UNION OF INDIA AND ANR,versusM/S. OM PRAKASH S.S. AND COMPANY AND ANR.

                     UNION OF INDIA AND ANR,                                      A

       MIS. OM PRAKASH S.S. AND COMPANY AND ANR.

                           FEBRUARY 19, 2000

              [B.N. KIRPAL AND MRS. RUMA PAL, JJ.]                                B

     Income Tax Act, 1961

     Section 206-C-Explanation-Scope and litterpretation of

      Government-Issue of licence to carry on trade-Payment of licence fee
                                                                                  c
does not ipso facto entitle the /icencee to lift the good~-For obtaining goods
mentioned in the table licencee has to place an order on manufacturer or
supplier-It is at that point Section 206-C gets attracted

      Licence issued by government to cany on liquor ·trade-Section 206- D
C held not applicable-Licencee does not fall within the concept of buyer-
Buyer has to be buyer of goods and not merely a person who acquires a
licence to carry on business.

      Words & Phrases
                                                                                  E
      'Buyer '-Meaning of-In the context of Explanation to Section 206-C
of the Income Tax Act, 1961.

     CIVIL APPELLATE JURISDICTION : Special Leave Petition (C)
No. 3797 of 2001.
                                                                                  F
     From the Judgment and Order dated 22.2.2000 of the Punjab and Haryana
High Court in C.W.P. No. 1450 of2000.

      Mukul Rohtagi, Pritesh Kapoor and B.V. Balaram Das for the Appellants.

      The following Order of the Court was delivered :                            G

      It is quite evident that Section 206-C of the Income Tax Act, I96I refers
to a case where by reason of the payment to the seller the producer gets
specific goods mentioned in the Table to the said Section or gets a right to
collect or receive those goods by virtue of that payment. In the instant case,    H
                                     1113
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    1114                    SUPREME COURT REPORTS                   (2001] 1 S.C.R.

A when the Government issues a licence, it only enables the licensee to carry
    trade or business in that item. The payment made by the licensee by way of
    licence fee does not ipso facto entitle the licensee to left the goods. For
    obtaining the goods mentioned in the Table, the licensee has to place an order
    on the manufacturer or the supplier of the said goods and it is at that point
B   of time that Section 206-C would get attracted.

          The reliance placed on the explana\ion to sub-section ( 11) of Section
    206-C is misplaced as is evident from what is stated herein above. "Buyer"
    would mean where a person by virtue of the payment gets a right to receive
    specific goods and not where he is merely allowed/permitted to carry on
C   business in that trade. It is for this reason that we had earlier dismissed the
    special leave petitions and any observations of the High Court not in
    consonance with this may be not strictly correct but the fact remains that on
    licences issued by the Government permitting the licensee to carry. on liquor
    trade the provisions of Section 206-C are not attracted as the licensee does
    not fall within the concept of 'buyer' referred to in that Section. Buyer has
D   to be buyer of goods and not merely a person who acquires a licence to carry
    on the business.

           Hence the Special leave Petition is dismissed.

    T.N.A.                                                     Petition dismissed.