Glimpses of Supreme Court Rulings

Excise Commissioner Karnataka and Another

vs. Mysore Sales International Ltd. and Ors.

(2024) 466 ITR 205 (SC)

8. Tax collection at source — The liquor vendors (contractors) who bought the vending rights on auction could not be termed as “buyer” under Section 206C of the Income-Tax Act because they were excluded from the definition of “buyer” as per Clause (iii) of Explanation (a) to Section 206C, in as much as the goods [arrack] were not obtained by him by way of auction (i.e., only licence to carry on the business was obtained) and that the sale price of such goods to be sold by the buyer was fixed under a state enactment. Merely because there is a price range providing for a minimum and a maximum under the State Act, it cannot be said that the sale price is not fixed.

Principles of natural justice — Even though the statute may be silent regarding notice and hearing, the court would read into such provision the inherent requirement of notice and hearing before a prejudicial order is passed — Before an order is passed under Section 206C of the Income-Tax Act, it is incumbent upon the assessing officer to put the person concerned to notice and afford him an adequate and a reasonable opportunity of hearing, incl