2003 (11) TMI 573

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....s., respectively. Pursuant to that the plaintiff has filed his tender quoting the price of the lead ingots at Rs. 10.60 per kg. exclusive of taxes. The tender of the plaintiff was accepted by the defendant bank. Pursuant to this acceptance the plaintiff has paid the entire sale consideration calculated at the rate of Rs. 10.60 and paid a sum of Rs. 31,855.95, towards Karnataka sales tax at six per cent plus surcharge, plus R.D.C. on sales tax. According to the plaintiff the defendant bank being not a registered dealer is not entitled to collect the same and therefore he has filed the suit for recovery of a sum of Rs. 32,805.95. 3.. The defendant in its written statement has admitted the case pleaded by the plaintiff in its plaint except i....

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....on Act, 1949 reads as follows: "8. Prohibition of trading.--Notwithstanding anything contained in section 6 or in any contract, no banking company shall directly or indirectly deal in the buying or selling or bartering of goods, except in connection with the realisation of security given to or held by it, or engage in any trade, or buy, sell or barter goods for otherwise than in connection with bills of exchange received for collection or negotiation or with such of its business as is referred to in clause (i) of sub-section (1) of section 6: Provided that the section shall not apply to any such business as is specified in pursuance of clause (o) of sub-section (1) of section 6." From a reading of the above section, it is clear....

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....ealer effecting such sale would have been entitled to collect by way of tax under this Act and shall pay the tax so collected into the Government treasury." From a reading of the above section it is clear that a person who is not a registered dealer liable to pay tax, shall not collect any amount by way of tax. Under section 19 of the Act, the Central Government, State Government, a statutory body or local authority though not registered dealers, are conferred with the power to collect tax. The defendant bank being a banking company cannot be considered either as a Central Government or a State Government or as a statutory body or a local authority. No doubt, the nationalised bank may be, for the purpose of article 12 of the Constitut....