These writ petitions involved the common question of facts as well as common question of law and therefore these petitions are taken up together for disposal. 2. The subject matter involved here is related to the levy and collection of tax at source under section 206C of the Income Tax Act in respect of profit and gain and trade in alcoholic liquor. The facts and the legal issues set forth in Civil Rule No. 1423 of 1995 (Hemanta Baruah & others vs. State of Assam & others) would only be taken up for consideration in adjudicating the issues involved in these cases. 3. The petitioner at all relevant time are/were the lessees of the country spirit shop under Assam Excise Act, 1910 and the Assam Excise Rules. 1945. The trade of country spirit is regulated by the Assam Excise Act, 1910 and Rules framed thereunder. 4. The country spirit (liquor) is first imported in the State as envisaged in Rule 77 to Rule 80 of the Assam Excise Rules and thereafter those are brought to the Excise Warehouse owned and controlled by the State Govt.. The import of spirit (liquor) is settled by the tender system. After the country spirit is brought to the warehouse owned and controlled by the State Govt., these are bottled in the specified manner in the warehouse under the supervision of the State Govt. for supply to the retailers i.e. the country spirit shops. The bottling contract is also settled by tender system. Under the Act and the Rules the settlement of the country liquor spirit shops are made by tender system in conformity with the statutory rules made under the Act for a period specified by the competent authority. The lessee of the concerned country spirit (liquor) shop can operate the trade on the strength of licence under the Act on payment of vent fee fixed by the Govt. for the specified period and subject to restriction and condition imposed in the licences. The lessee of the concerned country spirit (liquor) shop can operate the trade on the strength of licence under the Act on payment of vent fee fixed by the Govt. for the specified period and subject to restriction and condition imposed in the licences. Under the Rules the holder of licence, permit or pass shall be bound by the conditions specified therein and shall observe all directions, prohibitions and orders of the Excise authorities and the directions contained in the Excise laws for the time being in force whether such directions, prohibitions and orders be embodied in the conditions of his licence, permit or pass or not, and all directions, orders and prohibitions contained in Rules lawfully made under the Excise laws. The Rules as well as licence prescribed that the time and conditions for keeping open the shops in question and the holders of licence, permit or pass on the expiry of the licence is to return to the officer who granted it to the licencee. The Collector will fix the minimum with reference to the average daily consumption and the time required for replenishing the stock from the nearest warehouse. Each retail vendor of country spirit should report to the District Collector of the Excise Superintendent on the 1st of each month the stock he has in hand. Under Rule 305 the holder of licence for the retail sale of country spirit shall not sell such spirit at prices higher or lower than those specified in the Rules as well as in the licences. The lessee of the country shop buy liquor in bottles from the Govt. Warehouse and deposit cost price fixed by the State Govt. along with sales tax and excise duty fixed by the same by the treasury challan. The lessees of the country spirit shops then sell the same to the consumers at a price fixed by the Stale Govt. under the law for the time being in force. As motioned earlier country liquor shop are settled by the tender system and not auction sale. The duration of acquiring of licence for country liquor shops are three years commencing from the 1st April or any other date as may be specified by the State Govt. from time to time. The licence of country spirit shop in Assam can be obtained on fixed vend fees prescribed by the State Govt.. The duration of acquiring of licence for country liquor shops are three years commencing from the 1st April or any other date as may be specified by the State Govt. from time to time. The licence of country spirit shop in Assam can be obtained on fixed vend fees prescribed by the State Govt.. In case, the licencee of country spirit shops fails to sell the total quantity of liquor brought by him under the licence, the same has to be surrendered to the Govt. on expiry of his licence. 5. The Income Tax Act of 1961 was amended with effect from 1.4.89 by inserting section 44AC and 206C in the Income Tax Act. The methodology was introduced for collecting income tax at source under section 206C of the Income Tax Act in respect of profits and gains from the business of trading in alcoholic liquor, forest, produce etc. As per the said section every person, being a seller referred to in section 44AC shall at the time of deducting of the amount payable by the buyer or at the time of receipt of sum amount from the said buyer in cash or issue of cheque or draft or by any other mode, whichever is earlier, collect from the buyer of the goods of the nature specified, a sum equal to the percentage, as mentioned against each, of such amount as income tax on the income compared therein. By CBDT Circular No.620 dated 6.12.1997, the following clarifications are issued: "It may be clarified that 'seller' for the aforesaid purpose means the Central Govt. or a State Govt. or any local authority or corporation or authority established by or under a Central, State or Provincial Act, or any company or firm or co­operative society. It is also clarified that the provisions of section 44AC, and, consequently, those of section 206C will apply only to an assesstee being a person (as defined in the Act) other than a public sector company, referred to as 'Buyer' of any goods, in the preceding paragraph, at the profit of first sale, and not in the case of second or subsequent sale of such goods. It is further clarified that in the case of goods of the nature of alcoholic liquor for human consumption (other than Indian made foreign liquor), the aforesaid provisions shall not apply to a buyer who where such goods to be sold (further) by the buyer is fixed by or under any State Act..." The provision of law was further amended in 1992 by the Finance Act, 1995. By the said amendment section 44AC was deleted and section 206C is inserted which is as follows : "206C. Profits and gains from the business of trading in alcoholic liquor, forest produce, scrap, etc. (1) Every person, being a seller shall, at the time of debiting of the amount payable by the buyer to the account of the buyer or 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 : (1) (2) (3) (i) Alcoholic liquor for human consumption (other than Indian made foreign liquor) 15% (ii) Timber obtained under a forest lease 15% (iii) Timber obtained by any mode other under a forest lease 5% (iv) Any other forest produce not being timber 15% Provided that where the Assessing Officer, on an application made by the buyer, gives a certificate in the prescribed form that to the best of his belief any of goods referred to in the aforesaid table are to be utilised for the purpose of manufacturing, processing or producing articles or things and not for trading purposes, the provisions of this sub-section shall not apply so long as 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 Govt. or as the Board directs. (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 Govt. 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 furnished 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. (5 A) 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 Govt. 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 percent 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. Explanation for the purposes of this section - (a) 'buyer' means a person who obtains in any sale, by way of auction, tender or any other mode, goods of the nature specified in the table in sub-section (1) or the right to receive any such goods but does not include. - (i) a public sector company, (ii) a buyer in the further sale of such goods obtained in pursuance of such sale, or (iii) a buyer where the goods are not obtained by Mm 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; (b) 'seller' means the Central Govt., a State Govt. or any local authority or . corporation or authority established by or under a Central, State or Provincial Act, or any company or firm or co-operative society." 6. Sub-section (1) of section 206C enjoins that every person being a seller shall, at the time of debiting of the amount payable by the buyer to the account of the buyer or 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 a sum equal to the percentage specified in the corresponding entry in column (3) of the said table, of such amount as income tax. Lastly inserted an explanation which were mentioned earlier. Lastly inserted an explanation which were mentioned earlier. The Parliament by inserting an explanation explained the term as 'buyer' a person who obtains in any sale, by way of auction, or tender or any other mode, goods of the nature specified in the table in sub­section (1) or the right to receive any such goods but does not include (1) a public sector company (ii) a buyer in the further sale of such goods obtained in pursuance of such sale, or (iii) a buyer where 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 any State Act vide CBDT Circular No.634, dated 20.8.1992, amongst others delineated as follows : "3.1 Sub-section (1) of the amended section 206C enjoins that every person, being a seller shall at the time of debiting of the amount payable by the buyer, to the account of the buyer or 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 : SI No. Nature of goods Percentage 1 2 3 (i) Alcoholic liquor for human consumption (other than Indian made foreign liquor) 15% (ii) Timber obtained under a forest lease 15% (iii) Timber obtained by any mode other under a forest lease 5% (iv) Any other forest produce not being timber 15% 3.2 The term 'buyer' in section 206C is defined to mean "a person who obtains in any sale, by way of auction, tender or any other mode, goods of the nature specified in the table referred above or the right to receive any such goods but does not include : (i) a public sector company. (ii) a buyer where the goods are not obtained in pursuance of such sale, or (iii) 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; 3.3. (ii) a buyer where the goods are not obtained in pursuance of such sale, or (iii) 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; 3.3. The term 'seller' means the Central Govt., a State Govt. or any local authority or corporation or authority established by or under a Central, State or Provincial Act, or any company or firm or co-operative society. 5. It is clarified that the provisions of sub-section (1) of section 206C in relation to a buyer will not apply to a public sector company and to any other buyer who obtains the said goods at a second or subsequent sale of such goods. Thus, these provisions will apply only at the point of the first sale of such goods......" 7. The scope of the provision in explained in the Finance Bill, 1992. Sequel to the amendment as cited above the Assistant Commissioner, Income Tax TDS by his memo dated 18.8.94 (Annexure A) brought to the notice about the insertion of section 44 in the Income Tax Act, 1961 and also subsequently deletion of the same by the Finance Act, 1992 and similar provisions have been made in the new section 206C of the Income Tax Act, 1961 with effect from 1.4.92. By the said letter the Assistant Commissioner, Income Tax, TDS, Panbazar, Guwahati communicated the Govt. that the every person being a seller of the specified goods is required to collect income tax at source from the 'buyer' at the specified rates mentioned in the said communication. The Assistant Commissioner of the Income Tax by his letter dated 18.8.1994 videNo.C-l/Act/TDS/94-95 set the following communication to the Commissioner of Excise : “...It is reported by the Income lax Officer, Sibsagar, Assam that Income Tax has not been deducted as per provision of section 206C by the concerned authorities in Sibsagar District etc because of non-receipt of direction from your end. In fact, no such direction is required as the deduction is required to be made statutory under the provisions of the Income Tax Act, 1961. In fact, no such direction is required as the deduction is required to be made statutory under the provisions of the Income Tax Act, 1961. However, two letters were addressed by the Superintendent of Excise and Deputy Commissioner of Sibsagar as on 24.2.94 and 5.3.94 respectively (copies of these letters as forwarded by the ITO, Sibsagar are enclosed herewith for ready reference). The delay in deduction will lead to charging of statutory interest under section 201 (IA) of the IT Act, 1961 apart from other consequences. The persons responsible for tax at source will have to deductions bear these interest which is @15%. To avoid such unpleasant consequences any further, I would request you to kindly instruct all the officers working under you to deduct the Income Tax are required forthwith for the arrears as well as the current liabilities. I am also enclosing a separate circular letter highlighting the provisions of section 206 C of the IT Act, 1961, I would like to bare a few lined in reply by 20.8.94..." By a letter dated 6th December. 1994 addressed to the respective Deputy Commissioner/Sub Divisional Officers the under Secretary to the Govt.. Excise Department issued directions for collection of income tax at source provisions of Income Tax Act from the lessee of country spirit shops on the profit of alcoholic liquor other that Indian made foreign liquor under section 206C of the Income Tax Act within their respective jurisdiction from 1992-93. Hence these petitions. 8. Mr. C. Baruah. the learned counsel appearing on behalf of the petitioners submitted that the initiations of collection of taxes commenced at the instance of the revenue, through the State agency is unjustified and uncalled for. Mr. Baruah also brought my attention to the provision of the Act. more particularly to the Explanation mentioned in section 206C of the Act and submitted that the recover}' of tax at source can only be made from the person specified in the Act. In support of his contention Mr. Baruah cited a decision of the Himachal Pradesh High Court in Gian Chand Ashok Kumar & Co vs. Union of India reported in (1991) 187 ITR 188 (HP). Mr. Baruah. the learned counsel took me through the provisions of the Excise Acts and Rules to substantiate his point that the lessee of the country liquor shop does not come within the purview of section 206C of the Act. Mr. Baruah. the learned counsel took me through the provisions of the Excise Acts and Rules to substantiate his point that the lessee of the country liquor shop does not come within the purview of section 206C of the Act. Mr. Baruah in support of his contention has drawn my attention to the decision namely of two different High Court on the same matter. The High Court in Gian Chand Ashok Kumar (supra) observed as follows : "Thus, L-13 licensee 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 T 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 charge mentioned. According to clause 53, the price of country liquor mentioned in Annexure I in respect of L-13 vends is inclusive of all charge, including cost of transportation, establishment, godown, packing material and the existing export fee imposed by the Uttar Pradesh. Punjab and Haryana Govt.s, etc. No other charges other than mentioned in Condition 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 bottling plant, Mehatpur, price including still head duty for double distilled country liquor is standard, new and recycled (HP excise) bottles for the year 1989-90 have been fixed by the Excise and Taxation Commissioner as under : 50% proof (per dozen) 60% proof (Per dozen) Rs. P. Rs.p. (i) Quarts 750mls 67.00 73.35 (ii) Pintes 375 mis 44.40 47.05 (iii) Nips 180 mis 32.10 33.95 It is also admitted that rates of excise duty as distillery price and other levies on country liquor are fixed by the Govt. within the provisions of the Punjab Excise Act, 1914 and the Rules framed thereunder as applicable to the State of Himachal Pradesh. within the provisions of the Punjab Excise Act, 1914 and the Rules framed thereunder as applicable to the State of Himachal Pradesh. Examination of the fundamental provisions governing the grant of L-13 licensees clearly shows that the provisions of section 44 AC 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 hich 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 appears 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 glass 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. The net result of our examination of the matter is that the present petitioners (L-13 licence come within the purview of this proviso and the provisions of section 206C and other parts of section 44AC (1) do not apply to buyer covered by the proviso. 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..." 10. Mr. Joshi, the learned counsel submitted that the constitutional validity of the provisions 44AC and 206C were assailed before the Supreme Court in a batch of petitions in Union of India & another vs. A. Sanyasi Rao & others reported in (1996) 3 SCC 465 . 11. The vires of any of the provisions of the Act is not under challenge in this case. What is challenged is the legality and validity of the actions of the respondents in collecting tax at source under the provision of section 206C. Section 206C is meant for recovery of tax at source from the class of persons specified in section 206C itself. The Parliament explained and defined the term buyer and seller in clear and unequivocal term. All buyers of specified articles does not come within the purview of the provisions. Section 206C is meant for recovery of tax at source from the class of persons specified in section 206C itself. The Parliament explained and defined the term buyer and seller in clear and unequivocal term. All buyers of specified articles does not come within the purview of the provisions. The legislature in its wisdom explained the provision and exempted the public sector company from the term buyer and those engaged in further sale of such goods obtained in pursuance of such sale; or 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. The legislative provisions in this regard is clear. The fiscal measure in imposing liability of tax must W construed strictly and from a common sense point of view, it must be understood. It is required to be understood in conformity with the popular meaning and in commercial parlance. A citizen is not to be taxed without clear mandate of the legislature to that effect and Act of a Parliament is to be read according to its natural meaning. Words must be ascribed the natural, popular and ordinary meaning which they have in relation to the subject matter with reference to which and the context in which they have been used. Under the provisions of the Assam Excise Act and the Rules framed there under the lessee of country liquor shop is required to obtain a statutory licence to trade (section 25 of the Act). There is no right of renewal of the licence (section 32), country spirit shops are settled by 'tender' system normally (Rule 202, 203, 206 of the Assam Excise Rules, 1945). The licensee for the retail sale of country spirit cannot sell such spirit at prices higher or lower than those are specified by the authority' (Rule305). Rule 330 of Rules obligates the lessee to keep and maintain the daily accounts transaction in the prescribed forms of accounts books. la the State the country spirit (liquor) is not available, those are imported and transported into the State with the permission of the Excise Commissioner under a bond for payment of Excise duty in Assam and stocked in the Excise Warehouses owned and controlled by the State Govt. (Rule 77 to 80 of Rules). la the State the country spirit (liquor) is not available, those are imported and transported into the State with the permission of the Excise Commissioner under a bond for payment of Excise duty in Assam and stocked in the Excise Warehouses owned and controlled by the State Govt. (Rule 77 to 80 of Rules). The import of country spirit is caused through a set of contractors arranged through a tender system (Phase - 1) after the country spirit is imported and transported those are kept stored in the warehouse owned and controlled by the State Govt.. Thereafter these liquors are bottled under Govt. specifications under the control and supervision of the State Govt. to be supplied to the retailers, i.e. to the country spirit shops (Phase - 2). The bottling contract is also settled by the tender system. The lessee of country spirit shop then shall purchase the bottled spirit from the Excise Warehouses by depositing the cost price of liquor fixed by the State Govt. along with the sale tax and Excise duty fixed for the same by treasury challan. The lessee of the country spirit shops thereafter sell the same to the individual consumers at prices fixed by the Govt.. The purchase price as well as the sale price of the liquor ' is fixed by the Govt.. The licence of country spirit shop in Assam is issued on fixed vend fees which is prescribed by the Govt.. Further in case the licensee of the country spirit shop fails to sell the total quantity of liquor brought by him under the licence, the same has to be surrendered to the Govt. on expiry of licence. On over all consideration of the provisions of the Excise Act and Rules framed thereunder along with the provisions of the Income Tax Act more particularly section 206C of the Act, keeping in. mind the background of the introduction of the provision for collection at source from the business of trading in alcoholic liquor, it thus appears that rigours of the provision contained in section 206C is not applicable to the lessees of country liquor shops in Assam. In this view of the matter the lessee of the country liquor shop cannot therefore be. saddled with the liability imposed in section 206C of the Act and the said provision will not be applicable to the buyers covered by the explanation. In this view of the matter the lessee of the country liquor shop cannot therefore be. saddled with the liability imposed in section 206C of the Act and the said provision will not be applicable to the buyers covered by the explanation. The impugned direction contained in the communication No.C-1/CTS/ACIY/ GHY/94-95 dated 18.8.94 (Annexure A) therefore will not be applicable to the Jessees of country spirit shops and accordingly the impugned communication F.No.C-l/ACIT/TDS/94-95 issued by the Assistant Commissioner of Income Tax (Annexure B) as well as the communication bearing No.Ex.317/93/24 dated 6th December, 1994 (Annexure C) are quashed. The writ petitions are accordingly allowed. There shall however be no order as to costs.