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2017 (11) TMI 529 - HC - VAT and Sales TaxConstitutional validity of Section 2(11) of the Port Trust Act - tax on sale of goods - scope of the term 'Dealer' - Petitioner's main contention in the Writ Petition is that the sale of goods by the Petitioner is in pursuance of their statutory functions under the Port Trusts Act and these sales are not executed by the Petitioners as a matter of business for commercial enterprise but by way of administering and managing the port of Bombay. The Petitioner has accordingly submitted that they are not carrying on any business of buying or selling goods. The Petitioner has accordingly contended in the Petition that they are not entitled to pay tax on the sale of goods effected by them under the said Act. Held that: - This Court has in the case of Controller of Stores, Central Railway, Bombay Vs. The Commissioner of Sales Tax, Maharashtra State [1995 (2) TMI 374 - BOMBAY HIGH COURT] considered the challenge to the inclusion of entities in the definition of “dealer” both amended by Section 2(11) of the said Act and Section 2(8) of the MVAT which is pari materia. It was held in the case of Controller of Stores that the Explanation to Section 2(11) of the said Act which had included “Railway Administration” in “dealer” has been held to be clarificatory and that Indian Railways represented by the Controller of Stores is a dealer. - It is clear from the deeming fiction brought in by the explanation that all these entities are now within the definition of “dealer” irrespective of whether they carry on business. - the Port Trust falls within the definition of dealer and is liable to sales tax under the said Act. The judgment of the Supreme Court in M/s Cochin Port Trust Versus State of Kerala [2015 (4) TMI 936 - SUPREME COURT] holds the field, where it was held that the activities of the assessee in respect of buying, selling, supplying or distributing goods, executing works contract, transferring the right to use any goods or supplying by way of or as part of any service, any goods directly or otherwise, whether for cash or for deferred payment or for commission, remuneration or other valuable consideration, whether in course of business or not, would fall within the purview of Section 2(viii) of the Act. Hence, the assessee-Port Trust would fall within the meaning of "dealer" under Section 2(viii) of the Act and is consequently assessable to tax under the Act The legislature having greater latitude for classification in taxing statute was competent in amending Section 2(11) of the said Act and thus there is no merit in the challenge to the constitutional validity of Section 2(11) of the said Act. Petition dismissed - decided against petitioner.
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