TMI Blog2013 (7) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner, no tax can be collected at source by the opposite parties, which is clearly in violation of Sub-Clause (iii) of Clause (a) of the Explanation to Section 206-C of the Income Tax Act, 1961. Held that:- Apex Court in Union of India and others versus Om Prakash S.S. & others [2001 (2) TMI 6 - SUPREME Court], has observed that, "The reliance placed on the explanation to Sub-Section (ii) of Section 206-C is misplaced - 'Buyer' would mean where a person by virtue of the payment gets a right to receive specific goods and not where he is merely allowed/permitted to carry on business in that trade. It is for this reason that we had earlier dismissed the Special Leave Petitions and any observations of the High Court not in consonance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , therefore they preferred their respective writ petitions for a direction to the opposite parties to restrain them from collecting Tax at the time of purchase of country liquor by the petitioners. The crux of the matter is that the opposite parties had obtained CL-2A licenses from the Government of Uttar Pradesh under U.P. Excise Act, 1910 and Rules made thereunder after payment of requisite license fee for the financial year 2002-03 to operate country liquor godowns in different districts in Uttar Pradesh. The liquor is sold by M/s Daurala Sugar Works from its godowns to various Retail Vendors (petitioners) in the respective districts who hold CL-5A Licences granted by the Government of Uttar Pradesh under the provisions of U.P. Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the Apex Court while dismissing the SLP against the order of the Punjab and Haryana High Court held that the licenses issued by the Government permitting the licensee to carry-on liquor trade is not attracted, as the licensee does not fall within the definition of 'buyer' as referred in Section 206-C of the Act. Learned Additional Chief Standing Counsel does not dispute the aforesaid legal proposition. While entertaining the writ petitions, a Coordinate Bench of this Court vide order dated 22.5.2002 provided that in view of the decisions in the cases of Saini and Company Vs. Union of India reported in 246 ITR 762 (Full Bench), Mittal K K and Company Vs. Union of India [1991 ITR 208 (P H) and Union of India Vs. Om Prakash and Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irit shall not be possessed, and the prescription of a standards of quantity for any (intoxicant)." The Explanation to the provisions defines the word 'buyer' mentioned in Section 206-C of Income Tax Act reads as under:- "(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 sector company (ii) a buyer in the further sale of such goods obtained in pursuance of such sale, or (iii) a buyer where the goods are not obtained by him by way of auction and where the sale price of such goods to be sold by the buyer is fixed by or under any State Act." In the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 997) 228 ITR 653 (P H) as well as Naresh Kumar and Co. (2000) 243 ITR 760 (P H), the two Division Benches have held that persons holding L014 and L-14A licenses do not fall within the definition of 'buyer' and the holders of L-13 licenses cannot be treated as sellers qua those holding L-14 and L-14A licenses. Therefore, the demands created by respondent NO.3 against the petitioners by assuming that they had committed default in making deduction at source in terms of section 206-C can not be sustained." In the case of Sir Shadi Lal Enterprises Ltd. versus Union of India [(2003) 130 Taxman 563 (All.)], this Court held that the assessee-petitioner was a company having distilleries under the licenses granted by the U.P. Excise authorities for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced on the explanation to Sub-Section (ii) of Section 206-C is misplaced as is evident from what is stated here-in-above. 'Buyer' would mean where a person by virtue of the payment gets a right to receive specific goods and not where he is merely allowed/permitted to carry on business in that trade. It is for this reason that we had earlier dismissed the Special Leave Petitions and any observations of the High Court not in consonance with this may be not strictly correct but the fact remains that on licences issued by the Government permitting the licensee to carry-on liquor trade the provisions of Section 206-C are not attracted as the licensee does not fall within the concept of 'buyer' referred to in that Section. Buyer has to be buyer o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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