TMI Blog2013 (10) TMI 1166X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the definition of the word "sale" in section 4 of the Sale of Goods Act, 1930. Further, when charge or pledge is enforced that enforcement is by way of sale of the pledged or hypothecated goods; that sale is for consideration and, therefore, it falls within the ambit of section 2(xxi) of the 1963 Act - Decided against assessee. - W. P. T. T. No. 6 of 2011, W. P. T. T. No. 24 of 2010, W. P. T. T. No. 4 of 2011 - - - Dated:- 8-10-2013 - Girish Chandra Gupta And Tarun Kumar Das,JJ. For the Appellant : Mr. J. P. Khaitan, Adv.,Mrs. Nilanjana Banerjee (Pal), Adv.,Ms. Soumitra Dutta, Adv. Mr. Avra Majumder, Adv. For the Respondent : Mr. Jaydip Kar, Adv.,Mrs. Seba Roy, Adv. JUDGMENT Girish Chandra Gupta J. All the three writ petitions were filed challenging a common judgment and order dated 16th April, 2010 passed by the learned West Bengal Taxation Tribunal. The learned Tribunal held as follows:- In view of the discussions contained hereinabove we hold that ICICI Bank is a dealer and covered by main part of the definition of the dealer in the VAT Act, as the disputed sales are in course of its banking business and such sales were/are effected in exercise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion has to be construed strictly. If a person has not been brought within the ambit of the charging section by clear words, he cannot be taxed at all (Please see Commissioner of Wealth Tax v- Ellis Bridge Gymkhana, (1998) 1 SCC 384 Para 5 page 84 at 87 of compilation). 5. The definition commences with the expression dealer means .. and thereafter proceeds to expand its coverage by using the expression and includes . By certain inclusions vide sub-clauses (a), (b), (c) and (d), which would not have otherwise fallen within the opening part of the definition. The use of the expressions means and includes in the definition makes it exhaustive (Please see Bharat Co. op Bank (Mumbai) Ltd., -v- Coop. Bank Employees Union, (2007) 4 SCC 685) Para 23- page 72 at 82 compilation. And for the same view (1989) 1 SCC 164 para 11; 1995 SUPP (2) SCC 348 para 19; (2007) 5 SCC 281 para 33; (2007) 5 SCC 730 para 8. The contra view in 1993 Supp (3) SCC 361 para 12 was rendered without noticing the prior decision in (1989) 1 SCC 164). OPENING PART OF DEFINITION APPLIES ONLY TO OWNERS 6. The opening part of the definition only covers persons who deal with the goods a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NDER SUB-CLAUSE (d) 11. The Tribunal fell into error in holding that the petitioner NBFC fell within the ambit of sub-clause (d) as factor or mercantile agent since the sales of the vehicles were arranged on the strength and authority derived from the hypothecation agreement and the irrevocable power of attorney executed by the borrower. 12. A factor only buys or sells for a commission (Please see Black s Law Dictionary, 9th Edition page 30 at 31 of compilation and Words and Phrases Legally Defined, 4th Edition page 32 at 33 of compilation). The petitioner NBFC does not receive any commission and is not a factor. 13. A mercantile agent to fall within the ambit of sub-clause (d) must be one- (i) who carries on the business of selling goods and (ii) who has in the customary course of business, authority to sell goods belonging to principals. 14. For the purposes of sub-clause (d), the business of the mercantile agent, evidenced by volume, frequency, continuity and regularity of transactions, must be that of selling goods belonging to principals, such that it must be customary in the course of such business that the mercantile agent has authority to sell goods belongin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent is liable to be treated as a dealer irrespective of the requirements of sub-clause (d) of Section 2(11). 19. The judgment of the Supreme Court in Federal Bank Ltd. v- State of Kerala, (2007) 6 VST 736 (SC), dealt with the amended definition of dealer in Section 2(viii) of the Kerala Act which included a bank or a financing institution. The only controversy before the Supreme Court in that case was as to whether the sale of pledged assets by the bank was in the course of banking business. 20. The Supreme Court in Government of Andhra Pradesh v- Corporation Bank, (2007) 6 VST 755 (SC), held that a bank selling gold pledged as security for the loan was not a dealer prior to the amendment of the definition in Section 2(1)(e) of the Andhra Act with effect from August 1, 1996 whereby banks were included. Mr. Kar, learned advocate appearing for the department disputed the submissions of Mr. Khaitan. He also relied upon the judgment in the case of Federal Bank Ltd. v- State of Kerala reported in 2007 (6) VST 736 (SC) for the proposition that the sale of the vehicles by the bank is in course of its business under the Banking Regulation Act, 1949. The question which falls for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The submission in paragraph 8 of the written notes is not correct according to us. The bodies and organizations indicated in Clause (b) were sought to be roped in irrespective of whether they sell or supply or distribute goods directly or otherwise whether in the course of business or not. Neither a liquidator nor a receiver can be expected to sell any goods as the owner thereof. The distinction sought to be made by the learned Counsel as regards the owner and non-owner of the goods was, according to us, not contemplated by the legislature. The submission contained in paragraph 9 of the written notes of argument is fallacious according to us. Our attention was not drawn to any authority binding or otherwise to show that the natural meaning of the word used by the legislature can be ignored for the purpose of applying the theory of ejusdem generis in construing an act. The word used in Clause (b) particularly the word a trust does not appear nor was shown to have anything in common with the preceding word a statutory body. Similarly the word body corporate was not shown to have any common characteristic with the preceding word trust . The theory of ejusdem gener ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dictionary meaning has to be applied. Admittedly, both the bank and the non-banking financial corporations have obtained irrevocable Power of Attorney from the borrowers. It would appear from paragraph 11 of the written notes that such Power of Attorney has been obtained for the purpose of selling the vehicles. The meaning of the expression Power of Attorney as per Oxford Dictionary is as follows:- the authority to act for another person in legal or financial matters . There is, thus no scope to entertain any doubt as regards the fact that the petitioners have themselves reduced their position to that of an agent. When they are acting on the basis of Power of Attorney it cannot lie in their mouth to say that they are not the agents of the borrowers. We are, however, conscious of the fact that the lenders in exercise of their right as the hypothecatees sell the vehicles for the purpose of realization of their dues. But an element of agency is certainly involved in the facts of the case. An element of trust is also involved therein. An agent is a constructive trustee. Any amount received in excess of the dues of the agent has to be held by him for the benefit of the borrower. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealer. Explanation 2. - A factor, a broker, a commission agent, a del credere agent, an auctioneer, an agent for handling or transporting of goods or handling of document of title to goods or any other mercantile agent, by whatever name called, and whether of the same description as hereinbefore mentioned or not, who carries on the business of selling goods and who has, in the customary course of business, authority to sell goods belonging to principals is a dealer. From a comparison of the definition of the word dealer from the aforesaid act and the Bengal Finance Sales Tax Act 1941 it would appear that the definition appearing in the aforesaid act is substantially the same. Their Lordships in paragraph 8 of the judgment opined as follows:- In my judgment, the scheme of the Act leaves no room for doubt that an agent who sells goods on behalf of somebody else cannot escape the liability to pay sales tax on the sales made by him for and on behalf of others merely because, he was selling goods on behalf of others. The charge under section 6B has been imposed directly upon him by the broad definition of dealer . We agree with Mr. Khaitan that the judgement in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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