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TMI Blog2000 (3) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... ---------------------------------------------------------------------------------------------------------------------------------------------------- Sr. No. Nature of goods Percentage ---------------------------------------------------------------------------------------------------------------------------------------------------- 1 2 3 ---------------------------------------------------------------------------------------------------------------------------------------------------- (i) Alcoholic Liquor for human con- Ten sumption (other than Indian-made per cent foreign liquor) and tendu leaves (ii) Timber obtained under a forest Fifteen lease per cent (iii) Timber obtained by any mode other Five than under a forest lease per cent (iv) Any other forest produce not being Fifteen timber or tendu leaves per cent" ------------------------------------------------------------------------------------------------------------------------------------------- (2) to (5C)................................................................................................................................ (6) Any person responsible for collecting the tax who fails to collect t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttled through auction, obtained a right to sell Country liquor from the vend for which such licence had been granted. According to the learned Counsel, no Country liquor was physically sold in such an auction and only a right to sell Country liquor from the licensed vend was sold by way of auction. 5. The CIT(A) rejected the various arguments on the following main grounds:-- (i) Objects which were sought to be achieved by the insertion of section 206C in the Statute book with effect from June 1, 1988: "25. Considerable difficulty has been felt in the past in making assessment of incomes in the case of persons who take contracts for sale of liquor, scrap, forest products, etc. It has been the Department's experience that for taking such contracts, firms or association of persons are specifically constituted and very often no trace is left regarding them or their members after the contract has been executed. Persons have also been found to have taken contracts in benami names by floating undertakings or associations for short periods. Since tax is payable in the assessment years in respect of the incomes of the previous years, the time by which the incomes from such sources bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght on such "buyer" to receive the specified goods i.e. country liquor in the present case." (v) That the words "right to receive any such goods" referred to all the four categories mentioned in the table and not to the last three categories comprising timber obtained under a forest lease or otherwise and any other forest produce other than timber or tendu leaves as canvassed by the appellants. (vi) The expression "right to receive any such goods" had enlarged the scope of the word "buyer" and the amount charged by the State by way of licence fee from the vendors of Country liquor was in the nature of price of a privilege which the purchaser had to pay to acquire such a privilege and which in turn vested the purchaser with the right to receive the specified goods i.e. Country liquor and thus caught within the definition of a "buyer" as contained in clause (a) of the Explanation to section 206C. 6. Coming to the arguments before us, the learned Counsel at the outset stated that most of the issues arising in the present appeals stood concluded in favour of the appellants by the recent judgment of the Hon'ble Punjab and Haryana High Court in the case of certain L-14A licensees i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f they are covered by the first part. A buyer in the further sale of such goods is one of the classes of persons who stand excluded from the definition by virtue of sub-clause (ii) of clause (a) of the Explanation being the subsequent buyers. Petitioners before us undoubtedly purchase country liquor from the wholesalers who are L-13 licensees and the latter and purchased the same from the distilleries (manufacturers). The sale in favour of the petitioners is thus a second sale covered by the exclusion clause (ii) of clause (a) of the Explanation. In this view of the matter, the petitioners are not buyers within the meaning of section 206C of the Act." (C) Judgments reported in State of Bihar v. CIT [1993] 202 ITR 535 (Pat.) and Ramjee Prasad Sahu v. Union of India [1993] 202 ITR 800 (Pat.): State of Bihar's case dealt with provisions of sections 44AC and 206C as they then stood and not advancing Revenue's case whereas Ramjee Prasad Sahu's case dealt with the provisions of section 206C as were introduced by the Finance Act, 1992 w.e.f. 1-4-1992 holding that 1596 of the excise duty payable by the petitioners on account of purchase of Country liquor could not be coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sy in the present appeals i.e. whether the State of Haryana becomes a 'seller' within the meaning of clause (b) of Explanation to section 206C. The answer is an emphatic "no". The High Court, has clearly held that what the Excise and Taxation Commissioner has sold are the L-14A licences and not any goods of the nature specified in the Table attracting T.D.S. provisions. (E) What represents the term "amount payable": "We may now examine the matter from another angle as well. Sub-section (1) of section 206C of the Act requires that every seller of alcoholic liquor for human consumption other than Indian made foreign liquor shall collect from the buyer 10% of the amount payable at the time of debiting the amount to the account of the buyer or at the time of receipt of any such amount in cash or by cheque or draft or by any other mode. It is thus clear that what is collectable is 10% of the 'amount payable'. The amount payable is that amount which is payable at the time of debiting the amount to the account of the buyer or at the time of receiving money from him in cash or by cheque or by draft or by any other mode for the goods sold to him. That amount, in our opinion, is the purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons which generate no income. 7. The other argument of the learned D.R. to the effect that L-14 licensees are buyers in the first instance also falls to the ground in view of the decision taken by the jurisdictional High Court to hold otherwise. His other arguments with reference to CBDT circular No. 565 dated 11-3-1990 are also found to be irrelevant and the reliance on the decision of the Hon'ble Himachal Pradesh High Court in the case of Gian Chand Ashok Kumar v. Union of India [1991] 187 ITR 188 is misconceived as the decision is distinguishable on facts as also on law. 8. We now come to the arguments advanced by the learned Counsel for the appellants and which according to him had not come up before the Hon'ble Punjab and Haryana High Court in the decision relied upon. Before we come to the specific arguments, we find it necessary to highlight the salient features of section 44AC since deleted and the provisions of section 206C as they now stand. 9. It may be mentioned that under the provisions of section 44AC, 40% of the amount paid or payable by the buyer of alcoholic liquor was deemed to be profits and gains of the buyer from the business of trading in such goods char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r other agencies. He, therefore, urged that the Tribunal may also decide the issue that the Government cannot be treated as a seller of alcoholic liquor to L-14 licensees. 10. We have carefully considered those aspects, in the light of the amended provisions of section 206C. We feel that the contentions of ld. Counsel have some force, inasmuch as, the words 'the right to receive any such goods' have crept into the definition of 'buyer' in the context of the goods, other than alcoholic liquor for human consumption. We feel that the definition of buyer given in the Explanation to section 206C would only cover a person who obtained in any sale by way of auction, tender or any other mode, alcoholic liquor from the seller, as defined in clause (b) of the Explanation. In this view of the matter, the Government cannot be treated as a seller only with reference to grant of licences to L-14 licensees. This view is in consonance with the decision of Hon'ble Punjab and Haryana High Court in the aforesaid writ petition. 11. We may also mention here the decision of the Hon'ble Himachal Pradesh High Court in the case of Rudra Co. v. Union of India [1998] 233 ITR 66, wherein it has been hel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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