TaxTMI 
TaxTMI 
TaxTMI 
2015 (8) TMI 1239
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....ts of such borrowers were put to auction under rule 6 of the Security Interest (Enforcement) Rules, 2002 and sale proceeds were appropriated to the loan account of the borrowers. The Sales Tax Officer, opposite party No. 4 issued notice to the bank to produce the accounts. In reply, the stand of the bank was that it was not covered by the definition "dealer" and was not liable to be assessed under the OVATAct. In the auction conducted by the petitioner, no element of "sale" was involved. However, rejecting the stand of the petitioner vide impugned order dated December 12, 2013, demand of tax and penalty was raised which according to the petitioner-bank is illegal and without jurisdiction. The assessing authority has relied upon the judgment of this court dated March 12, 2012 in W. P. (C) No. 3127 of 2012 (Indusind Bank Ltd. v. Principal Secretary to Government, Finance Department, Government of Odisha) and order of the West Bengal Taxation Tribunal in ICICI Bank Ltd. v. Joint Commissioner, Sales Tax, Central Section, Kolkata [2010] 31 VST 178 (WBTT). According to the petitioner, in absence of clear provision specifying the subject of tax, person liable to pay tax and the rate at wh....
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.... Comp Cas 44 (SC); [2007] 4 SCC 188. (iii) Tata Motors Finance Ltd. v. Asst. Commissioner of Sales Tax, Central section, Investigation Wing, Kolkata (W. P. T. T. No. 6 of 2011 decided on October 8, 2013-Calcutta High Court). It is submitted that extending the loan facility for financing the purchase of vehicles, plant and machinery, etc., and recovering outstanding loan dues is part of business of the bank and, thus, auction sale conducted was also part of the said business. The bank thus covered by definition of "dealer" under section 2(12) of the OVATAct, which also covered "casual dealer" as defined under section 2(9). The expression "business" under section 2(7) included the transactions incidental to the trade, commerce or manufacture irrespective of the profit-motive. Under section 9, tax is leviable on the sale or purchase of goods by a dealer liable to pay tax. Under section 11(1), levy of tax is on a dealer who sells the goods, on his taxable turnover of sale. Rate of tax is provided under section 14. It is thus submitted that rate of tax, person liable to pay tax and the taxing event have been clearly mentioned. 7. Before we proceed to consider the question, it w....
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....umption; S. 2(7). 'business' includes- (a) any trade, commerce or manufacture; (b) any adventure or concern in the nature of trade, commerce or manufacture; (c) any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern; (d) any transaction in connection with, or incidental or ancillary to, the commencement or closure of such trade, commerce, manufacture, adventure or concern; (e) any occasional transaction, whether or not there is volume, frequency, continuity or regularity of such transaction, in the nature of such trade, commerce, manufacture, adventure or concern, whether or not such trade, commerce, manufacture, adventure, concern or transaction is effected with a motive to gain or profit or whether or not any gain or profit accrues from such trade, commerce, manufacture, adventure, concern or transaction. 9. Charge to tax and incidence.-There shall be levied in accordance with the provisions of this Act,- (a) a value added tax hereinafter called VATon the sale or purchase of goods by a dealer; and (b) a turnover tax in lieu of VATon the taxable turnover of sales of every retailer registered under this Ac....
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....is not acting as an agent of the borrower even under the 1949 Act. When the bank sells the goods pledged to them they do not act as the agents of the borrower. As pledgees, the banks, acting under section 176 of the Contract Act, 1872 have a right to sell the goods. That sale is not as agents but that sale is in exercise of the statutory power under the 1949 Act. No doubt the sale is on behalf of the pledgor, however, the sale is in exercise of the statutory power (see: Deputy Commissioner of Commercial Taxes v. A. R. S. Thirumeninatha Nadar Firm [1968] 21 STC 184 (Mad)). To the same effect is the judgment of the Punjab and Haryana High Court in High Channel Video v. Enclave Electronics [1999] 116 STC 131 (P&H). Further, on reading the provisions of the 1949 Act, one finds that every bank is required to maintain its balance sheet in form A of the Third Schedule, quoted above. The prescribed form indicates that non-banking assets acquired by the banks even in satisfaction of claims, are required to be declared. The prescribed form of balance sheet indicates that banks are required to show on the asset side non-banking assets acquired by them in satisfaction of claims. Similarly, in ....