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TMI Blog2005 (1) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the judgment in the case of Ashok Kumar v. Union of India. Counsel for the petitioner submitted that these two judgments have been followed in another judgment of this court in the case of Harvansh and Sons v. Union of India [2004] 266 ITR 364 (MP). Counsel for the petitioner submitted that the costs of liquor will not include excise duty but will include the cost price of liquor. He submitted that under section 206C of the Income-tax Act, tax at source can be deducted only on the cost price and not on the price including the excise duty. Counsel for the respondent-Department submitted that the aforesaid judgments have not laid down the correct law and section 206C of the Act has not been interpreted properly. He submitted that this question has been determined by the apex court in the case of McDowell and Co. Ltd. v. CTO [1985] 154 ITR 148 whereby earlier judgment in the case of McDowell and Co. Ltd. v. CTO [1977] 39 STC 151 (SC); AIR 1977 SC 1459 has been overruled. He invited attention of this court to the judgment in the case of Hindustan Sugar Mills Ltd. v. State of Rajasthan [1979] 43 STC 13; AIR 1978 SC 1496 and submitted that the question of sale price has been cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o recover tax by collection under sub-section (1) shall be without prejudice to any other mode of recovery. (3) Any person collecting any amount under sub-section (1) shall pay within seven days the amount so collected to the credit of the Central Government or as the Board directs. (4) Any amount collected in accordance with the provisions of this section and paid under sub-section (3) shall be deemed as payment of tax on behalf of the person from whom the amount has been collected and credit shall be given to him for the amount so collected on the production of the certificate furnished under sub-section (5) in the assessment made under this Act for the assessment year for which such income is assessable. (5) Every person collecting tax in accordance with the provisions of this section shall within ten days from the date of debit or receipt of the amount furnish to the buyer to whose account such amount is debited or from whom such payment is received, a certificate to the effect that tax has been collected, and specifying the sum so collected, the rate at which the tax has been collected and such other particulars as may be prescribed. (5A) Every person collecting tax in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te than the relevant rate specified in sub-section (1), the Assessing Officer shall, on an application made by the buyer in this behalf, give to him a certificate for collection of tax at such lower rate than the relevant rate specified in sub-section (1). (10) Where a certificate under sub-section (9) is given, the person responsible for collecting the tax shall, until such certificate is cancelled by the Assessing Officer, collect the tax at the rates specified in such certificate. (11) The Board may, having regard to the convenience of assessees and the interests of revenue, by notification in the Official Gazette, make rules specifying the cases in which, and the circumstances under which, an application may be made for the grant of a certificate under sub-section (9) and the conditions subject to which such certificate may be granted and providing for all other matters connected therewith. Explanation.- For the purposes of this section,- (a) 'buyer' means a person who obtains in any sale, by way of auction, tender or any other mode, goods of the nature specified in the table in sub-section (1) or the right to receive any such goods but does not include,- (i) a public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and while considering the definition of "turnover", it is held that the definition of the word "turnover" clearly indicates that the total amount charged as the consideration for the sale is to be taken into account for determining the turnover. Where a bill of sale is issued (and obviously the bill has to state the total amount charged as consideration), the total amount set out therein is to be taken into consideration. Excise duty though paid by the purchaser to meet the liability of the manufacturer, is a part of the consideration for the sale and is includible in the turnover of the manufacturer. The purchaser has paid the tax because the law asks him to pay it on behalf of the manufacturer. In the case of Union of India v. Om Prakash S.S. and Co. [2001] 248 ITR 105 (SC), the provisions of section 206C of the Income-tax Act, 1461, have been considered. It is held that the aforesaid section refers to a case where by reason of the payment to the seller, the buyer gets specific goods mentioned in the table to the said section or gets a right to collect or receive those goods by virtue of that payment. When the Government issues a licence, it only enables the licensee to carry o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quor, forest produce, etc., as also to earlier circulars referred in paragraph 1 of Circular No. 565. 2. As a result of different systems prevailing in different States, the term 'purchase price', used in section 44AC of the Income-tax Act, was being understood in different ways. In order to clarify this point, the Finance Act, 1990 has amended the said section to provide that the purchase price would mean any amount (by whatever name called) paid or payable by the buyer to obtain the goods referred to in that section, except the bid amount in an auction. Accordingly, the excise duty paid or payable by the buyer will also form part of the purchase price for the purposes of section 44AC. On the same analogy, the 'Nirgam Mulya' or issue price which is paid by a buyer in the State of Uttar Pradesh will also form part of the purchase price. Thus, income-tax will have-to be collected at source under the provisions of section 206C by all persons referred to in section 44AC of the Income-tax Act, 1961 (e.g., Central Government, State Government, local authority, corporations, etc.) at the specified rates, with reference to the purchase price including the excise duty, etc. 3. The abov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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