Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1992 Supreme(Pat) 273

IN THE HIGH COURT OF PATNA
S. B. SINHA AND G. C. BHARUKA, JJ.
Uma Shankar Prasad - Petitioner in CWJC 8283/91
Abhay Kumar .... Petitioner in CWJC 8284/91
Gulab Prasad .... Petitioner in CWJC 8285/91
Parma Shankar Prasad .... Petitioner in CWJC 8286/91
Versus
The Union of India and others ..... Respondents
Civil Writ Jurisdiction Case No. 8283 of 1991.
Civil Writ Jurisdiction Case No. 8284 of 1991.
Civil Writ Jurisdiction Case No. 8285 of 1991,
and
Civil Writ Jurisdiction Case No. 8286 of 1991.
Decided on : 9.8.1992

Advocates Appeared:
For the Petitioners: Mr. Rajendra Narain.
For the Union of India : Mrs. Renuka Sharma.
For the Commissioner Income-tax. - Mr. Rastogi, Standing Counsel.

The court interpreted the provisions of Section 206C of the Income-tax Act, 1961, and the statutory definition of 'purchase price' under Section 44AC, influencing the decision to dismiss the writ applications.

Headnote:
Income-tax Act - Country Spirit Purchases - Interpretation of Section 206C
Fact of the Case:

The petitioners sought to restrain the collection of income-tax on purchases of country spirit as licensed retail vendors. The licenses had expired, and the obligation to collect income-tax at source was provided under Section 206C of the Income-tax Act, 1961.
Finding of the Court:

The court found that the State of Bihar would be deemed the seller for the purposes of the impugned provisions, and excise duty payable was deemed to be part of the purchase price for the limited purpose of those provisions.
Issues: Interpretation of provisions under Section 206C of the Income-tax Act, 1961, and the applicability of excise duty as part of the purchase price.
Ratio Decidendi: The court's decision was influenced by the statutory definition of 'purchase price' under Section 44AC, which governed Section 206C as well.
Final Decision: The writ applications were dismissed, and no costs were awarded.

JUDGMENT

G. C. Bharuka, J.

These four writ application have been filed by the petitioners for issuance of an appropriate writ and/or directions restraining the Respondents from collecting any amount as income-tax in respect of the purchases of country spirit made by them from different warehouses in the State of Bihar as licensed retail vendors under the provisions of section 206C of the Income-tax Act, 1961 (hereinafter to be referred to as 'the Act' only).

2. Admittedly the petitioners had been holding licences for such period which has already expired on 31st March, 1992.

3. The obligation on the seller to collect income-tax at source had been provided under Section 206C of the Act read with Section 44AC thereof. The Finance Act, 1992, has deleted section 44AC and sub-section(1) to Section 206C has been substituted by a new sub-section.

The present set of cases are governed by the provisions as they existed till 31st March, 1992. After a thorough consideration of the then provisions, this Court in the case of State of Bihar and another Vs. The Commissioner of Income-tax, Bihar (C.W.J.C. No. 2429 of 1992 disposed of on 15th May, 1992) has held that with respect to the supplies of country liquor to the retail vendors, the State of Bihar will be deemed to be the seller for the purposes of the impugned provisions and keeping in view the statutory defintion of 'purchase price' given under Section 44AC, which was to govern Section 206C as well, the excise duty payable in respect of the said sale were also deemed to be a part of the purchase price for the limited purpose of those provisions.

4. In the above view of the matter, there is no merit in these writ applications and the same are, accordingly, dismissed. However, there shall be no order as to costs.

S. B. Sinha J. - I agree.

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