Section 206C and liquor licences: no tax collection obligation where licence fee does not create a right to receive specific goods.

Section 206C of the Income-tax Act applies only where payment to the seller gives the payer a right to receive specific goods or to collect them under the statutory scheme. A Government liquor licence merely permits the licensee to conduct liquor trade and the licence fee does not, by itself, confer a right to lift particular goods from a manufacturer or supplier. On that construction, the licensee was not a "buyer" within section 206C, so the provision did not apply to Government licences for liquor trade. The SC dismissed the special leave petition.

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Issues: Whether section 206C of the Income-tax Act, 1961 applies to Government liquor licences where the licensee pays licence fee but acquires no right to lift specific goods until an order is placed on the manufacturer or supplier.

Analysis: Section 206C applies where payment to the seller results in the buyer obtaining specific goods mentioned in the statutory table or a right to collect or receive those goods by virtue of that payment. A liquor licence merely permits the licensee to carry on trade in the commodity; the licence fee does not itself confer a right to receive the goods. The expression "buyer" in the section refers to a person who, by payment, acquires a right to receive specific goods and does not cover a person who is only allowed to conduct business in that trade.

Conclusion: Section 206C was not attracted to Government licences permitting liquor trade, as the licensee was not a "buyer" of goods within the meaning of the provision. The special leave petition was dismissed.

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