VISHAL ENTERPRISES Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner-firm is engaged in the business of buying and selling timber obtained from the State Government and its agencies and is an income-tax assessee. It has challenged, in this writ petition, the Press Note dated June 23, 1988, issued by the Ministry of Finance, a copy of which is produced as annexure A to the writ petition.

(2.) BY the Finance Act of 1988, section 44AC, which is a special provision for computing profits and gains from the business of trading in certain goods, was inserted with effect from April 1, 1989, and made applicable to the period relevant for the assessment year 1989-90. BY the application of this provision, a certain percentage of the purchase price paid or payable by the buyer in respect of specified 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 Income-tax Act.

(3.) SECTION 206C introduced by the same Finance Act provides for the procedure to collect the said sum from the buyer as specified in the table annexed to section 206C, with reference to each class of goods referred to therein. This has come into force on June 1, 1988.