- (1.) A short question which arises for determination in this civil appeal filed by the State (appellants) is : whether pledging of ornaments with the Bank against a loan and sale of such goods if the loan is not discharged, would be "business" within the meaning of Sec. 2(1)(e) of the Andhra Pradesh General Sales Tax Act, 1957 read with Explanation IV thereto.
(2.) On 3.4.89 the Commercial Tax Officer, Warangal, issued demand notice on respondent-Bank for payment of tax on turnover of auction sale of jewellery held on 19.8.87 u/s. 5 read with Explanation IV of Andhra Pradesh General Sales Tax Act, 1957 ("the 1957 Act", for short). In this connection reliance was placed on Sec. 2(1)(e) read with Explanation IV of the 1957 Act.
(3.) Aggrieved by the demand notice, the respondent-Bank filed writ petition before the High Court challenging the legality of the notice. In the writ petition the respondent-Bank contended that the provisions of the 1957 Act are not applicable to banking transactions.;