TMI Blog1990 (5) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... auction and, secondly, the liquor is purchased and sold by them at a price fixed by the State Government. The wine contractors used to obtain L-14 licences in public auction which is held annually generally in the month of March, as the highest bidder. Before coming to any conclusion, it will be worthwhile to bring on record that the country liquor contractors had also challenged the constitutional validity of the insertion of section 44AC read with section 206C of the Act by filing writ petitions in this court which were dismissed on August 2, 1989, and the constitutional validity of the above sections was upheld in those petitions. At the outset, it was urged at the Bar that, during the pendency of the writ petition in this court, the High Court of Himachal Pradesh has given verdict in Civil Writ Petition No. 495 of 1988 (Gian Chand Ashok Kumar and Co. v. Union of India [1991] 187 ITR 188), on March 6, 1990, and the questions of law and fact before that court were identical to those involved in the present petition. It was, therefore, submitted that, in view of the decision rendered in the above case, the petitioners are entitled to the relief prayed for. Shri R. S. Chahar, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to as the buyer), obtaining in any sale by way of auction, tender or any other mode, conducted by any other, person or his agent (hereinafter in this section referred to as the seller), (a) any goods in the nature of alcoholic liquor for human consumption (other than Indian-made foreign liquor), a sum equal to forty per cent. of the amount paid or payable by the buyer as the purchase price in respect of such goods shall be deemed to be the profits and gains of the buyer from the business of trading in such goods chargeable to tax under the head 'Profits and gains of business or profession' ; (b) the right to receive any goods of the nature specified in column (2) of the Table below, or such goods, as the case may be, a sum equal to the percentage, specified in the corresponding entry in column (3) of the said Table, of the amount paid or payable by the buyer in respect of the sale of such right or as the purchase price in respect of such goods shall be deemed to be the profits and gains of the buyer from the business of trading in such goods chargeable to tax under the head 'Profits and gains of business or profession'. TABLE --------------------------------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prised therein. TABLE -------------------------------------------------------------------------------------------------------------------------------------------- Sl. No. Nature of goods Percentage (1) (2) (3) -------------------------------------------------------------------------------------------------------------------------------------------- (i) Alcoholic liquor for human consumption Fifteen per cent. (other than Indian-made foreign liquor). (ii) Timber obtained under a forest lease. Fifteen per cent. (iii) Timber obtained by any mode other than Ten per cent. under a forest lease. (iv) Any other forest produce not being timber. Fifteen per cent. -------------------------------------------------------------------------------------------------------------------------------------------- Provided that where the Assessing Officer, on an application made by the buyer, gives a certificate in the prescribed form that to the best of his belief, any of the goods referred to in the aforesaid Table are to be utilised for the purpose of manufacturing, processing or producing articles or things and not for trading purposes, the provisions of this subsection shall not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of the tax together with the amount of simple interest thereon referred to in sub-section (7) shall be a charge upon all the assets of the seller." The star argument on behalf of the petitioners is that, with the insertion of the proviso to section 44AC of the Act with effect from April 1, 1989, the petitioners are not liable to pay income-tax at the time of purchase of the country liquor in accordance with the provisions of section 44AC of the Act and are, thus, exempted from the payment thereof in view of the proviso to clause (a) to sub-section (1) of section 44AC of the Act circulated vide communication dated June 26, 1989, annexure P-1. The High Court of Himachal Pradesh in Gian Chand Ashok Kumar's case [1991] 187 ITR 188, elaborately analysed the scope, of the proviso to section 44AC of the Act and extensively noticed the Statement of Objects and Reasons of the Finance Bill of 1988 to know the state of affairs prevailing at the time of enactment of the proviso to section 44AC in the Act and also the purpose to be achieved. It was noticed that a class of persons to whom the provisions of sections 44AC and 206C of the Act were to apply are not traceable after the close ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verdict rendered by the Himachal Pradesh High Court in Gian Chand Ashok Kumar's case [1991] 187 ITR 188 is the complete answer to the questions of law raised before us. We also have ourselves closely examined tile matter at our level. We see no reason why the view taken by the Himachal Pradesh High Court should not be endorsed in the case of the petitioners before us so far as it relates to L-13 licensees. Accordingly, we might observe, though at the cost of repetition that the persons holding L-13 licences are not liable to pay tax at the stage of purchase of the country liquor, in view of the proviso to clause (a) of sub-section (1) of section 44AC of the Act: circulated by the Central Board of Direct Taxes, Delhi, dated June 26, 1989 (annexure P-1). In Civil Writ Petition No. 8337 of 1989, the petitioners have made an additional Prayer for issuance of a mandamus directing the respondents not to charge/deduct income-tax on the excise duty and to collect incometax from them at the purchase point. In order to claim this relief, the petitioners have appended along with the petition, a letter, annexure P-2, which is a communication from the Government of India, Ministry of Finance, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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