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2019 (4) TMI 785 - HC - Income TaxConstitutional validity of Section 206C - explanation of “buyer” as per Section 206C - statute does not breaches any constitutional provision - neither arbitrary nor any prejudice to petitioners - HELD THAT:- The petitioners are involved in the business of trading in timber. As a trader, the petitioners partakes two characters. At a given point of time, the petitioners buy timber. As a buyer, it is obliged to pay tax to the seller of the timber. When the petitioners sell timber to a buyer, it is obliged to collect tax from the buyer. The petitioners come within the explanation of “buyer” as obtaining in Section 206C of the Act of 1961. What, when, whom and how much to tax is the domain of the legislature. A writ Court need not interfere therein unless it is substantiated that the statute breaches any constitutional provision. In the present case, Section 206C of the Act of 1961 obliges the petitioners, when they are buying timber to pay tax in advance and when selling to collect tax from the buyer. These, payments and collections are subject to the relevant assessment. None of the petitioners stand prejudiced in any manner. Requiring an assessee to collect tax on an incidence of taxation subject to final assessment cannot be said to be arbitrary. Circulars of Central Board for Direct Taxes will no doubt loose force on the statute undergoing subsequent amendments. The words used in Section 206C are clear. Therefore, there is no need to look into the legislative history or the marginal notes to interpret or understand Section 206C of the Act of 1961. K.P. Varghese (1981 (9) TMI 1 - SUPREME COURT) has no manner of application in the facts of the present case. It cannot be said that, it is beyond the legislative competence of the legislature to legislate amendments to Section 206C so as to widen its area of applicability or modulate its applicability to suit the emerging needs of the society.
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