effected, as is comprehended in Entry 54 of List II of the Seventh Schedule, the State becomes endowed with authority to tax the sale. He would point out that when there is a pledge, what is transferred may be the special right in favour of the pledgee to cause the pledged articles to be sold in the event of default by a borrower, who has pledged the items. But, in the event of default, the creditor/pledgee is clothed with a power to sell the said items, no doubt for realisation of the loan. When the sale takes place, it is not a special property which is transferred. On the contrary, what is transferred is indeed the general property in the goods as contemplated in the Sale of Goods Act. In other words, a sale in enforcement of the pledge, according to the learned Government Pleader, would result in vesting of the full title to the goods as would have been transferred by the owner of the goods. He would point out Section 176 of the Indian Contract Act in this connection and he would also take us through the decision reported in Federal Bank Ltd. v. State of Kerala (2007(3) K.L.T. 106 (SC)) in this regard. He would contend that the Apex Court has categorically held that when a sale takes place in enforcement of a pledge, it is being done in the course of the business of banking.
