years for which the
tax demanded.
The sale had taken place in the earlier years over
which the Agricultural Income-tax Act did not operate.
The
appeals will therefore be dismissed with costs.
One set of
B hearing fees.
Appeals dismis~ed.