TMI Blog2019 (4) TMI 785X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - W.P. No. 1806 of 2005, W.P. No. 206 of 2013, W.P. No. 212 of 2013, W.P. No. 745 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia and sold thereafter as a seller of the same within the country. In support of such contentions, learned advocate appearing for the petitioners has referred to the budget speech of the Hon ble Finance Minister of the Central Government made while presenting the union budget for the relevant year. He has referred to various passages of such budget speech. He has referred to the insertions made in Section 206C of the Act, of 1961 by Section 79 of the Finance Act, 1992. He has also referred to the amendments made to Section 206C of the Act of 1961 subsequent thereto. In particular, he has referred to amendments brought about in Section 206C of the Act of 1961 by Section 87 of the Finance Act, 2003 with effect from June 1, 2003 and by Section 81 of the Finance Act, 2012 with effect from July 1, 2012. According to the learned Advocate appearing for the petitioners, the legislative intent of the various provisions of section 260C of the Act of 1961 is to bring the forest contractors within the tax net. A buyer and seller of timber from the forest contractor are liable to pay tax. All other transactions are exempt from taxation. The petitioners are outside the purview of section 206C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... country. Such provisions cannot be said to be unreasonable or violative of any provision of the Constitution of India. Referring to the contention of the petitioners that, the petitioners are not liable to deduct tax at source, learned advocate appearing for the respondents has submitted that, the petitioners come within the definition of buyer as presently obtaining. According to him, reliance upon circular number 660 dated September 15, 1993 of Central Board for Direct Taxes and other similar circulars of Central Board for Direct Taxes are misplaced. No circular is above the statute. A circular can, at best clarify any provision of the statute, and cannot be treated as above the statute. In the present case, the subsequent amendments to the statute have rendered the circulars prior to such amendments irrelevant. Consequently, circulars of Central Board of Direct Taxes obtaining prior to the latest amendment to section 206C of the Act of 1961 are not relevant and applicable. According to him, as the definition of buyer obtaining in Section 206C of the Act of 1961 stands, the petitioners are liable to collect tax at source and face any proceedings for their failure in not doin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) to (11) of Section 206C of the Act of 1961 subsequently. Section 206C of the Act of 1961 underwent amendments in 2003 by virtue of Section 87 of the Finance Act, 2003 and in 2012 by virtue of section 81 of the Finance Act, 2012. As noted above, the Finance Act, 2012 introduced the explanation of buyer to sub-section (1) of Section 206C of the Act of 1961. The explanation of buyer as introduced by Finance Act, 2012 is as follows:- ( aa) buyer with respect to- ( i) sub-section (1) 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,- ( A) a public sector company, the Central Government, a State Government, and an embassy, a High Commission, legation, commission, consulate and the trade representation, of a foreign State and a club; or ( B) a buyer in the retail sale of such goods purchased by him for personal consumption; ( ii) sub-section (1D) means a person who obtains in any sale, goods of the nature specified in the said sub-section; Explanation (aa)(ii) was deleted by the F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is hardly any need to look into the marginal note or the history of the amendment to interpret the statute. In the present case, the word buyer as obtaining in Section 206C(1) of the Act of 1961 has been explained in explanation (aa). Section 206C comes under Chapter XVII of the Act of 1961. Chapter XVII of the Act of 1961 deals with collection and recovery of tax. It is divided into various sub-chapters. One of the sub-chapters is BB which deals with collection at source. Section 206C of the Act of 1961 comes under such sub-chapter BB dealing with collection at source. Section 206C of the Act of 1961 requires every person being a seller, at the time of debiting the amount payable by the buyer to the account of the buyer or at any time of receipt of such amount from such buyer, in cash or by any negotiable instrument or by any other mode, whichever is earlier, collect from the buyer of any goods of the nature specified in Column 2 of the table appended to such section, a sum equal to the percentage specified in the corresponding entry in Column 3 of such table, of such amount as income tax. Essentially, it requires the seller to collect tax at source from the buyer. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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