G. SIVARAJAN, J. -
(1.) THE matter arises under the Kerala General Sales Tax Act, 1963 (for short "the Act" ). THE assessee is the revision-petitioner. THE Revenue is the respondent. THE assessment year is 1986-87. THE petitioner, his wife and children had purchased a total extent of 47 acres of rubber plantation on September 16, 1986 as per seven registered documents. Subsequently, on October 22, 1986 the petitioner, his wife Smt. C. K. Sabira, his mother-in-law Smt. N. R. Sainabi had jointly executed an agreement with a partnership firm M/s. United Charcoal Dealers for slaughter tapping and clear felling of the rubber trees from the said plantation which were ripe for slaughter tapping and clear felling. THE consideration shown in the agreement was a sum of Rs. 13,32,500. THE period for slaughter tapping and clear felling was up to September 30, 1990.
(2.) THE first respondent the Assistant Commissioner (Assessment) II, Special Circle I, Calicut, issued a pre-assessment notice to the petitioner proposing to assess the sale value of timber at 80 per cent of the total consideration shown in the agreement. THE petitioner filed objection stating that though the agreement was a single one the same was in respect of a rubber plantation owned by seven persons as per separate sale deeds obtained in their favour. It was also stated therein that each owner had sold the rubber trees standing in their separately demarcated properties. THE details were also furnished (annexure III ). It was also contended that since each individual share is defined and ascertained and each one is a separate entity, if at all any tax is exigible on the transaction the same has to be assessed separately at the hands of each of the owners. THE assessing authority included the entire value of timber estimated in the assessment for the year 1986-87 as a single unit treating them as an association of persons. Being aggrieved by the said order the petitioner filed appeal before the Deputy Commissioner (Appeals), Agricultural Income-tax and Sales Tax, Kozhikode. THE said appeal was dismissed as per order dated November 13, 1991 (annexure V ). THE petitioner filed second appeal before the Sales Tax Appellate Tribunal, Additional Bench, Kozhikode. THE said appeal was also dismissed.
The petitioner had raised the following questions of law : " A. Whether the Appellate Tribunal is entitled to uphold the action of an assessing authority based on totally different grounds than what was relied upon by the assessing authority as well as the first appellate authority ? B. Whether the Appellate Tribunal is justified in holding that annexure I agreement does not show that the properties belong to seven individuals when the assessing authority had no such case at all and when based on the same agreement, the agricultural income of the petitioner was assessed clubbing the income of the wife and minor children under section 9 (2) of the Agricultural Income-tax Act by the assessing authority as evidenced by annexures VI and VII ? C. Whether, on the facts and circumstances of the case, the Appellate Tribunal is justified in holding that annexure I agreement does not show that Smt. C. K. Sabira, represented the minor children when the original title deeds relating to the purchase of properties show that she was acting as the guardian of the minor children ? D. Whether, on the facts and circumstances of the case, the Appellate Tribunal is justified in upholding the assessment on the ground that the possibility that the executants of the agreement owning other portions of the estate cannot be ruled out when the lower authorities had no such case, especially in the light of annexures VI and VII orders ?"
We have heard Sri. P. Raghunath, learned counsel appearing for the petitioner and Sri. Raju Joseph, learned Special Government Pleader (Taxes), for the respondent. The rubber plantation having an extent of forty-seven acres was purchased in the name of the petitioner, his wife and children and the right to slaughter tapping and clear felling the trees from the said plantation was given to a partnership firm as per agreement dated October 22, 1986 (annexure I ). The executants of the said agreement are the petitioner, his wife and one Smt. C. K. Sabira. It is stated that Smt. Sabira is the grand mother of the petitioner's minor children. According to the petitioner the said plantation was purchased by the petitioner, his wife and minor children as per separate sale deeds and that the properties belonging to all the seven persons are separately identified and therefore seven separate assessments under the Act are contemplated. The assessing authority took the view that the petitioner, his wife and children cannot be given the status of tenants-in-common in respect of these plantations and since the agreement is executed between the dealers and M/s. United Charcoal Dealers the transaction has been viewed as a solitary one. He also noted that there is no evidence on record to prove that there was demarcation and separate possession of the plantation by several owners. He further took the view that the agreement would show that the dealers have jointly agreed to sell the trees to M/s. United Charcoal Dealers and authorised the petitioner to receive the consideration. The first appellate authority noted that the assessing authority had asked the appellant to produce the accounts for verification for fixing the liability under the Act and that the petitioner did not produce any such accounts and therefore the assessing authority had fixed the turnover at 80 per cent of the total consideration received at Rs. 10,66,000. The appellate authority observed that the said fixation is reasonable. The appellate authority also noted that these seven registered documents were not produced before the assessing authority and further observed that those documents are not necessary to be considered for the assessment in question. The first appellate authority further observed that the assessment was completed in respect of the transactions evidenced by the agreement dated October 22, 1986, that as per the said agreement the three persons mentioned therein had sold the rubber trees in the estate which is owned and possessed by them and the assessing authority had estimated the turnover of sale of rubber trees at Rs. 10,66,000 in the absence of accounts. Before the Tribunal, it is contended that there is a partnership concern of the signatories of the first part to the agreement dated October 22, 1986 and that the petitioner is the managing partner. It was also stated that party Nos. 1 and 2 to the agreement dated October 22, 1986 were having right over the properties independently and party No. 3 was acting as guardian of minors, who were also independently possessing properties as per registered documents. On the basis of the above it was contended before the Tribunal that the sale value of rubber trees should have been assessed on each individual separately and ought not have made the assessment on P. P. C. Kuttihassan Haji and others. Here, it must be noted that the assessee had not produced any evidence to show that there exist a partnership between the petitioner, his wife and his mother-in-law, who are the signatories of the agreement. That apart, even if there exist a partnership the transaction covered by the agreement has only to be treated as one effected by a single unit either, the partnership or the three persons as an association of persons. This is particularly in view of the fact that though the property in question was purchased as per seven separate documents in the names of the petitioner, his wife and his minor children there is no material on record to show that each one was enjoying the property separately and there is also nothing to show that the wife and the minor children had any source for purchase of the property in their name. In the absence of those details according to us, the authorities and the Tribunal were justified in making the assessment in respect of the income obtained as per agreement dated October 22, 1986 as a single unit in the name of an association of persons.
(3.) IN view of the fact that the sale of the rubber trees was not in the course of carrying on of the business, the transaction in question is liable to be assessed under the Act treating them as a casual trader. For casual traders there is no non-taxable limit. IN other words, the entire turnover is liable to be assessed to tax. Thus even if three or more separate assessments are to be made the entire sale value of timber will have to be assessed to tax. The only benefit that the petitioner is likely to get in case it is held that separate assessments have to be made is that the assessment of the turnover which can be attributed to the other owners will get time barred. As we have already noted, the authorities and the Tribunal had rightly assessed the entire turnover at the hands of an association of persons.
Though the questions on which notice is ordered appear to have only a limited scope regarding the question of separate assessments, the counsel had made a submission that the adoption of 80 per cent of the amount received under the agreement dated October 22, 1986 representing the timber value is erroneous and unsupported by any material. The counsel had also placed before us the orders passed by the assessing authority under the Agricultural Income-tax Act (annexures VI, VII and VIII) and also the orders in the appeals for the assessment year 1987-88. He submitted that the Agricultural Income-tax Officer had adopted 60 per cent of the total consideration received as agricultural income and balance 40 per cent alone was treated as timber value. He further submitted that this was confirmed in appeal by the two appellate authorities. Though no specific question is raised in regard to the adoption of the timber value by the assessing authority, having regard to the fact that with respect to the very same amount received under the agreement dated October 22, 1986 the assessing authority under the Agricultural Income-tax Act had adopted 60 per cent as agricultural income from slaughter tapping and only 40 per cent was treated as the income from timber and that this order was affirmed by the two appellate authorities, if the orders of the assessing authority under the Sales Tax Act and under the Agricultural Income-tax Act are allowed to stand there will certainly be inconsistency regarding the timber value adopted with respect to the same agreement. That apart, we find that the proportion adopted by the Agricultural Income-tax Officer appears to be reasonable, for, under the agreement approximately four years period is granted for slaughter tapping and clear felling which would mean that the agricultural income from slaughter tapping would represent a major part of the consideration.;