TMI Blog2015 (4) TMI 936X X X X Extracts X X X X X X X X Extracts X X X X ..... rrying on business to be placed under the definition of “dealer” is absent. The definition expressly includes the persons who whether in course of business or not engage in the sale or transfer of goods and thus, does not mandate the requirement of conducting business for a person to be exigible under the Act. The contradistinction between the definition of “dealer” under the TN Act and the Act makes it abundantly clear that the observations of this Court in Madras Port Trust case, which refer to the definition of TN Act and interprets it to reach the conclusion of the Trust not being exigible to tax, cannot be accepted in the instant case. It is further pertinent to notice that the TN Act was amended by Act 22 of 2002 whereby explanation (3) was added to definition clause 2(g) of the TN Act. By the said amendment the Madras Port Trust has now been declared as a dealer under the TN Act. Explanation (3) states that if the port trust disposes of any goods including unclaimed or confiscated or unserviceable or scrap surplus, old or obsolete goods or discarded material or waste products whether by auction or otherwise directly or through an agent for cash or for deferred payment or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registered dealer under the Act and an assessee on the rolls of the Assistant Commissioner (Assessment), Commercial Taxes, Special Circle, Mattancherry. The assessee s specific activity of dealing in scrap items (sales of water to ships, tender forms, firewood, waste paper and disposal of unserviceable equipment) is the subject matter of assessments in the instant appeal for the assessment years 1990-91, 1994-95 and 1997-98. 4. For the aforesaid assessment years, the assessing authority had raised demand notices under the Act for the sales of scrap items effected by the assessee vide assessment orders dated 18.11.1995, 31.03.1999 and 24.10.2001, respectively. 5. The assessee aggrieved by the said assessment orders had approached the Deputy Commissioner (Appeals) in first statutory appeal. The assessee had assailed the assessment orders as illegal and unauthorised on the ground, inter alia, that it is not engaged in any trading activity and only discharging its statutory functions under the Major Port Trust Act, 1963 and hence, it is not a dealer under the Act and cannot be exigible to tax thereunder. The first appellate authority has disposed of the said appeal by separate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t which was the cardinal issue before the Tribunal was agitated before the High Court as the main issue by both parties to the lis. The High Court has delved into the said question and also considered whether the Madras Port Trust case decided in the context of the TN Act apply to the assessee-Trust which is governed by the Act. The High Court, in its conclusion, has approved the findings of the Tribunal and dismissed the tax revision(s) filed by the appellant-assessee. 9. Aggrieved by the aforesaid, the assessee is before us in this appeal. 10. Shri V. Giri, learned senior counsel appearing for the appellant-assessee would submit that the assessee does not fall under the ambit of under Section 2(viii) of the Act and cannot be termed as a dealer . He would submit that the assessee is only discharging the statutory functions and is not engaged in any business or trade. Further, that the transactions in question being incidental and auxiliary would not qualify as business under the Act so as to deem the assessee as dealer under the Act. He would draw support from the observations of this Court in Madras Port Trust case wherein this Court has held that the said Port Trust c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration; (2) transfers property in goods (whether as goods or in some other form) involved in the execution of a works contract; (3) delivers any goods on hire-purchase or any system of payment by instalments; (4) transfers the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration; (5) supplies, by way of or as part of any service or in any other manner whatsoever, goods, being food or any other articles for human consumption or any drink (whether or not intoxicating), where such supply or service is for cash, deferred payment or other valuable consideration; Explanation.-(1) (2) ... (g) a bank or a financing institution which, whether in the course of its business or not, sells any gold or other valuable article pledged with it to secure any loan, for the realisation of such loan amount;... (emphasis supplied) 14. A perusal of the aforesaid definition would indicate that definition of dealer under the Act is an inclusive definition whereby wide range of persons has been placed under the ambit of dealer . It includes persons involved in carrying on any business or trading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use (f) includes a society, club, firm or an association or body of persons, whether incorporated or not. Explanation 2 includes the Central Government, State Government and any of its apparatus within the scope of this section. 35. Therefore, given the exceptionally wide scope of the definition, prima facie, it can be concluded that any person or entity that carries on any activity of selling goods, could be categorized as a dealer under the Act, 1963. To test the aforesaid conclusion in the context of the issue at hand, we would delve into the interpretation ascribed by this Court to the term dealer . A careful reading of the definition of dealer under the Act, 1963, would make it evident that the legislature intended to provide for an inclusive criterion and broaden the ambit of the said classification. The legislature did not propose to restrict the scope of the term as perceived in common parlance. 16. Here, since the definition of dealer is wide to include transactions conducted in the course of business or otherwise, to answer the question posed before us, we do not deem it necessary to examine the nature of activity carried out by the assessee-Port Trust in as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act, 1963. This Court has noticed that port trusts are not established for carrying on business and thereafter, referred to the various activities of the Madras Port Trust and observed that its activities and services only indicate that the activity in question, that is, the sales of unserviceable or unclaimed goods is infinitesimal as compared to the very large range of the activities and services it is supposed to render. This Court has therefore concluded that the Madras Port Trust is not involved in any activity of carrying on business as provided for under Section 2 (g) read with Section 2(d) of the TN Act and therefore, it is not a dealer' within the meaning of Section 2(g) of the TN Act. 19. In our considered view, the aforesaid decision of this Court would not enure to the benefit of the assessee in the instant case. The said decision was rendered on the basis of the question whether the Port Trust is carrying on business under the TN Act and if it is a dealer under the TN Act so as to be exigible to tax thereunder. The aforesaid conclusion emanates from the stark distinction of definition of dealer under the TN Act and the Act. The definition under the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y explanation (3) was added to definition clause 2(g) of the TN Act. By the said amendment the Madras Port Trust has now been declared as a dealer under the TN Act. Explanation (3) states that if the port trust disposes of any goods including unclaimed or confiscated or unserviceable or scrap surplus, old or obsolete goods or discarded material or waste products whether by auction or otherwise directly or through an agent for cash or for deferred payment or for any other valuable consideration, notwithstanding anything contained in the TNGST Act, it shall be deemed to be a dealer for the purpose of the Act. Therefore, by amendment act the legislature has specifically brought in Port Trust also within the definition of dealer under Section 2(g) of the Act and thus, the substratum of the judgment in Madras Port Trust case has been lost. 23. Shri Giri has relied upon the decision of this Court in CST v. Sai Publication Fund, (2002) 4 SCC 57 and submitted that where the main activity is not a business then any incidental or ancillary transaction would only amount to business if an independent intention to carry on business in the incidental or ancillary transaction is established. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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