Bank selling mortgaged assets at auction can be a dealer under VAT law, with tax and penalty sustained.

A nationalised bank that sold mortgaged assets in public auction to realise a loan was treated as a dealer under section 2(xv)(f) because the provision covers a bank or financing institution selling pledged or other valuable articles secured for a loan, even if the sale is not in the course of business. As the bank sold the mortgaged properties in its capacity as mortgagee, the statutory definition was satisfied. Tax liability therefore followed, and the reduced penalty imposed by the Tribunal was also sustained.

---

---

Issues: Whether a nationalised bank selling mortgaged assets in public auction to realise the loan amount falls within the definition of "dealer" under section 2(xv)(f) and is therefore liable to tax and penalty under the Kerala Value Added Tax Act, 2003.

Analysis: The provision treats a bank or financing institution as a dealer when it sells pledged articles or other valuable articles secured for a loan, whether or not the sale occurs in the course of business. The bank had admittedly sold the company's mortgaged properties in public auction for realisation of the loan. The sale was effected in the bank's capacity as mortgagee and squarely satisfied the statutory definition. The levy of tax followed from that conclusion, and the reduced penalty imposed by the Tribunal was also upheld.

Conclusion: The bank was rightly treated as a dealer for the impugned sale and the tax and penalty levy were sustained.

---