TaxTMI 
TaxTMI 
2025 (6) TMI 2041
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....mon question of law and fact is involved and common substantial question of law has been formulated in all these connected tax appeals, they are tagged together and heard together and are being disposed of by this common judgment. 2. This batch of tax appeals have been preferred under Section 260A of the Income Tax Act, 1961 (for short, 'the IT Act') calling in question legality, validity and correctness of judgment & order dated 21-7-2023 passed by the Income Tax Appellate Tribunal (ITAT), Raipur Bench, Raipur in respective tax appeals affirming the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, by which the ITAT has dismissed the appeals of the assessee upholding the order of the CIT (Appeals) in which following common substantial question of law has been formulated separately in each appeal: - "Whether provisions of Section 206(1C) of the Income Tax Act, 1961 are applicable for collecting TCS from offenders who do illegal mining or transportation/storage without having lease or license or have not entered into the contract for transfer of right in Mines or Quarry and from whom Compounding Fine is collected as per pro....
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....der of the ITAT, as the ITAT has upheld the demand of TCS, interest and penalty for the assessment year 2018-19. 6. Mr. Rahul Tamaskar, learned Government Advocate appearing for the State of Chhattisgarh/appellant/ assessee, would submit that tax at source (TCS) has to be collected by the appellant/assessee under Section 206C(1C) of the IT Act from lease holder or license holder and person must be either lease holder or license holder by which the assessee has entered into a contract or otherwise transfers any right or interest in whole or in part in any parking lot or toll plaza or mine or quarry, to another person, and in this case, the assessee must be liable to collect royalty. He would further submit that in case of illegal mining, the offender is neither a lease holder nor a license holder and the assessee has not entered into contract or not having any personal right or interest. He would also submit that the amount to be paid is not in the form of royalty but a fine to drop the prosecution against the offender and as such compounding fees has been charged by virtue of the provision contained in Section 23A of the Mines and Minerals (Development and Regulation) Act, 1957 ....
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....sfers any right or interest either in whole or in part in any parking lot or toll plaza or mine or quarry, to another person, other than a public sector company (hereinafter in this section referred to as "licensee or lessee') for the use of such parking lot or toll plaza or mine or quarry for the purpose of business shall, at the time of debiting of the amount payable by the licensee or lessee to the account of the licensee or lessee or at the time of receipt of such amount from the licensee or lessee in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, collect from the licensee or lessee of any such licence, contract or lease of the nature specified in column (2) of the Table below, a sum equal to the percentage, specified in the corresponding entry in column (3) of the said Table, of such amount as income-tax: TABLE Sl.No. Nature of contract or licence or lease, etc. Percentage (1) (2) (3) (i) Parking lot Two per cent. (ii) Toll plaza Two per cent. (iii) Mining and quarrying Two per cent. Explanation 1.-For the purposes of this sub-section, "mining and quarrying" shall not include mining....
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....nment may, by notification in the Official Gazette, amend the Second Schedule so as to enhance or reduce the rate at which royalty shall be payable in respect of any mineral with effect from such date as may be specified in the notification: Provided that the Central Government shall not enhance the rate of royalty in respect of any mineral more than once during any period of three years." 12. By virtue of Section 9(1) of the MMDR Act, the holder of a mining lease is obliged to pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee from the leased area at the rate for the time being specified in the Second Schedule in respect of that mineral and the Central Government is empowered to amend the Second Schedule so as to enhance or reduce the rate at which royalty shall be payable in respect of any mineral with effect from such date as may be specified in the notification. 13. Section 23A of the MMDR Act provides for compounding of offences, which states as under: - "23A. Compounding of offences.-(1) Any offence punishable under this Act or any rule made thereunder may, either before or afte....
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....l extraction of minerals and every such person shall be punishable with simple imprisonment for a term which may extend to one year or with fine which may extend to twenty five thousand rupees or with both. (2) Whenever any person is found extracting or transporting mineral in contravention of the provisions of these rules, the Collector/ Joint Director/Deputy Director/Mining Officer/Assistant Mining Officer/Mining Inspector or any Officer authorised by him or Zila Panchayat/Janpad Panchayat/Gram Panchayat, may seize the minerals and its products together with all tools, equipments and vehicles used in committing such offence. (3) The officer seizing such illegally extracted or transported mineral or its product, tools, equipments and vehicles shall give a receipt of the same to the person from whose possession such things were so seized and shall make report to the Magistrate having jurisdiction to try such offence. (4) The property so seized under sub-rule (2) shall be released by the officer who seized such property on execution of a bond to the satisfaction of the officer by the persons from whose possession such property was seized. It shall be produ....
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....o presumption as to tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used." 19. Further, the Supreme Court in the matter of CST v. Modi Sugar Mills Ltd. AIR 1961 SC 1047 has observed as under: - "In interpreting a taxing statute, equitable consideration are entirely out of place. Nor can taxing statutes be interpreted on any presumptions or assumptions. The court must look squarely at the words of the statute and interpret them. It must interpret a taxing statute in the light of what is clearly expressed; it cannot imply anything which is not expressed; it cannot import provisions in the statutes so as to supply any assumed deficiency." 20. In the matter of CIT v. Calcutta Knitwears (2014) 6 SCC 444, the Supreme Court has held that while interpreting fiscal statutes, the court must not add or substitute the word in the provision and their Lordships observed as under: - "28. This Court in Tata Consultancy Services v. State of A.P. [(2005) 1 SCC 308] has ascribed plain meaning to the terms "computer" and "computer programme" in a fiscal statute and reiterating the proposition laid down in IRC case [IRC v. Rossmi....
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....y, logic, ethics and morality have no role to play. Nothing is to be read in, nothing is to be implied; one can only look fairly at the language used and nothing more and nothing less. (J. Srinivasa Rao v. State of A.P. [(2006) 12 SCC 607: (2006) 13 Scale 27] and Jagdambika Pratap Narain Singh v. CBDT [(1975) 4 SCC 578 : 1975 SCC (Tax) 356 : (1975) 100 ITR 698].)" 21. Further, the Supreme Court in the matter of CIT v. Vatika Township P. Ltd. (2014) 367 ITR 466 (SC) has quoted with approval the following observation of Lord Cairns in the matter of Partington v. Attorney General [1869] LR 4 HL 100: "As I understand the principle of all fiscal legislation it is this : If the person sought to be taxed comes within the letter of the law he must be taxed, however, great the hardship may appear to the Judicial mind to be. On the other hand, if the Crown, seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however, apparently within the spirit of the law the case might otherwise appear to be." 22. Reverting to the facts of the present case in light of the aforesaid principles of law laid down by their Lordships of the Supre....