TaxTMI 
TaxTMI 
2003 (4) TMI 81
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....Wholesale Shop of Country Liquor) Rules, 2001 vide annexure 2 to the petition. As regards retail licences, the U.P. Excise (Settlement of Licenses for Retail Sale of Country Liquor) Rules, 2001, provided for grant of licence on the terms and conditions mentioned in the rules. True copy of the Retail Rules has been annexed as annexure I to the writ petition. According to the revised policy, a distillery, which wanted to sell its country liquor in any district of Uttar Pradesh, has to obtain a wholesale license known as CL-2A. The petitioner has obtained wholesale licences and has opened CL-2A depots in various districts of Uttar Pradesh. A true copy of the Wholesale Rules has been annexed as annexure 2 to the writ petition. Similarly, a retailer has to obtain a licence in Form No. CL-5C. A retailer licensee can sell the liquor at its retail outlets, only at prices fixed by the State. The supply of country spirit from the distilleries to the wholesale shop of the petitioner is covered by PD-25 pass and all the sales had to be recorded in Part III of WSI Register on day-to-day basis. The country liquor is to be supplied in bottles or pouches having security hologram approved and su....
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....by letter dated March 30, 2002, to the Finance Secretary, Government of India, with a copy to the Chairman, Central Board of Direct Taxes, New Delhi, has clarified that the State has fixed the prices at all levels (wholesale and retail) and has requested for a clarification for purpose of clause (a)(iii) of section 206C of the Income-tax Act vide annexure 5 to the writ petition. The expression sale price and retail price has been defined in section 4A of the Central Excise Act and rule 2(r) of the Standard of Weights and Measures Act (Packaged Commodities) Rules, 1977, which has been quoted in paragraph 17 of the petition. By the impugned order dated March 22, 2002, the Income-tax Officer (TDS), Muzaffarnagar, has held that the provisions of section 206C apply to the assessee and it is a defaulter for not collecting tax under that section. The petitioner had been directed to pay a sum of Rs. 8,77,89,674 as income-tax collectible and surcharge thereon vide annexure 6 to the writ petition. The said authority has also issued show cause notices to the petitioner dated April 30, 2002, and May 2, 2002, requiring him to submit details of sales of country liquor effected for the balance....
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....rading in country liquor, etc. When section 44AC was inserted in the year 1988, the proviso to section 44AC(1)(a) was not there. This provision was inserted in the year 1989 with effect from April 1, 1989, and the effect of the newly inserted provision was explained by the Central Board of Direct Taxes by its circular dated May 4, 1990, annexure 9, to the writ petition. It was noted by the Central Board of Direct Taxes that contracts for sale of liquor are not given by auction or any similar mode but licences to sell the liquor are issued to contractors by the State Government. Since the purchase and sale price has been fixed there is little scope for tax evasion. Hence, the application of the presumptive profit operated very harshly in such cases. To remove this hardship, the Amending Act, 1989, has amended section 44AC to provide that the provisions for the application of the rate of presumptive profit would not apply in a case where the liquor is not obtained by the buyer by way of auction and where the sale price of such liquor to be sold by the buyer is fixed by or under any State Act. These provisions were considered by the Full Bench of the Himachal Pradesh High Court in Sai....
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.... issue of CL-5C licences to persons who are permanent residents of other districts in U.P. or of other states of the Union of India. In all likelihood, if such outsider does not get a licence in a subsequent year, he will shift to his own native State. In such circumstances it will not be possible to get the return of income from him by the income-tax authorities of the particular district in which he carried on the business of retail sale of country liquor, It is alleged that in case, there is no collection of tax at source, such persons may not file the income-tax returns resulting in a situation in which Government dues, which are payable by such persons may not easily be realised. In paragraph 14 of the same it is alleged that it has been observed that the retailers are selling country liquors at different prices. The maximum sale price is not the only price, which can be charged from the consumer and a lower price can be charged. As regards the challenge to the jurisdiction of the Income-tax Officer (TDS), Muzaffarnagar, the respondents have refuted the same in paragraph 15 of the counter affidavit. In paragraph 22 of the same the respondents have sought to distinguish the ....