DHANALAKSHMI BANK LTD Vs. ASSISTANT COMMISSIONER

JUDGEMENT

(1.) The petitioners are Scheduled Banks governed and regulated by the provisions of the Banking Regulation Act, 1949, hereinafter referred to as 'the Regulation Act'.

(2.) The question that arise for consideration in these Original Petitions is whether the activities of these Banks, namely, advancing money on security of gold jewellery and realising their advances by sale of the gold jewellery would be a sale and whether the petitioners are dealers under Kerala General Sales Tax Act, 1963, hereinafter referred to as 'the Sales Tax Act', carrying on business of buying and selling of gold jewellery for the purpose of assessment.

(3.) The case of the petitioners can be summarised as follows: S.6 of the Regulation Act sets out the forms of business in which banking companies may be engaged. Petitioners lender advance money on the security of gold jewellery within the parameters set out under S.6 of the Regulation Act. S.6(1)(f) of the Regulation Act enables the banks to sell and realise in satisfaction of the claim. No provision is available under S.6 for doing the business of buying and selling of the gold jewellery. As a matter of fact, S.8 of the Regulation Act prohibits a banking company either directly or indirectly deal in the buying or selling of goods, except in connection with the realisation of security given to them.