GOVERNMENT OF MADHYA PRADESH Vs. TAX RECOVERY OFFICER

JUDGEMENT

(1.) SHRI V.K. Shukla, learned Dy. Advocate General for the petitioner/State.

(2.) SHRI Rohit Arya, learned senior counsel with Shri S. Lal for the respondents.

(3.) STATE Government had granted various quarry leases to private persons. The quarry leases have been granted in accordance to the Mines and Minerals (Development and Regulation) Act, 1957 and the M.P. Mining Mineral Rules, 1996, royalty as per statutory provision has been collected and in some cases the lease period has expired. Proceedings have been initiated by the IT Department on the ground that after introduction of Section 206, Sub -section (l)(c) [sic -s. 206C(1C)] in the IT Act, w.e.f. 1st Oct., 2004 by Finance Act, 2004 every person who grants lease or licence in respect of any mine or quarry to another person for the purpose of business is required to debit an amount equal to 2 per cent of the total amount payable by the licensee by way of tax and deposit the same with the IT Department, on the ground that tax from lease holders in accordance to the aforesaid provisions has not been collected, action is taken by the IT Department and therefore, the State Government has filed this petition challenging the action and demand notices issued and the coercive steps initiated for recovery of income -tax.