UNION OF INDIA VS OM PRAKASH S.S. & COMPANY
2001 P T D 2677
[248 I T R 105]
[Supreme Court of India]
Present: B.N. Kirpal and GIs. Ruma Pal, JJ
UNION OF INDIA and another
versus
OM PRAKASH S.S. & COMPANY and another
Petition for Special Leave to Appeal (Civil) No.3797 of 2001, decided on 19/02/2001.
(Petition under Article 136 of the Constitution of India against the judgment and order, dated February 22, 2000, of the Punjab and Haryana High Court in C. W. P. No. 1450 of 2000).
Income‑tax‑‑‑
‑‑‑‑Collection of tax at source‑‑‑Liquor trade‑‑‑Licensee‑‑‑Provisions not attracted on licences issued by Government permitting licensee to carry on trade in liquor‑‑‑Licence fee‑‑‑No collection of tax at source‑‑‑ "Buyer", meaning of‑‑‑Indian Income Tax Act, 1961, S.206C.
To licence fees paid for licences issued by the Government permitting the licensee to carry on liquor trade, the provisions of section 206C of the Income Tax Act, 1961, for collection of tax at source are not attracted, as the licensee does not fall within the concept of "buyer" referred to in that section. The payment made by the licensee by way of licence fee does not ipso facto entitle the licensee to lift goods. For obtaining the goods mentioned in the Table appended to the section, the licensee has to 'place an order on the manufacturer or supplier of the goods and it is at that point of time that section 206C would get attracted.
"Buyer" means a person who, by virtue of the payment, gets a right to receive specific goods and not one who is merely allowed/permitted to carry on business:
Naresh Kumar & Co. v. Union of India (2000) 243 ITR 760 (P&H) implidely affirmed.
Mukul Rohatgi, Additional Solicitor‑General of India (Pritesh Kapoor and V.B. Balaram Das, Advocates with him) for Petitioner.
ORDER
It is quite evident that section 206C of the Income. Tax Act, 1961, refers to a case where by reason of the payment to the seller the producer gets specific goods mentioned in the Table to the said section or gets a right to collect or receive those goods by virtue of that payment. In the instant case, when the Government issues a licence, it only enables the licensee to carry on trade or business in that item. The payment made by the licensee by way of licence fee does not ipso facto entitle the licensee to lift the goods For obtaining the goods mentioned in the Table, the licensee has to place an order on the manufacturer or the supplier of the said goods and it is at that point of time that section 206C would get attracted.
The reliance placed on the Explanation to subsection (11) of misplaced as is evident from what is stated hereinabove. "Buyer" would mean where a person by virtue of the payment gets a right to receive specific goods and to where he is merely allowed/permitted to carry on business in that trade. It is for this reason that we had earlier dismissed the special leave petitions and any observations of the High Court not in consonance with this may be not strictly correct but the fact remains that to licences issued by the Government permitting the licensee to carry on liquor trade the provisions of section 206C are not attracted as the licensee does not fall within the concept of "buyer" referred to in that section. Buyer has to be a buyer of goods and not merely a person who acquires a licence to carry on, the business.
Hence, the special leave petition is dismissed.
M.B.A/337/FC ?????????????????????????????????????????????????????????????????????? Petition dismissed.