LPA No.134 of 1993 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. LPA No134 of 1993 Date of decision: 16.11.2010 Union of India -----Appellant Vs. M/s Fair Deal Trading Co. and others ----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Vivek Sethi, Advocate for the appellant. Mr. J.P.Sharma, Advocate for respondents. Mr. D.N.Ganeriwala, Advocate for respondent No.49. Adarsh Kumar Goel,J. 1. This appeal has been preferred by the revenue against judgment of learned Single Judge restraining the revenue from collecting tax at source on the amount of excise duty paid by the assessee at the time of obtaining distillery permits. 2. Case of the assessee in the writ petition was that he obtained licences under the provisions of the Punjab Excise Act, 1914 (for short, ‘the Excise Act’) for retail vend of country spirit. He paid licence fee. He also obtained permits for purchasing liquor from the distilleries for further sale at their vends. They paid price of the liquor purchased as well as excise duty. The distilleries sought to deduct tax at source under section 206C of the Income 1 LPA No.134 of 1993 Tax Act, 1961 (for short, ‘the Income Tax Act’) which requires every seller to collect from buyer of goods of the nature mentioned therein tax at source. The goods mentioned include alcoholic liquor for human consumption. Contention raised on behalf of the assessee was that the excise duty paid while obtaining permit was not part of purchase price. This plea was upheld by learned Single Judge with the following observations:- “In my opinion, a plain reading of section 206C of the Act leaves no room for doubt that the quantum of the amount on which the tax is to be collected at source by the seller has to be only that amount which is to be paid to the seller as a price at the time of the sale and cannot by any stretch of reasoning be held to include the excise duty which has already been paid to obtain the permit to enable the licensee to purchase the liquor.” 3. The period for which tax deduction at source was involved is financial year 1992-93. As the assessment may have already been made and tax liability crystallised, question whether the tax was liable to be deducted at source on the amount in dispute, has thus, become academic. 4. Learned counsel for the revenue does not dispute that the matter may have become infructuous as whatever tax liability may be, may have already been crystallised. Accordingly, the appeal is dismissed as infructuous. However, we give liberty to either party to have the matter revived, if any cause of action 2 LPA No.134 of 1993 relating to deduction of tax at source in respect of the period in question still survives. (Adarsh Kumar Goel) Judge November 16, 2010 (Ajay Kumar Mittal) ‘gs’ Judge 3