IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 26422 of 2010(C)
1. HDFC BANK LTD,
... Petitioner
Vs
1. THE INTELLIGENCE OFFICER,
... Respondent
2. THE DEPUTY COMMISSIONER (APPEALS)
For Petitioner :SRI.JOSEPH JERARD SAMSON RODRIGUES
For Respondent : No Appearance
The Hon'ble MR. Justice P.R.RAMACHANDRA MENON
Dated :19/08/2010
O R D E R
P.R.RAMACHANDRA MENON, J
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W.P(C) No. 26422 of 2010-C
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Dated this the 19th day of August, 2010.
J U D G M E N T
The petitioner is challenging the sustainability of the condition
imposed by the appellate authority as per Ext.P4 order, whereby the
petitioner has been directed to satisfy 50 % of the disputed liability
and to furnish sufficient security bond for the balance amount, so
as to avail the benefit of interim stay during the period of appeal.
2. The case of the petitioner is that, the vehicles concerned,
which have been hypothecated with the Bank, in connection with the
advance arranged in favour of the persons concerned, are liable to
be sold in auction for realizing the amount due to the financier.
Such an instance will not attract the tax liability; especially when
such vehicles have already suffered tax at the first instance of sale,
submits the learned counsel for the petitioner.
3. Heard the learned Government Pleader as well, who
submits that, the issue is squarely covered by the decision rendered
by this Court in Federal Bank Limited and Others Vs. State of Kerala
[ (2003) 11 KTR 327 (Ker) ] Special emphasis is also given to the
W.P(C) No. 26422 of 2010-C 2
observation made in paragraph 7 of the judgment, wherein it is
stated as follows:
“The crucial question that arise for consideration in this case is as
to whether the activity of auction sale of gold ornaments or other
valuables pledged by the customers as security for the loans taken
by them from the banks for realization of the loan amount with
interest can be said to attract the provisions of the Act making the
bank liable to pay tax under the Act on such transactions”.4. The learned counsel for the petitioner submits that, the
above decision is not at all attracted to the case in hand, as there is
no instances of ‘pledge’ at all but for ‘hypothecation’ of the vehicle.
It is also contended that, the factum of ‘hypothecation’ is entirely
different from the instance of ‘pledge’. Reliance is also sought to be
placed on the definition of the term ‘dealer’ under Section 2 (xv) (f)
and the meaning of the term ‘hypothecation’ as given in dictionary;
the same having not been defined in KVAT Act.
5. The learned Government Pleader made a reference to the
definition of the term ‘business’ in 2 (ix) (a) (b), which is extracted
below:
(ix) “business” includes —
(a) any trade, commerce, manufacture or any adventure
or concern in the nature of trade, commerce of
manufacture, whether or not such trade, commerce,W.P(C) No. 26422 of 2010-C 3
manufacture, adventure or concerns is carried on with a
motive to make gain or profit and whether or not any
profit accrues from such trade, commerce, manufacture,
adventure or concern; and(b) any transaction in connection with or incidental or
ancillary to such trade, commerce, manufacture,
adventure or concern;
It is pointed out that, by virtue of the above definition, any
transactions incidental, commercial or manufacture will come within
the purview of the taxable event and as such, the impugned order
does not call for any interference.
6. Considering the facts and circumstances, this Court finds
that, the basic issue is rather a ‘question of law’, which has to be
resolved by considering the merits of the Revision Petition.
Accordingly, the second respondent is directed to consider Ext.P2
Revision Petition and pass final orders in accordance with law, also
with reference to the relevant judicial precedents, of course after
giving an opportunity of hearing to both the sides. This shall be
done as expeditiously as possible, at any rate, within two months
from the date of receipt of a copy of the judgment. It is made clear
that till such final orders are passed on the revision petition, no
coercive steps shall be pursued against the petitioner for realization
W.P(C) No. 26422 of 2010-C 4
of the ‘penalty’, on condition that petitioner furnishes ‘bank
guarantee’ for the amount involved.
The Writ Petition is disposed of.
Sd/-
P.R.RAMACHANDRA MENON
JUDGE
//True Copy//
P.A to Judge
ab