2006 (12) TMI 131

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....ht in law in setting aside the orders of the lower authorities holding that the assessee being L-13 licensee is governed by proviso to section 44AC and, therefore, not liable to collect tax at source?" 2. The assessee is a dealer in country liquor and holds L-13 licence, as wholesale dealer. The Assessing Officer raised demand against the assessee for failure to collect tax as a whole-seller under section 206C(6) of the Income Tax Act, 1961 (for short, 'the Act'). The appellate authority upheld the order of the Assessing Officer but the Tribunal following judgment of this Court in K.K. Mittal and Co. v. Union of India and others, [(1991) 187 ITR 208], upheld the plea of the assessee that the tax had to be collected by the distillery from....

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....not disputed by the department that the petitioners on the basis of their L-14A licences purchased the country liquor from the wholesalers who are L-13 licensees." 4. In K. K. Mittal & Co.'s case [(1991) 187 ITR 208 (P&H)], which has been followed by the Tribunal, this Court concurred with the following observations of the Himachal Pradesh High Court in Gian Chand Ashok Kumar and Co. v. Union of India, (1991) 187 ITR 188 (page 202):- "Examination of the fundamental provisions governing the grant of L-13 licences clearly shows that the provisions of sections 44AC and 206C were unduly harsh and arbitrary in their application to cases where the transaction was strictly to be carried out in accordance with specific provisions. It was this....