The interpretation and application of Sections 44AC and 206C of the Income-tax Act, 1961, by the court in the context of the present cases were governed by several decisions of the court, which had held that the State of Bihar was a "seller" within the meaning of the provisions and that the cost price of country spirit, excluding excise duty, was the basis for calculating the income tax to be collected at source.

1. In these applications the petitioners have, inter alia, questioned the vires of Sections 44AC and 206C of the Income-tax Act, 1961.

2. It is admitted that the said question is pending before the Supreme Court of India in Transfer Petition No. 42 of 1984 : Bihar Excise Vendors Association V/s. Union of India and, as such, in these writ applications we are not deciding the said question. We further make it clear that this decision shall be governed by the ultimate decision which may be rendered by the Supreme Court of India in the aforementioned case. However, as the matter is now fully covered by several decisions of this court, we dispose of these writ applications at this stage.

3. These writ applications relate to the Districts of Hazaribagh, Ranchi, Giridih, Dhanbad, Bokaro, Aurangabad, Gaya and other places. Sections 44AC and 206C of the Income-tax Act read thus :

"Section 44AC.--Special provisions for computing profits and gains from the business of trading in certain goods.- (1) Notwithstanding anything to the contrary contained in Sections 28 to 43C, in the case of an assessee, being a person other than a public sector company (hereafter in this section 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 (hereafter 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."

Provided that nothing contained in this clause shall apply to 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, . .

(2) For the removal of doubts, it is hereby declared that the provisions of Sub-section (1) shall not apply to a buyer (other than a buyer who obtains any goods from any seller which is a public sector company), in the further sale of any goods, obtained under or in pursuance of the sale under Sub-section (1).

(3) In a case where the business carried on by the assessee does not consist exclusively of trading in goods to which this section applies and where separate accounts are not maintained or are not available, the amount of expenses attributable to such other business shall be an amount which bears to the total expenses of the business carried on by the assessee the same proportion as the turnover of such other business bears to the total turnover of the business carried on by the assessee.

Explanation.--For the purposes of this section, "seller" means the Central Government, a State Government or any local authority or corporation or authority established by or under a central, State or provincial Act, or any Company, or firm, or co-operative society."

"206C(1).--Every person, being a seller shall, at the time of debiting of the amount payable by the buyer to the account of the buyer or at time of receipt of such amount from the said buyer in cash or by the issue of a cheque or draft 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 below, a sum equal to the percentage specified in the corresponding entry in column (3) of the said Table, of such amount as income-tax : 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 purposes of manufacturing, processing or producing articles or things and not for trading purposes, the provisions of this subsection shall not apply so long a