The Supreme Court of India ruled that Cochin Port trust is a ‘dealer’ and falls within such definition under Kerala General Sales Tax Act (“Act”) and is consequently assessable to tax under the Act.
Comparing the definition of a ‘dealer’ in the Act with that in Tamil Nadu General Sales tax Acy, a Large Bench of the Court said, “The definition under the Act is a wider definition while the TN Act as it then stood, provides for a very restricted meaning of the term “dealer”. A comparison of the definition clauses in the Act and the TN Act would show that the requirement of “carrying on business” by buying, selling, supplying or distributing goods directly or otherwise whether for cash or deferred payment or for commission, remuneration or other valuable consideration was a necessary ingredient of a dealer under the TN Act, but clauses like (e), (f) and (g) of Section 2(viii) of the Act were absent in the TN Act. Thus, the said definitions are not pari materia.”
The Court said that the definition [dealer] expressly includes the persons who whether in course of business or not engage in the sale or transfer of goods and thus, does not mandate the requirement of conducting business for a person to be exigible under the Act. “The contradistinction between the definition of “dealer” under the TN Act and the Act makes it abundantly clear that the observations of this Court in Madras Port Trust case, which refer to the definition of TN Act and interprets it to reach the conclusion of the Trust not being exigible to tax, cannot be accepted in the instant case.”