TaxTMI 
TaxTMI 
2020 (2) TMI 1157
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.... RAGHAVAN, ADVOCATE) (BY SRI. K P KUMAR, SENIOR COUNSEL A/W SRI. VISHWASAI RAJENDRA, ADVOCATE) (BY SRI. SHIVADASS G, SENIOR COUNSEL A/W MISS. SONAL SINGH AND SRI. RAVI RAGHAVAN, ADVOCATE) RESPONDENTS (BY SRI. T K VEDAMURTHY, AGA) ORDER All these petitioners being the companies incorporated under the provisions of erstwhile Companies Act, 1956 are knocking at the doors of Writ Court for laying a challenge to the Orders of Assessment/Reassessment made or sought to be made under the provisions of Sec.39 of the Karnataka Value Added Tax Act, 2003 (hereafter "2003 Act") mainly on the ground that their branches or units cannot be treated as separate "legal persons" and therefore supply of goods from one branch to another in....
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....for levy of VAT on the 'sale' by a 'dealer' registered or liable to be registered under the Act; the word 'dealer' is defined in Sec.2(12) of the dictionary clause of the Act; it is a "means and includes" definition, is true by virtue its expansive text; the principal part of the definition reads: " 'Dealer' means any person who carries on the business of buying, selling, supplying or distributing goods, directly or otherwise, whether for cash or for deferred payment, or for commission, remuneration or other valuable consideration and includes ..."; nine categories of dealers that are enumerated in the inclusive part of the definition coupled with four Explanations do not even remotely suggest that the units or branches of....
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.... "111. A legal person possesses a capability to bear interests, rights and duties. Salmond makes a crucial distinction between legal personality and the physical corpus on which legal personality is conferred. ... Legal persons, being the arbitrary creations of the law, may be of as many kinds as the law pleases. ... Legal personality is not human nature. Legal personality constitutes recognition by the law of an object or corpus as an embodiment of certain rights and duties. Rights and duties which are ordinarily conferred on natural persons are in select situations, conferred on inanimate objects or collectives, leading to the creation of an artificial legal person. An artificial legal person is a legal person to the....
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....fice has exceeded the specified limit. A branch office, therefore, is not a registered dealer. In such cases what merely happens is that a dealer is issued several registration certificates in respect of his places of business. This does not bring into being as many dealers as there are registration certificates. The registered dealer remains only one. The other provisions are merely for administrative convenience..." (c) the contention of the Revenue that once the units/branches of a corporate body on being registered as dealers would become juristic persons, cannot be sustained without straining the language of Sec.2(12) which defines the term 'Dealer'; sub-sec (6) of Sec.38 provides for registration of separate units of a....
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....dvocate appearing for the dealer is justified in pointing out condition (i) prescribed in Rule 47 to the effect that treating of the branches of the business of a corporate dealer as separate units shall not reduce the tax liability in any way; Sec.38 (6) of the Act and Rule 47 are only intended to facilitate ease of business of the branches which the corporate dealer has in the same State; their text and context do not support the contention that they are intended to confer legal personality on such branches, on their registration; the State has such legislative power to attribute legal personality to an entity, under Part-XI of the Constitution of India, is beside the point as long as in exercise of such power, no provision is enacted to ....
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....d the Tamil Nadu Act are in pari materia with each other, there is no reason or rhyme for this Court to tread a different path; paragraphs 2, 15 & 16 of the Madras decision are reproduced below: "2. The short issue, which falls for consideration is, whether the petitioners herein, which are two units of National Textile Corporation Ltd., could be treated as two different entities and the transfer of yarn from one of the entity to the other, for the purpose of manufacture of cloth, which is an exempted commodity, would amount to sale. 15. In a revision petition filed by the petitioner therein, it was contended that transfer of furniture to the other units of SIDECO would not come under the definition of sale. While consider....