Patna High Court
Bharat Prasad Choudhary And Shambhu ... vs Union Of India (Uoi) And Ors. on 20 May, 1996
Equivalent citations: [1998]229ITR363(PATNA)
Bench: D.P. Wadhwa, S.J. Mukhopadhaya
JUDGMENT
1. As common points of law are involved in all the writ petitions, they have been heard together and disposed of by this common order at the stage of admission, as agreed by the parties.
2. Shri Bharat Prasad Choudhary, petitioner in C. W. J. C. Nos. 5038 of 1996, 5039 of 1996 and 5040 of 1996, has challenged a common order dated November 8, 1995, passed by the Commissioner of Income-tax (Appeals), Patna, by which earlier order dated March 1, 1995, has been withdrawn and assessments relating to the periods 1990-91, 1991-92 and 1992-93 have been confirmed. As a result, it has been held that the "purchase price" will include excise duty for the purpose of Section 44AC of the Income-tax Act, 1961.
3. So far as the petitioner, Shambhu Prasad, is concerned, he has challenged the assessment orders dated March 1, 1993, and March 4, 1993, as well as notice of demand to that effect. By the aforesaid orders, assessments for the periods 1990-91 and 1991-92, the assessing authority has included excise duty within the "purchase price" for the purpose of Section 44AC of the Income-tax Act. The orders passed by the Commissioner of Income-tax, Patna, dated February 16, 1996, confirming the aforesaid assessment orders, are also under challenge.
4. Both the petitioners, namely, Bharat Prasad Choudhary and Shambhu Prasad, are the licensees of a country spirit shop. Assessments were made by the assessing authority for the periods aforesaid under the Income-tax Act. The assessing authority held that the "purchase price" will include excise duty for the purpose of Section 44AC of the Income-tax Act.
5. The petitioner, Bharat Prasad Choudhary, filed three different appeals before the Commissioner of Income-tax (Appeals), Patna, challenging the assessment orders for the aforesaid periods 1990-91, 1991-92 and 1992-93. The appellate authority by one common order dated March 1,1995, decided all the three appeals in favour of the petitioner, Bharat Prasad Choudhary. Taking note of a decision of this court in Ramjee Prasad Sahu v. Union of India [1993] 202 ITR 800 ; equivalent to [1993] P. L. J. R. 555, the appellate authority held that the "purchase price" does not include the excise duty for the purpose of Section 44AC of the Income-tax Act, read with Section 206C of the Income-tax Act and directed the assessing authority to compute the deemed income in respect of the cost price paid to the whole-seller plus sales tax, if any, cost of bottle, label, selling charges, etc., for the purpose of "purchase price". Subsequently, the Commissioner of Income-tax (Appeals), Patna, given show cause notice to the petitioner, Bharat Prasad Choudhary, with respect to the aforesaid three assessment years and by all the three common impugned orders dated November 8, 1995, withdrew the earlier order dated March 1, 1995. In effect, he has confirmed the original orders of assessment passed earlier with respect to the three aforesaid assessment orders. By the impugned order dated November 8, 1995, it has been held that there was a mistake which was apparent from the record in the matter of computation of deemed income and thereby directed to include "excise duty" within "purchase price" for the purpose of Section 206C of the Income-tax Act.
6. With respect to Shambhu Prasad, the assessment orders have been issued on March 1, 1993, and March 4, 1993, with similar proposition, by including excise duty within "purchase price", for the purpose of Section 20GC of the Income-tax Act.
7. In the case of Ramjee Prasad Sahu v. Union of India and analogous cases, in [1993] 202 ITR 800 ; [1993] 2 P. L. J. R. 555, this court dealt with Section 206C of the Income-tax Act. This court held that the income-tax at 15 per cent, is to be collected by the seller (whole-seller or manufacturer) from the retail vendors only on the amount paid as cost price to the seller, but such tax is not to be collected or to be paid, on the amount deposited by the retail vendor by way of excise duty directly with the State Government in terms of the procedure.
8. The validity of Section 44AC as well as Section 20GC of the Income-tax Act, 1961, recently came up for consideration before the Supreme Court, in the case of Union of India v. A Sanyasi Rao [1996] 219 ITR 330. The Supreme Court, while upholding the provisions of sections 44AC and 206C of the Income-tax Act, 1961, held those sections a valid piece of legislation. It further held that Section 44AC is only an adjunct to and explains the provisions of Section 206C of the Act and does not dispense with the regular assessment. It further held that the aforesaid sections do not dispense with the regular assessment, as provided in accordance with sections 28 to 43C of the Act.
9. From the aforesaid findings of this court in the case of Ramjee Prasad Sahu v. Union of India [1993] 202 ITR 800 and of the Supreme Court in the case of Union of India v. A. Sanyasi Rao [1996] 219 ITR 330, it is apparent that there is no conflict of decisions and the respondents cannot dispense with the regular assessment in terms of the provisions of Sections 28 to 43C of the Act.
10. Further, it is clear from the decision of this court in the case of Ramjee Prasad Sahu [19931 202 ITR 800, that so far as Section 206C of the Act is concerned, in pursuance of the said provision, no tax is to be collected or is to be paid on the amount deposited by a retail vendor by way of excise duty directly with the State Government.
11. In the aforesaid background, it is evident and clear that the orders passed by the Commissioner of Income-tax (Appeals), Patna, all dated November 8, 1995, in C. W. J. C. Nos. 5038, 5039 and 5040 of 1996, have been so passed without taking note of the aforesaid facts and decisions of this court and the Supreme Court. The same: is the position with regard to the assessment orders dated March 1, 1993, and March 4, 1993, passed in C. W. J. C. Nos. 5041 and 5042 of 1996. They are accordingly set aside. However, this order will not stand in the way of the respondents to proceed in the matter, in accordance with law.
12. All the writ petitions are disposed of with the aforementioned observations.