Cash against credit card

Does not seem to be.

Also relate with T&C of agreement signed with Mechant bank, VISA etc.....

Whether it is lawful or not, most of the traders including sister concerns (Cards in the name of individual business man)  are transacting the same way, as they have to maintain smooth relations with in their trade.

The responsibility of the payment is that of card holder. Some business men allow such swipes by taking some additional amount as commission .  If the accepting vendor finds that it is not proper, he can simply reject the offer, as it is not permitted transaction.  Many jewellers wish to dispose their cash in this manner,  as the credit will be given by the bank without sending such cash into the Bank saving manpower, risk and at the same time earning commission unofficially.

It is upto the obliging trader to account for the product.  I have yet to see a business that follows all laws strictly without compromise whether major or minor.

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