Page 105 - GSTL_26th March 2020_Vol 34_Part 4

2020 ] IN RE : INTERNATIONAL FLOWER AUCTION BANGALORE LTD. 615
words used in the second leg of the definition of ‘agent’ under Section 2(5) of the
CGST Act - “by whatever name called, who carries on the business of supply or
receipt of goods or services or both on behalf of another” - lends support to this
view. They submitted that the words ‘commission agent’ and ‘auctioneer’ are
interchangeable, and the narrow interpretation of the Appellant is not sustaina-
ble. They relied on the Kerala High Court decision in the case of T.V. Abdul Nazar
and Anr. v. P.K. Mohammed Kutty reported in 1985 (7) TMI 381 and the Supreme
Court decision in the case of The Authorised Officer v. S. Naganatha Ayyar, in sup-
port of their above claim. In view of the above, they requested that the appeal be
dismissed, and the order of the Authority be upheld.
Discussion & findings :
11. We have gone through the records of the case. This is an appeal
filed by the Department against the ruling given by the Authority for Advance
Ruling in the case of M/s. International Flower Auction Bangalore Ltd. We have con-
sidered the submissions made by the Appellant in their grounds of appeal and at
the time of personal hearing. We have also gone through the cross objections and
the documents filed by the respondent company.
12. Briefly stated, the facts are that M/s. International Flower Auction
Bangalore Ltd. (IFAB - the respondent company) is a public limited company
engaged in the activity of auctioning high quality cut flowers of different varie-
ties. IFAB provides a forum wherein the flowers and other floriculture produce
are bought and sold by the members of IFAB through the auction process. Every
grower who desires to supply flowers and other floriculture products to IFAB
and to be sold at the auction process in IFAB, has to be registered with IFAB by
paying the stipulated membership fees. The grower should provide the land rec-
ords for planting of flowers and a Grower’s Certificate issued by the Horticulture
Department. IFAB will make payments to the growers for the flowers supplied
by them to IFAB after deducting the commission of 3.5% of the sale value of the
flowers. The grower has the right to fix the minimum/base price for the flowers
put up for auction while the maximum price is fixed by IFAB, considering the
demand for flowers.
13. Every person/organization, who desires to purchase flowers and
other floriculture products at IFAB by participating in the auction process, has to
be registered with IFAB by paying the stipulated membership fees. Every per-
son/organisation who has purchased flowers and other floriculture products at
the IFAB auction, has to make the payment in cash at the cash counter for the
purchase price and the commission at 1.5% of the purchase price and take the
delivery of the flowers.
14. IFAB has deployed ‘Dutch auction’ system whereby the digital auc-
tion clock runs in decreasing order and the price per stem reduces from maxi-
mum to minimum. The auction process goes as follows :
• Flowers are received from the growers located in and around Ban-
galore and also different parts of South India.
• Flowers are checked by the IFAB supervisor and a serial number is
allotted, and the details are entered into the system.
• After inspection, flowers are stored in the cold storage room of
IFAB.

GST LAW TIMES  26th March 2020  201