JUDGMENT
Bhawani Singh J.
1. Through this batch of writ petitions, the petitioners have challenged the validity of Sections 44AC and 206C of the Income-tax Act, 1961. These amendments were inserted by the Finance Act, 1988; and came into force from April 1, 1989 (assessment year 1989-90) and June 1, 1988, respectively. It is necessary, at this stage, to reproduce these provisions in extenso :
“44AC. Special provisions for computing profits and gains from the business of trading in certain goods.–(1) Notwithstanding anything to the contrary contained in Sections 28 to 43C, in the case of an assessee, being a person, other than a public sector company (hereafter in this section referred to as the ‘buyer’ ), obtaining in any sale by way of auction, tender or any other mode, conducted by any other person or his agent (hereafter in this section referred to as the ‘seller’ ),–
(a) any goods in the nature of alcoholic liquor for human consumption (other than Indian-made foreign liquor), a sum equal to forty per cent. of the amount paid or payable by the buyer as the purchase price in respect of such goods shall be deemed to be the profits and gains of the buyer from the business of trading in such goods chargeable to tax under the head ‘Profits and gains of business or profession’.
(b) the right to receive any goods of the nature specified in column (2) of the Table below, or such goods, as the case may be, a sum equal to the percentage, specified in the corresponding entry in column (3) of the said Table, of the amount paid or payable by the buyer in respect of the sale of such rights or as the purchase price in respect of such goods shall be deemed to be the profits and gains of the buyer from the business of trading in such goods chargeal e to tax under the head “Profits and gains of business or profession”.
TABLE
Sl. No.
Nature of goods
Percentage
(1)
(2)
(3)
(i)
Timber obtained under a forest lease.
Thirty-five per cent.
(ii)
Timber obtained by any mode other than under a forest lease.
Fifteen nor rent.
(iii)
Any other forest produce not being
timber.
Thirty-five per cent.
(2) For the removal of doubts, it is hereby declared that the provisions of Sub-section (1) shall not apply to a buyer (other than a buyer who obtains any goods from any seller which is a public sector company) in the further sale of any goods obtained under or in pursuance of the sale under Sub-section (1).
(3) In a case where the business carried on by the assessee does not consist exclusively of trading in goods to which this section applies and where separate accounts are not maintained or are not available, the amount of expenses attributable to such other business shall be an amount which bears* to the total expenses of the business carried on by the asses-see the same proportion as the turnover of such other business bears to the total turnover of the business carried on by the assessee.
Explanation.–For the purposes of this section, ‘seller’ means the Central Government, a State Government or any local authority or corporation or authority established by or under a Central, State or Provincial Act, or any company, or firm.”
“BB COLLECTION AT SOURCE
206C. Profits and gains from the business of trading in alcoholic liquor, forest produce, scrap, etc.–(1) Every person, being a seller referred to in Section 44AC, shall, at the time of debiting of the amount payable by the buyer referred to in that section to the account of the buyer pr at the time of receipt of such amount from the said buyer in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, collect from the buyer of any goods 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 on income comprised therein.
Table
Sl. No.
(1)
Nature of goods
(2)
Percentage
(3)
(i)
Alcoholic liquor for human
consumption (other than Indian-made foreign liquor).
Fifteen per cent.
(ii)
Timber obtained under a forest lease.
Fifteen per cent.
(iii)
Timber obtained by any mode other than under a
forest lease.
Five per cent.
(iv)
Any other forest produce not being
timber..
Fifteen per cent.
Provided that where the Assessing Officer, on an application made by the buyer, gives a certificate in the presecribed form that to the best of his belief, any of the goods referred to in the aforesaid Table are to
be utilised for the purposes of manufacturing, processing or producing articles or things and not for trading purposes, the provisions of this subsection shall not apply so long as the certificate is in force.
(2) The power to recover tax by collection under Sub-section (1)
shall be without prejudice to any other mode of recovery.
(3) Any person collecting any amount under Sub-section (1) shall pay within seven days the amount so collected to the credit of the Central Government or as the Board directs.
(4) Any amount collected in accordance with the provisions of this section and paid under Sub-section (3) shall be deemed as payment of tax on behalf of the person from whom the amount has been collected and credit shall be given to him for the amount so collected on the production of the certificate furnished under Sub-section (5) in the assessment made under this Act for the assessment year for which such income is assessable.
(5) Every person collecting tax in accordance with the provisions of this section shall within ten days from the date of debit or receipt of the amount furnish to the buyer to whose account such amount is debited or from whom such payment is received, a certificate to the effect that tax has been collected, and specifying the sum so collected, the rate at which the tax has been collected and such other particulars as may be prescribed.
(5A) Every person collecting tax in accordance with the provisions of this section shall prepare half-yearly returns for the period ending on 30th September and 31st March in each financial year, and deliver or cause to be delivered to the prescribed income-tax authority such returns in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed.
(6) Any person responsible for collecting the tax who fails to collect the tax in accordance with the provisions of this section, shall, notwithstanding such failure, be liable to pay the tax to the credit of the Central Government in accordance with the provisions of Sub-section (3).
(7) Without prejudice to the provisions of Sub-section (6), if the seller does not collect the tax or after collecting the tax fails to pay it as required under this section, he shall be liable to pay simple interest at the rate of two per cent. per month or part thereof on the amount of such tax from the date on which such tax was collectable to the date on which the tax was actually paid.
(8) Where the tax has not been paid as aforesaid, after it is collected, the amount of the tax together with the amount of simple interest
thereon referred to in Sub-section (7) shall be a charge upon all the assets of the seller.”
2. The Memorandum Explaining the Provisions in the Finance Bill, 1988, mentions the reasons and the objects with which these provisions were inserted. The same is reproduced as under (see [1988] 170 ITR (St.) 187) :
“New provisions to counteract tax evasion by liquor contractors, scrap dealers, dealers in forest products, etc.
25. Considerable difficulty has been felt in the past in making assessment of incomes in the case of persons who take contracts for sale of liquor, scrap, forest products, etc. It has been the Department’s experience that for taking such contracts, firms or associations of persons are specifically constituted and very often no trace is left regarding them or their members after the contract has been executed. Persons have also been found to have taken contracts in benami names by floating undertakings or associations for short periods. Since tax is payable in the assessment years in respect of the incomes of the previous years, the time by which the incomes from such sources become assessable, such persons are not traceable. At the time of assessment in these cases, either the accounts are not available or they are grossly incorrect or incomplete. Thus, even if assessments could be made on ex parte basis, it becomes almost impossible to collect the tax found due, either because it becomes difficult to establish the identity of the persons and trace them or because of the fact that the persons in whose names contracts are taken are men of no means.
With a view to combat large scale tax evasion by persons deriving income from such businesses, the Bill seeks to insert a new Section 44AC to provide for determination of income in such cases. Taking into account the experience gained in the past regarding the ratio of profit to the sale consideration the proposal is to provide that sixty per cent. of the amount paid or payable by such persons on sale would constitute income of the taxpayers, i.e., the buyer.
The provisions of this section will apply only to an assessee, being a buyer of any goods in the nature of alcoholic liquor for human consumption (other than Indian-made foreign liquor) or any forest produce, scrap or waste, whether industrial or non-industrial, or such other goods as may be notified by the Central Government, at the point of first sale. The word ‘seller’ connotes the Central Government, State Government or any local authority or corporation or authority established by or under a Central Act or any company. The provisions of this section shall not apply to any buyer in the second or subsequent sale of such goods.
This amendment will take effect from 1st April, 1989, and will, accordingly, apply to assessment year 1989-90 and subsequent years.
Further, with a view to facilitate collection of taxes from such asses-sees, it is proposed to introduce a new Section 206C to provide that any person, being a seller, referred to in Section 44AC, shall collect income-tax of a sum equal to twenty per cent. of the amount paid or payable by the buyer, as increased by a surcharge for purposes of the Union calculated on the income-tax at the rates in force. Such sum is required to be collected either from the buyer at the time of debiting the said amount to the account of the buyer or at the time of the receipt of that amount from the buyer, whichever is earlier. This mode of recovery of tax shall be without prejudice to any other mode of recovery. The tax so collected by the seller shall be paid to the credit of the Central Government or as the Board directs, within seven days from the date of collection. It will be treated as tax paid on behalf of the person from whom the amount has been collected and credit shall be given for such amount in the assessment made under this Act on production of a certificate.
The new section also provides that if a seller does not collect or after collecting fails to pay the tax, he shall be deemed to be an assessee in default in respect of the tax and the amount of the tax together with the amount of simple interest, calculated at the rate of two per cent. per month or part thereof, shall be a charge upon all the assets of the seller.
A new Section 276BB provides for prosecution of a person who fails to pay the tax collected at source for a period which shall not be less than three months but which may extend up to seven years and with fine.
These amendments will be made effective from 1st June, 1988.”
3. These provisions have been explained in the Notes on Clauses in the Finance Bill, 1988, and Clauses 15 and 40 are relevant on this aspect (see [ 1988] 170 ITR (St.) 154 and 162) :
“Clause 15 seeks to insert a new Section 44AC in the Income-tax Act.
The new section provides for determination of the income of an assessee, being a buyer of any goods in the nature of alcoholic liquor for human consumption (other than Indian-made foreign liquor) or any forest produce, scrap or waste, whether industrial or non-industrial, or such other goods as may be notified by the Central Government, in any sale by way of auction, tender or any other mode, conducted by the seller at a sum equal to sixty per cent. of the amount paid or payable by the buyer. The Central Government is also proposed to be empowered to exempt certain sales from the operation of this section, having regard to the amount involved in such sales, the nature of the goods and other factors. It is also being provided that the section shall not apply to a buyer in the further sale of any goods obtained under or in pursuance of the said sale.
The Explanation to the section defines the expression ‘seller’ to mean the Central Government, a State Government or any local authority or corporation or authority established by or under a Central, State or Provincial Act, or any company.
This amendment will take effect from 1st April, 1989, and will, accordingly, apply in relation to the assessment year 1989-90 and subsequent years.”
“Clause 40 seeks to insert a new sub-heading ‘BB–Collection at source’ and a new Section 206C after Section 206B of the Income-tax Act.
The new section provides that every person, being a seller referred to in Section 44AC, shall at the time of debiting of the amount payable by the buyer referred to in that section to the account of the buyer or at the time of receipt of such amount from the buyer, collect from him a sum equal to twenty per cent. of such amount as income-tax on income comprised therein.
Sub-section (2) provides that the power to recover income-tax by collection will be without prejudice to any other mode of recovery.
Sub-sections (3) and (4) provide that the income-tax collected by the seller shall be paid within seven days of the amount so collected to the credit of the Central Government or as the Board directs. The tax so paid to the credit of the Central Government shall be treated as tax paid on behalf of the person from whom the amount has been collected and credit shall be given for such amount in the assessment made under this Act on production of a certificate.
Sub-section (5) provides that the seller shall within ten days from the time of debit or receipt of the sum furnish to the buyer a certificate to the effect that tax has been collected.
Sub-section (6) provides that any person responsible for collecting the tax who fails to collect it shall, notwithstanding such failure, be liable to pay the tax to the credit of the Central Government.
Sub-section (7) provides that if a seller does not collect, or after collecting fails to pay the tax, he will be required to pay simple interest at the rate of two per cent per month or part thereof on the amount of such tax.
Sub-section (8) provides that if the tax collected is not paid to the credit of the Central Government, the amount of tax together with the amount of simple interest shall be a charge upon all the assets of the seller.
This amendment will take effect from 1st June, 1988.”
4. As a result of these amendments, the aggrieved petitioners not only questioned these amendments in various High Courts but also moved
representations highlighting their grievances against this measure. However, their challenge had been confined to the competence of Parliament to enact the same, its arbitrariness, its violation of Article 19(1)(g), principles of natural justice, the stage for imposition of tax and the basis and extent of the calculations. The challenge failed before the Kerala High Court in P. Kunhammed Kutty Haji v. Union of India [1989] 176 ITR 481 and T.K. Aboobacker v. Union of India [1989] 177 ITR 358.
5. A similar question arose before the Andhra Pradesh High Court in A. Sanyasi Rao v. Government of Andhra Pradesh [1989] 178 ITR 31. This judgment was later on followed by the Punjab and Haryana High Court in Civil Writ Petition No. 3947 of 1989 and other connected matters decided on August 2, 1989 (Sat Pal and Co. v. Excise and Taxation Commissioner [ 1990] 185 ITR 375).
6. As already observed, the Union of India having received representations, moved a further amendment to Section 44AC of the Income-tax Act by virtue of Section 10 of the Direct Tax Laws (Amendment) Act, 1989, which reads as under (See [1989] 176 ITR (St.) 251) :
“10. Amendment of Section 44AC.–In Section 44AC of the Income-tax Act (as inserted by Section 15 of the Finance Act, 1988 (26 of 1988)), in Sub-section (1), in Clause (a), the following proviso shall be inserted, namely : —
‘Provided that nothing contained in this clause shall apply to a buyer where the goods are not obtained by him by way of auction and where the sale price of such goods to be sold by the buyer is fixed by or under any State Act’.”
7. This provision came into force from April 1, 1989, and the petitioners in many of the petitions which were filed before the commencement of this amendment submit that their cases be also determined along with other writ petitions filed subsequent to this amendment since all these writ petitions are covered by this amendment. We permitted them to make submissions accordingly. The petitioners left all other claims in their cases and confined their submissions to the question whether the Direct Tax (Laws) Amendment Act, 1989, reproduced above, comes to their rescue or not.
8. The precise submission of the petitioners in all these petitions is that they are L-13 country liquor licensees. They do not purchase liquor in auction, rather they obtain licence at a fixed fee. Rates for purchase and sale are prescribed by the State Government and the marginal difference between the purchase price and the sale price is also subject to various items of expenditure leaving only minimal amount to them by way of commission. Reference was made to certain calculations specifically mentioned in some of the petitions to substantiate this plea. They also submit that it was because of this nature of transaction that the Direct Tax Laws
(Amendment) Act, 1989, inserted a proviso to Section 44AC. Since they are also covered by this amendment, the demand of the respondents for payment of tax is illegal, being without authority of law.
9. Perusal of many of these petitions, for example, Civil Writ Petition No. 173 of 1989 (Som Dutt Dogra and Co. v. State of Himachal Pradesh) and Civil Writ Petition No. 356 of 1989 (Pardeep Kumar Sharma and Co. v. Union of India) shows that the petitioners have categorically asserted the application of this proviso, but the Union of India has not specifically assailed the claim of the petitioners in its reply to the writ petitions. So, the same could be held to have been admitted. However, Shri P.A. Sharma, learned standing counsel for the Union of India, made submissions in this behalf and contended that the addition of the proviso to Section 44AC does not make any difference since the “buyer” referred to in Section 206C from whom the “seller” referred to in Section 44AC has to collect the tax in terms of Section 206C is the same buyer even after the amendment. The buyer in Sub-section (1) of Section 44AC does not disappear. He remains there for all intents and purposes and all kinds of buyers have to pay the tax.
10. Further, it is also contended that reference to licence under the Punjab Excise Act, Rules framed thereunder and the Annual Excise Announcements (1989-90) should be considered to be a reference to goods purchased in auction. In other words, licence means purchase of liquor in auction.
11. We are not impressed by these submissions of learned counsel. In case
this was intended to be so, there was no necessity to bring any change and
the existing situation need not have been altered at all. It is true that a
“buyer” is there in all the provisions under examination ; however, the one
referred to in the proviso is a special kind of buyer. He has been excepted
from other kinds of buyers referred to in other parts of Section 44AC(1)
and Section 206 C of the Act. Two things are. necessary for the application
of this proviso :
(a) that the goods are not obtained by way of auction ; and
(b) that the sale price of such goods to be sold by the buyer is fixed by or under any State Act.
12. The territory of a proviso is to carve out an exception to the main enactment and exclude something which otherwise would have been within the section (See CIT v. Indo Mercantile Bank Ltd. [1959] 36 ITR 1 (SC)). In other words, it excepts and deals with cases which would otherwise fall within the general language of the main enactment and its effect is confined to the cases covered by it. A proviso for exemption or relief should be construed liberally and in favour of the assessee (See CIT v. K.E. Sundara Mudaliar [1950] 18 ITR 259, 271 (Mad)) and Sir Kameshwar
Singh v. CIT [1954] 26 ITR 121, 132 (Pat). No difficulty arises where the statutory provisions are clear, explicit and free from doubt but where one comes across such a situation, the endeavour has to be to get at the meaning of what was intended by considering the consequences of various kinds of constructions that are put to such a provision. According to Justice Holmes, “You construe a particular clause or expression by construing the whole instrument and any dominant purpose that it may express”. A right construction of the Act can only be attained if its whole scope and object together with an analysis of its wording and the circumstances in which it is enacted are taken into consideration (See Raja Bhagwan Raksh Singh v. Secretary of State, AIR 1940 PC 82 ).
13. To quote Craies, the most firmly established rules for construing an obscure enactment are those laid down by the Barons of the Exchequer in Heydon’s case [1584] 76 E. R. 637 which has been continually cited with approval and acted upon. This rule is popularly known as the “Mischief Rule”. The intention of this rule is always to make such construction as shall suppress the mischief and advance the remedy according to the true intention of the Legislature. The rules laid down by the Barons of the Exchequer are “that, for the sure and true interpretation of all statutes in general (be they penal or beneficial or restrictive or enlarging of the common law), four things are to be discerned and considered :
(i) What was the common law before the making of the Act;
(ii) What was the mischief and defect for which the common law did not provide.
(iii) What remedy Parliament hath resolved and appointed to cure the disease of the Commonwealth.
(iv) The true reason of the remedy. And then the office of all the judges is always to make such construction as shall suppress the mischief and advance the remedy, and to suppress the subtle inventions and evasions for the continuance of the mischief, and pro private commodo, and to add force and life to cure and remedy according to the true intent of the makers of the Act pro bono publico.”
14. This rule is still as good as when it was first reported in 1584. Almost 300 years later, Lindley M. R. reiterated the utility of the rule in the following words :
“In order properly to interpret any statute, it is as necessary now as it was when Lord Coke reported Heydon’s case [1584] 3 Co. Rep 7a, to consider how the law stood when the statute to be construed was passed, what the mischief was for which the old law did not provide, and the remedy provided by the statute to cure that mischief.”
15. The courts will, therefore, be bound to look to the state of the law at the time of the passing of the Act–not only the common law but the law
as it then stood under previous statutes, per Fletcher Moulton L. J. in Macmillan and Co. v. Dent [1907] 1 Ch, 107. The scope of the rule in Heydon’s case [ 1584] 3 Co. Rep. 7a has been explained by Das J. in S.C. Prashar v. Vasantsen Dwarkadas [1963] 49 ITR (SC) 1 in the following words (at p. 28) :
“In construing an enactment and determining its true scope it is permissible to have regard to all such factors as can legitimately be taken into account to ascertain the intention of the Legislature such as the history of the Act, the reason which led to its being passed, the mischief which had to be cured as well as the cure as also the other provisions of the statute. That is the rule in Hey don’s case [1584] 76 E. R. 637 ; 3 Co. Rep. 7a, which was accepted in R.M.D. Chamarbaugwalla v. Union of India [1957] SCR 930, 936 ; AIR 1957 SC 628 .”
16. In the famous Bengal Immunity’s case, AIR 1955 SC 661 ; 6 STC 446 (SC), the principle was applied to the construction of Article 286 of the Constitution. After referring to the state of the law prevailing in the provinces prior to the coming into force of the Constitution and also to the chaos and confusion created by indiscriminate exercise of the taxing power by different legislatures founded on the theory of territorial noxus, S.R. Das, Actg. C. J., observed that it was to cure the mischief of multiple taxation and to preserve the free flow of inter-State trade or commerce in the Union of India regarded as one economic unit without any provincial barrier that the Constitution-makers adopted Article 286 in the Constitution.
17. For the purpose of construction, this rule is conveniently applied to cases where it is obvious that the intention of the Legislature is to remedy the ascertained evils to which the former law had given rise. It is, therefore, quite legitimate to refer to the former Act as well as to the latter Act which provides the remedy. Similarly, the Supreme Court applied this principle in CIT v. Smt. Sodra Devi [1957] 32 ITR 615 and Dr. Baliram Waman Hiray v. Justice B. Lentin [1989] 176 ITR 1. In the latter case, the court approved a number of previous decisions including H.H. Maharajadhiraja Madhav Rao Jiwaji Rao Scindia Bahadur v. Union of India, AIR 1971 SC 530, 576, wherein the court had observed :
“The court will interpret a statute as far as possible, agreeably to justice and reason and that in case of two or more interpretations, one which is more reasonable and just will be adopted, for there is always a presumption against the law maker intending injustice and unreason”.
18. Shri Indar Singh, learned Advocate-General, also does not subscribe to the contention of Shri P.A. Sharma that purchase of licence should mean purchase of liquor in auction or that reference to licence means purchase of liquor by the petitioners. However, he contends that the petitioners are liable to pay the tax according to the provisions existing before the amendment but for what reason and on what basis both counsel could neither
convince us nor point out specific circumstances and instances where the newly added provision could be applied and made workable. Further, the learned Advocate-General lost his vehemence when confronted with the State reply where the following factors are prominently available :
(a) Reference to licence for liquor does not mean purchase of liquor in auction ;
(b) Licence can be obtained on fixed annual fee ;
(c) Absence of auction for obtaining L-13 licence ;
(d) Fixation of sale and purchase price by the State Government;
(e) Annual quota of the liquor is also fixed and the licensee cannot purchase more than the same ;
(f) In case L-13 licensees fail to supply the liquor to the retailers, the retailers can purchase the same from other sources ; and
(g) In case a licensee fails to sell the total quantity of the liquor covered by his licence, the same has to be surrendered to the Government on completion of the excise year.
19. Further, reproduction of Clause 48(1) of the Annual Excise Announcements (1989-90) says :–
“The wholesale country liquor vends (L-13) shall be granted at fixed annual licence fee for the year 1989-90. For the purpose of levy of annual licence fee, the following slab system is prescribed. The holders of L-13 licences shall have to pay the fee as per the following rates (except L-13 licences held by distilleries or warehouses) :
Sr.
No.
Category with annual minimum
quota
earmarked
Licence fee per annum
Rs.
(a)
Quota upto 30,000 pls.
15,000
(b)
Quota above 30,000 pls. to 50,000 pls.
22,500
(c)
Quota above 50,000 pls. to 70,000 pls.
30,000
(d)
Quota above 70,000 pls. to 90,000 pls.
37,500
(e)
Quota above 90,000 pls.
45,000
20. Thus, L-13 licensees take the liquor from the distillery for retail sale to L-14 vends and in case they fail to supply the same, L-14 licensees can make the purchase from other sources. As per Condition No. 51, supply of country liquor to the retail sale licensees has to be as per the rates given in annexure “I” throughout the excise year 1989-90. Perusal of this document demonstrates that the price of various sizes of bottles of country liquor has to be notified district-wise and their charges mentioned. According
to Clause 53, the price of country liquor mentioned in annexure “I” in respect of L-13 vends is inclusive of all charges, including cost of transportation, establishment, godown, packing material and the existing export fee imposed by the Uttar Pradesh, Punjab and Haryana Governments, etc. No other charges other than mentioned in Conditions Nos. 47 and 51 have been made admissible to the L-13 Licensees. These rates have been made subject to further revision with the prior permission of the Excise and Taxation Commissioner. The State admits that as per Condition No. 47 of the Annual Excise Announcements (1989-90), the ex-distillery-cum-bottling plant, Mehatpur, price including still head duty for double distilled country liquor in standard new and recycled (HP excise) bottles for the year 1989-90 have been fixed by the Excise and Taxation Commissioner as under :
50proof (per dozen)
Rs P
60 proof (per dozen)
Rs P
(i)
Quarts 750 mls
67.00
73.35
(ii)
Pints 375 mls
44.40
47.05
(iii)
Nips 180 mls
32.10
33.95
21. It is also admitted that rates of excise duty, ex-distillery price and other levies on country liquor are fixed by the Government within the provisions of the Punjab Excise Act, 1914, and the Rules framed thereunder as applicable to the State of Himachal Pradesh.
22. 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 the specific provisions. It was this mischief which was intended to be eliminated by the new amendment. Otherwise, as calculated by the petitioners, they were to pay much more tax than the expected returns which could not be considered to be the object of the legislation as it originally stood. L-13 licensees appear to be a class which, in view of the existing system of the transaction of sale
of country liquor, cannot be considered to be a class evading payment of tax and thus falling under the category of others for whom Sections 44AC and 206C were brought into the statute book, history and object and reasons of which we have specifically dealt with quite elaborately in the initial part of this judgment.
23. The net result of our examination of the matter is that the present petitioners (L-13 licensees) come within the purview of this proviso and the provisions of Section 206C and the other parts of Section 44AC(1) do not apply to buyers covered by the proviso.
24.
The demand of tax at the purchase point from the petitioners by the respondents has no authority of law and they are restrained from doing so.
25. Keeping in view the facts and circumstances of this case, we leave the
parties to bear their own costs.