Judgment :- Shanmugam, J. 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 lend or 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. 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. 4, S.2(viii) of the Sales Tax Act defines a dealer, which is as follows: "'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: (b) a casual trader; (c) a commission agent, a broker or a decreed agent or an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of buying, selling, supplying or distributing goods, executing works contract, transferring right to use any goods or supplying by way of or as part of any service, any goods on behalf of any principal; Business is defined in sub-clause (vi) of the Sales Tax Act, which is as follows: "'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;" The casual trader is defined under Sub-cl. (vii) which is as follows: "'Casual trader' means a person who has whether as principal, agent, or in any other capacity, occasional transactions involving the buying, selling, supply or distribution of goods in the State, whether for cash or for deferred payment, or for commission, remuneration or other valuable consideration;". (vii) which is as follows: "'Casual trader' means a person who has whether as principal, agent, or in any other capacity, occasional transactions involving the buying, selling, supply or distribution of goods in the State, whether for cash or for deferred payment, or for commission, remuneration or other valuable consideration;". The sale is defined under sub-clause (xxi) which is as follows: "'Sale' with all its grammatical verifications and cognate expressions means every transfer whether in pursuance of a contract or not of the property in goods by one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration, but does not include a mortgage, hypothecation charge or pledge". 5. Petitioners contend that they can neither be termed as a dealer carrying on business of buying and selling nor can be brought under the definition of "casual trader" for the same reason. The sale of the gold Jewellery in the course of realisation of the claim will not be a sale since the definition specifically excludes mortgage, hypothecation charge or pledge. 6. According to the petitioners they are exercising their statutory right provided under S.176 of the Indian Contract Act of a Pawnee. This provision enables Pawnee to sell the things pledged, if there is a default in payment. If the proceeds of such sale are less than the amount due, the paw nor is still liable to pay the balance. If the proceeds of the sale are greater than the amount due, the Pawnee shall pay over the surplus to the pawnor. The petitioners are exercising a higher or superior right. They are not acting as an agent of the owner of the gold jewellery. As per S.176 of the Indian Contract Act the right of sale is a transfer of special property rights and not a transfer of general property. Therefore, it will not come under sale as defined under the Sales Tax Act. In support of these contentions the petitioners relied on the following decisions: In an unreported judgment of the Karnataka High Court in O.P. No. 18751/88 and W. A. No. 9511 of 1992 dated 7.2.1996 a Division Bench has taken the view that realisation of loan by disposing of the securities is not an activity incidental or ancillary to the business. In support of these contentions the petitioners relied on the following decisions: In an unreported judgment of the Karnataka High Court in O.P. No. 18751/88 and W. A. No. 9511 of 1992 dated 7.2.1996 a Division Bench has taken the view that realisation of loan by disposing of the securities is not an activity incidental or ancillary to the business. According to the Division Bench to hold otherwise would nullify the prohibition of trading prescribed by S.8 of the Regulation Act. The Division Bench distinguished the decision in Member Board of Revenue, W.B. v. Controller of Stores, Eastern Rly. (AIR 1989 SC 1468). According to the Division Bench, disposal of goods by sale by the Railways was adjunct ve to the principal activity of the carriage of goods by the railways and consequently the activity may be regarded as necessarily incidental or ancillary to its business as carrier of the goods. It was also held that Indian Railways Act, 1890 did not contain any provision like S.8 of the Regulation Act. In Dy. Commissioner of Comm. Taxes v. Thirumeninatha Nadar Firm ((1968) 21 STC 184) a Division Bench of the Madras High Court held that the bank in selling the goods pawned them did not act as an agent of the assessee. The sale was an exercise of statutory power and not as an agent. In Collector of Customs v. State of Kerala (1993 (1) KLT 850 = (1993) 91 STC 596) this Court had taken the view that the Collector of Customs who in the discharge of statutory duties and functions under Customs Act. 1962 sells confiscated goods which come into his possession is a dealer liable to pay tax. Learned judge found that thought ordinarily only a person who carries on the business of buying and selling etc. will be a dealer, this requirement has been dispensed with in the case of the Central and State Governments who are ipso facto dealers under the Act. 7. In Narandas v. S.A. Kamtam (AIR 1977 SC 774) the Supreme Court while dealing with the power on mortgagee to sell the property mortgaged held that the mortgagee is not acting as an agent of the mortgagor in selling the property. The Supreme court also held that the mortgagor exercise his right under a different claim. 7. In Narandas v. S.A. Kamtam (AIR 1977 SC 774) the Supreme Court while dealing with the power on mortgagee to sell the property mortgaged held that the mortgagee is not acting as an agent of the mortgagor in selling the property. The Supreme court also held that the mortgagor exercise his right under a different claim. The mortgage's right is different from the mortgagor's. The mortgagee exercises his right under a totally superior claim which is not under the mortgagor. In L.N. Arjun Das v. State Bank of India (AIR 1969 Patna 385) Untwalia, J., as he then was, speaking on behalf of the Division Bench dealing with the nature of right of a Pawnee to sell the goods pledged held that the Pawnee gets a right to sell the thing pledged, as expressly engrafted in S.176 of the Contract Act. He still does so not as a full owner of the thing, but by virtue of an implied authority from the pawned to do so. The Pawnee has no special property or right left, after he has exercised his right of sale under S.176 of the Contract Act. In State of Andhra Pradesh v. A. P. Housing Board (1988) 70 STC 203) a Division Bench of Andhra Pradesh High Court held that the andra Pradesh Housing Board is not a dealer while selling application forms, iron scrap and other unserviceable materials since as per Andhra Pradesh Housing Board Act it was not engaged in trade or commerce as generally understood. 8. Learned Government Pleader appearing on behalf of the State submitted that S.8 of the Regulation Act enables them to sell the gold jewellery for realisation of security given. The Banks are carrying on the business of selling and the business as per the definition includes commerce. He also submitted that in any event they will be casual trader even if occasionally they involved the buying and selling. He submitted that the points raised are fully covered by the decisions against the petitioners. In this context, he relied on the following decisions: 9. In District Controller of Stores v. A. C. Taxation Officer ((1976) 37 STC 423) the Supreme Court held that the sales of unserviceable materials and scrap by the Northern Railway, were exigible to sales tax since the activity of the Railways in the selling of unserviceable materials would be 'business'. In this context, he relied on the following decisions: 9. In District Controller of Stores v. A. C. Taxation Officer ((1976) 37 STC 423) the Supreme Court held that the sales of unserviceable materials and scrap by the Northern Railway, were exigible to sales tax since the activity of the Railways in the selling of unserviceable materials would be 'business'. In Member, Board of Revenue v Controller of stores ((1989) 74 STC 5) the Supreme Court held that the South Eastern Railway's activity of selling goods which remained unclaimed was adjunctive to its principal activity of carriage of goods, and, therefore, the South Eastern Railway was a 'dealer' for the purpose of the Sales Tax Act. In Collector of Customs v. State of Kerala (1993 (1) KLT 850 = (1993) 91 STC 596) learned judge of this Court held that the Collector of Customs who sells confiscated goods is a dealer liable to pay tax. In U.I. Insurance Co. Ltd. v. Commissioner, of Commercial Taxes ((1990) 78 STC 99) a Division Bench of Karnataka High Court held that the Insurance Company which carried on the business of insuring goods came into possession and in the course of its business sold the insured goods in a damaged condition as scrap. The Division Bench held that the Insurance Company is a dealer since the disposal of salvaged goods are necessarily incidental or ancillary to the business of insurance. In Syndicate Bank v. Commercial Tax Officer ((1995) 99 STC 52) the learned judge of Karnataka High Court held that the bank is a dealer while selling the property hypothecated to it. Such activity was outside the prohibition contained under S.8 of the Regulation Act. 10. I have heard the counsel in extensor. The sheet-anchor of the petitioners' case is that there is "prohibition of trading" imposed under S.8 of the Regulation Act. According to them, petitioners cannot be trading in what is barred under the Act. On a careful consideration of this provision it could be seen that the Banks can engage in the trade in connection with the realisation of security. S.6 of the Regulation Act authorises the Bank multifarious business activities like contracting for private loans, acquiring and holding and generally dealing with any property which may form security for any loan etc. On a careful consideration of this provision it could be seen that the Banks can engage in the trade in connection with the realisation of security. S.6 of the Regulation Act authorises the Bank multifarious business activities like contracting for private loans, acquiring and holding and generally dealing with any property which may form security for any loan etc. S.8 of the Regulation Act clearly allows the buying and selling in connection with the realisation of security given. Thus, while the Bank in the course of business acquire the gold and jewellery as security they are entitled to realise for the loans and advances by selling them. While S.8 prohibits trading in gold, it allows the Bank to realise their advances from the gold given as security. If there is a total ban the Banks would not be before this Court. Many Banks do grant jewel loans as regular form of their business activity, viz., advancing loans on jewellery and gold. They also regularly conduct and cause the auction conducted for realisation of loan. Nobody prohibited them from doing it. Obviously because they are entitled to under the exception covered at S.B. 11. Identical question raised in Syndicate Bank Commercial Tax Officer ((1995) 99 STC 52) was negatived by Karnataka High Court following United India Insurance Co. Ltd. v. Commissioner, of Commercial Taxes, ((!990) 78 STC 99: ILR 1989 Kar. 3473) and Karnataka Pawn Brokers' Association (Regd.) v. State of Karnataka ((1994) 94 STC 243: ILR 1993 Kar. 240). I am in full agreement with the view of the learned Judge. Therefore, the contend on that they are prohibited from doing the business cannot be accepted. With the result the petitioners would come within the definition of dealer under the Sales tax Act as a person carrying on business of buying, selling etc. The business of advancing money and selling the jewellery for realising may not be the principal or regular course of the business. There is no exclusion in the definition for such a dealer and in any event, they will come under the definition of a "Casual trader". Even if the Bankers do so not as a principal business this would be in connection with or incidental to commerce coming within the ambit of the definition 'business'. The Supreme Court in Member Board of Revenue, W.B. v. Controller of Stores, Eastern Rly. Even if the Bankers do so not as a principal business this would be in connection with or incidental to commerce coming within the ambit of the definition 'business'. The Supreme Court in Member Board of Revenue, W.B. v. Controller of Stores, Eastern Rly. ((1989) 74 STC 5 = AIR 1989 SC 1468) and in District Controller of Stores v. A. C. Taxation Officer ((1976) 37 STC 423) held that activity of disposing of the goods which remained unclaimed was adjunctive to its principal activity and which will be regarded as necessarily incidental or ancillary to its business as owner of goods. 12. The distinction sought to be made on these decisions that the Railways Act enables them to carry on these activities whereas S.8 of the Regulation Act is not, cannot be sustained. The bar does not apply to the sale for realisation of the security. The petitioners are as a matter of fact doing and are involving in these business activities. 13. The unreported Division Bench Judgement relied on by the petitioners proceeded on the basis that there is a bar under S.8 of the Regulation Act. The Explanation to S.8 is in reference 'bartering of goods' and in reference to buying and selling. Besides there is no prohibition and in any event the sale or disposal of gold jewellery is adjunctive to its principal activity, viz., 'contracting private loans and dealing with property which may form security for any loan" as held by the Supreme Court in the decision referred above. 14. The sale of the jewellery or gold is the taxable event and not the pledge. Therefore, the levy is well within the purview of entry 54 of List II of the Seventh Schedule to the Constitution. The banker under S.176 of the Contract Act is entitled to sell the goods. The pledged articles are meant to be security for the debt and the right to property vests with the pledge so far as is necessary to secure the debt. Even though the general property right continues with the owner the special property or interest is with the pledge and he can compel the payment by selling it. The sale by the banker is not as an agent but by virtue of the contractual right recognised under S.176 of the Contract Act. The Division Bench of the Madras High Court in Dy. The sale by the banker is not as an agent but by virtue of the contractual right recognised under S.176 of the Contract Act. The Division Bench of the Madras High Court in Dy. Commissioner of Commercial Taxes v. Thirumeninatha Nadar Firm ((1968) 21 STC 184) in dealing with the banker's liability held as follows: "In so far as it held that the banks in selling the goods pawned to them did not act as the agents of the assessee, it was right. As pledges, the banks, acting under S.176 of the Contract Act, had a right to sell the goods. Their sale was but an exercise of the statutory power and not as agents. But the sales were nevertheless on behalf of the pledge, for, the pawn or pledge by itself did not make the Pawnee or pledge the owner of the goods. The very concept of a pledge carries with it the elements of custody and a power to sell the goods in default of payment. This is evident in this case by the fact that after crediting towards the debts due from the pawned, the balance of the sale proceeds were paid over to him". 15. A Division Bench of the Madras High Court in Madras Pawn Brokers Association v. State of Tamil Nadu ((1995) 98 STC 457) while dealing with the tax liability of a pawn broker under the Tamil Nadu General Sales Tax Act and while considering in detail on the subject held that the pawn broker satisfies the definition of "dealer" and his activities satisfy the definition of "business". The Division Bench held: "Once he pledges the articles with the pawn broker, except his right to redeem the pledged articles, within the time stipulated either by the contract or by the law in question, he has no right of sale in the matter of sale of the pledged articles; nor does it require his consent to have the sale of such pledged articles. He has no right to stop the sale, except that he is entitled to pay the loan amount with interest and charges due as prescribed till the last minute before the sale of the pledged articles is effected by the pawnbroker through the approved auctioneer. He has no right to stop the sale, except that he is entitled to pay the loan amount with interest and charges due as prescribed till the last minute before the sale of the pledged articles is effected by the pawnbroker through the approved auctioneer. Hence, the pawn plays no role whatever in the actual sale of the articles, though it is his default in redemption of the pledged articles that results in the auction sale of the pledged articles. Merely because he has a right in law, which is also secured under the provisions of the Act and the Rules, to be paid the surplus of the sale proceeds after appropriating the amount due towards the loan with interest due thereon and the other permissible charges. That by itself could not be said so be on account of any role played by him in effecting the sale as such, but the said right would preserve and secure to him as the person having general property rights in the articles and nothing more. Consequently, it is futile to contend that the sale was effected by the pawner or by the pawnbroker for and on behalf of the pawner. Consequently, we are of the view that the pawnbroker, whose action and decision brings about the sale and who alone having possession hands over the pledged articles to the successful bidder subsequently, alone can be said to be the seller in law". The Division Bench then concluded as follows: "On the role and part played by the pawnbroker in the matter of sale of the pledged articles, there could be no difficulty in our holding that the pawnbroker under our consideration satisfied the requirements of "dealer'. It is also not possible for the pawnbrokers before us to contend that they do not carry on the business of buying and selling". 16. I am in respectful agreement with the view and this would apply to the facts of the case. The fact that the pawn brokers are governed by the Tamil Nadu Pawn Brokers Act, 1943, does not alter the situation or makes difference with the question concerning whether the Bankers are dealers under the Sales Tax Act. While a pawnbroker is governed by the Pawn Brokers Act, the Banker is governed by Banking Regulation Act. Their activity in realising the security is similar and identical. 17. While a pawnbroker is governed by the Pawn Brokers Act, the Banker is governed by Banking Regulation Act. Their activity in realising the security is similar and identical. 17. Taking into account all these I hold that the petitioners/ Bankers are "dealers" as per S.2(viii) of the Sales Tax Act and are liable to pay tax under S.5 of the Act. The orders passed by the officers are valid. S.2 (viii)(f)(1) of the Sales Tax Act is constitutionally valid. With the result the Original Petitions are dismissed.