RAMJEE PRASAD SAHU Vs. UNION OF INDIA

JUDGEMENT

(1.) THE only question which survives for our consideration in this set of writ applications is, as to whether a sum equal to 15 per cent. of the excise duty payable by the petitioners on account of purchase of country spirit can be collected as income-tax under the provisions of Section 206C of the Income-tax Act, 1961 (hereinafter in short, " the Act " only).

(2.) THE foundational facts as set out by the petitioners may briefly be stated as below. THE petitioners are retail vendors in country spirit, which is an alcoholic liquor meant for human consumption. This privilege has been acquired by them by participating in auction-cum-tender system of settlement of shops envisaged under the provisions of the Bihar Excise Act, 1915 (hereinafter, in short, " the Excise Act " only), and the Rules framed thereunder. Consequent upon the settlements, they have been granted licences in Form No. 26 by the respective Collectors on different dates for the period ending March 31, 1995. Copies of some of such licences have been annexed by some of the petitioners to the respective writ applications. THE State Government as a condition for grant of the said privilege has made it mandatory for the petitioners to lift a prescribed minimum quantity of liquor from the specified warehouses in every month. Sale of the country spirit is effected in sachets (polythene packs) by the wholesale licensee acquiring such privilege for the area concerned from the specified ware: houses, Messrs. S. K. G. Sugar Ltd., Patna, Messrs. Shri Shiv Shankar Chemical Industries (Bihar) Ltd., Bhagalpur, and Messrs. Kanpur Sugar Works Limited, Saran, and all these companies incorporated under the Companies Act, 1956, have acquired the privilege of supply in wholesale of country spirit from the respective warehouses to the petitioners. According to the statutory rules and directions, before taking the supply of the country spirit, the petitioners have to pay the cost price (i.e., purchase price), thereof by way of bank draft drawn in favour of the wholesaler and they have also to deposit the excise duty payable thereon in the Government treasury.

(3.) THESE principles have been spelt out by the apex court in a catena of decisions. Reference may be made to some of those, namely, Nashirwar v. State of M. P., AIR 1975 SC 360, liar Shankar v, Deputy Excise and Taxation Commissioner, AIR 1975 SC 1121 and Synthetics and Chemicals Ltd. v. State of U. P, [1990] 1 SCC 109 ; AIR 1990 SC 1927.