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2006 (4) TMI 76 - UTTARANCHAL HIGH COURT"Whether, the basic fee charged under the U.P. Excise Licences (Tender-cum-auction) Rules, 1991, is consideration for sale of liquor under the said rule and is taxable under section 206C of the Income-tax Act?" - Income-tax Officer (TDS) came to know that the District Excise Officer had not collected tax on the basic licence fee (issue price) on sale of alcoholic liquor for human consumption (other than Indian made foreign) liquor - basic fee is not the price of goods but it is a consideration for parting with the privilege. We may notice here that rule 31 of the Rules provides that for lifting the intoxicants from the bonded warehouse the licensee, apart from paying the bid-money in the manner specified in sub-rule (2), rule 24, shall have to pay the price of the intoxicants as fixed by the Excise Commissioner or as prevalent at that time - it is clear that it is this money which is realised under rule 31 of the Rules being the price of the intoxicants which constitutes sale by the State Government or by the Excise Commissioner, and is taxable under section 206C of the Act and not the basic fee.
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