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TMI Blog2019 (4) TMI 785X X X X Extracts X X X X X X X X Extracts X X X X ..... ners in W.P. No. 1806 of 2005 are aggrieved by notices issued under Section 206C of the Income Tax Act, 1961. The other writ petitioners have challenged the constitutional validity of the amendment brought about by Section 81 of the Finance Act, 2012 with effect from July 1, 2012 with regard to the definition of the term "buyer" as appearing in clause (aa) of the explanation to subsection (11) of Section 206C of the Act, of 1961. Learned advocate appearing for the petitioners has submitted that, the petitioners purchase processed/sawn timber from the domestic and international markets. The petitioners are not forest contractor licensed/authorised by the operation of law to enter into forest and fell down trees. The vendors from whom the petitioners purchased the timber are also not forest contractors who are licensed/authorised to enter into the forest and fell down trees. According to him, the definition of "buyer" as obtaining in Section 206C of the Act, of 1961 is onerous for the petitioners. Section 206C was introduced to the Act, of 1961 with effect from June 1, 1988. It required every seller of timber obtained under a forest lease or by any other mode, to collect tax at sour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ractors as sellers and buyers of forest produce within the tax net and not retail purchase and sale of processed/sawn timber in the open market. According to him, the petitioners are resellers of the goods. Resellers of timber have been kept outside the scope and ambit of tax collection at source between the period 1992 till 2012. He has traced the history of Section 206C of the Act of 1961 since it came into operation on June 1, 1988 till the last amendment thereof. According to him, the amendments brought about by section 81 of the Finance Act, 2012 are not backed by any authority. Such amendments are contrary to the legislative intent as originally propounded in 1988. It runs contrary to well founded and time-tested exemptions granted to resellers of timber. It creates unlawful and hostile discrimination. It leads to intra class discrimination without any intelligible differentia thereby violating Article 14 of the Constitution of India. Learned advocate appearing for the respondents has submitted that, tax collection at source and tax deduction at source are not a tax like value added tax or Excise duty. Tax collected at source and tax deducted at source are collection of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that, a taxing statute has to be interpreted strictly. He has submitted relying upon 1970 (1) Supreme Court Cases 189 (Twyford Tea Company Limited & Anr. v. State of Kerela) that, the burden to prove discrimination lies with the petitioners. In the facts of the present case, the petitioners have not proved any hostile discrimination for the writ Court to intervene. Relying upon 1964 (1) Supreme Court Reports 29 (S.C. Prashar & Anr. v. Vasantsen Dwarkadas & Ors.) learned Advocate appearing for the respondent has submitted that, where the language of the enactment is clear, there is hardly any need to go into the marginal note or the history of law of amendment. He has distinguished the ratio of the judgment relied upon by the learned advocate for the petitioners as not applicable to the facts of the present case. He has submitted that, the petitioners are not entitled to any relief as prayed for in the present writ petition. The writ petitioner in W.P. No. 1806 of 2005 has challenged the notice dated June 23, 2004 issued under Section 206C of the Act of 1961. The seven other writ petitioners have challenged the constitutional validity of the definition of buyer in explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 206C was upheld in A. Sanyasi Rao (supra). The same challenges as thrown in the present writ petition were not there in A. Sanyasi Rao (supra) as, the explanation of "buyer" has been introduced to the statute subsequent to A. Sanyasi Rao (supra). In my understanding, the challenges thrown by the petitioners in the present writ petition requires consideration. The petitioners cannot be non-suited on the strength of the ratio of A. Sanyasi Rao (supra) alone. Sri Srinivasa Theater & Ors. (supra) has held that, fiscal statutes are not immune from attack based under Article 14 of the Constitution. However, Parliament and legislatures are accorded greater freedom and latitude, in the persons upon whom, and the situation and stages at which, it can levy tax. Ajmera Housing Corporation & Anr. (supra) has held that, a taxing statute is required to be construed strictly. There is no equity about a tax. In interpreting a taxing statute, the Court must squarely look at the words of the statute and interpret them. Considerations of hardship, injustice and equity are entirely out of place in interpreting a taxing statute. Twyford Tea Company Ltd. & Anr. (supra) has held that, the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents and collections are subject to the relevant assessment. Therefore, 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 (supra) 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.
In such circumstances I find no merit in the writ petition.
W.P. No. 1806 of 2005, W.P. No. 206 of 2013, W.P. No. 212 of 2013, W.P. No. 745 of 2013, W.P. No. 746 of 2013, W.P. No. 748 of 2013, W.P. No. 1061 of 2014, W.P. No. 1063 of 2014 are dismissed. No order as to costs. X X X X Extracts X X X X X X X X Extracts X X X X
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