Cash Payment Limits for Milk Procurement Narrowly Defined, Disallowing Deductions for Pasteurization Companies Under Rule 6DD

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....HC adjudicated a tax dispute regarding cash payments exceeding Rs.20,000 for milk procurement. The court interpreted Rule 6DD restrictively, holding that the term 'producer' specifically refers to dairy farmers, not companies engaged in milk pasteurization. The court emphasized the legislative intent of Section 40A(3) to discourage cash transactions, noting both transacting entities had banking facilities. The court rejected the appellant's argument that pasteurization constitutes production, thereby disallowing cash payment deductions. The ruling prioritized the statutory objective of promoting banking transactions and narrowly construed exemption provisions. Decided in favor of revenue, the judgment reinforced strict compliance with cash payment restrictions.....