COLLECTOR OF CUSTOMS Vs. STATE OF KERALA

JUDGEMENT

(1.) THE question for consideration in this case is whether the petitioner, the Collector of Customs, Kochi is liable to pay sales lax under the Kerala General Sales-tax Act, 1963 (the KGST Act in respect of the sales of confiscated and unclaimed goods. THE Government of Kerala informed the petitioner of his liability by the letter Ext. P1 dated May 12, 1988 and that led to this writ petition.

(2.) PETITIONER is the Collector of Customs, Kochi who is discharging statutory duties and functions under the Customs Act, 1962. In the course of those duties and functions, he comes into possession of goods which are either confiscated ones or those Collector of Customs v. State of Kerala (Viswanatha iyer, J.) 1993 (1) remaining unclaimed. The provisions for confiscation of goods are contained in Chapter XIV of the Customs Act, and S. 126 provides that when any goods are confiscated under the said Act, such goods shall thereupon vest in the Central Government. It is these goods which are confiscated, and goods which come into the possession of the Collector but remain unclaimed or uncleared, that are sold by him from time to time and it is in respect of these sales that the Kerala State seeks to make the petitioner liable to tax under the KGST Act.

(3.) IT will be advantageous at this stage to extract the relevant clauses of the definition of the expressions "business" and "dealer" in the KGST Act, as also Art. 285 (1 ). "2 (vi) "business" includes: - a) Any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture, whether or not such trade, commerce, manufacture, adventure or concern 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; XX XX XX 2 (viii) "dealer" means any person who carries on the business of buying, selling, supplying or distributing goods, executing works contract, transferring the right to use any goods or supplying by way of or as part of any service, any goods directly or otherwise, whether for cash or for deferred payment, or for commission, remuneration or other valuable consideration and includes: - XX XX XX Explanation: - (2) The Central Government or a statcgovcrnment, which, whether or not in the course of business, buy, sell, supply or distribute goods, directly or otherwise, for cash or for deferred payment, or for commission, remuneration or other valuable consideration, shall be deemed to be a dealer for the purpose of this Act. " "article 285.- Exemption of property of the Union from State taxation.- (1) The property of the Union shall, save in so far as parliament may by law otherwise provide, be exempt from all taxes imposed by a state or by any authority within a Stale. ". The definition of "dcdaler" as enacted originally did not contain Explanation 2, which was added by the amending Act 3 of 1968.