B.Subhashan Reddy, C.J.: The above batch of writ appeals have been filed questioning the orders of the learned single Judge, in striking down Circular No.681, dated 8.3.19994, issued by the Central Board of Direct Taxes on the ground of it being ultra vires Sec.194-C of the Income Tax Act, 1961 (hereinafter referred to as the Act).

2. Sec.194-C of the Act obligates any person paying any amount due to a contractor in pursuance of a contract, to deduct a particular percentage of amount as income tax. This can be called as tax deduction at source. The assessor, who are transport contractors and entitled for payment for carriage of goods, were aggrieved by the action of the income tax authorities in seeking to deduct the amount at source by invoking Sec.194-C of the Act. Their contention was that the circular, which has been issued authorizing tax deduction at source was illegal and ultra vires, as the substantive law i.e., Sec.194-C of the Act did not authorize any tax deduction at source for mere carriage of goods by transportation in motor vehicles. This contention found favour with the learned single Judge. Accordingly, the said circular was set at naught.

3. Mr.T.C.A. Ramanujam, lea

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