-1- IN HIGH COURT OF JHARKHAND AT RANCHI W.P.(T) No. 7643 of 2017 ---- Electrosteel Steels Limited, Company registered under Companies Act, 1956, having its registered office at 801, Uma Shanti Apartments, Kanke Road, Ranchi, P.O. Kanke, P.S. Gonda, District Ranchi and its principal place of business at Vill-Siyaljori, P.O. Jogidih, Opp-Bangaria, P.S. Chandankiary, Bokaro, through its General Manager (F & A), Mr. Anuj Jaiswal, s/o Late Shri Rajeshwar Prasad Jaiswal, resident of Mahaveer Vatika, Flat no. 502, Dharamshala More, Main Road, Chas, Tara Nagar, Bokaro-827013, P.O. and P.S. Chas, District Bokaro Petitioner Versus 1. Principal Commissioner of Income Tax, Ranchi having its office at Central Revenue Building, Main Road, P.O. Ranchi 834001, P.S. Hindpiri, District Ranchi in state of Jharkhand 2. Central Coalfields Ltd., Darbhanga House, Office of GM Finance-A, Opp. Governor House, P.O. Ranchi University, P.S. Kotwali, District Ranchi, in state of Jharkhand Respondents ---- CORAM : HON BLE CHIEF JUSTICE HON BLE MR. JUSTICE SANJAY KUMAR DWIVEDI ---- For Petitioner : Mr. Biren Poddar, Sr. Advocate Mr. Deepak Sinha, Advocate For Respondent CCL : Mr. Anoop Kumar Mehta, Advocate For Respondent IT : Ms. Amrita Sinha & Haidar Zoya, Advocates ---- th Order No. 12 : Dated 20 February, 2019 Aniruddha Bose, C.J. writ petitioner is bulk purchaser of coal from Central Coalfields Limited. Contention of writ petitioner is that such coal is used for self consumption, to operate its own captive power plant in respect of their manufacturing activities of Pig Iron, Billets, TMT Bars etc. controversy involved in this writ petition is over Tax Collection at Source (TCS) in terms of provisions of Section 206C of Income Tax Act, 1961. Under aforesaid provision, bulk seller of certain specified items which include coal, is required to realize 1% additional sum over and above purchase price as income tax from buyer itself, which is subsequently credited to buyer s income tax payment. 2. Under Sub-section (1A) of Section 206C of Act however certain -2- exceptions have been provided to such blanket collection and conditions under which buyer can remain out of such TCS regime has been specified in aforesaid Sub-section read with Rule 37C of Income Tax Rules, 1962. 3. In this writ petition, complaint of writ petitioner is that in spite of fulfilling conditions specified in Sub-section (1A) of Section 206C of 1961 Act, Central Coalfields Limited is demanding 1% TCS. Though there are various prayers made in this writ petition, learned counsel for writ petitioner has primarily sought quashing of letter written by coal company to its General Manager dated 29th November, 2017 in which petitioner has been asked to deposit TCS. said letter reads :- Please refer your letter dated 15th Nov. 2017. Earlier CCL was issuing coal to consumer by not charging TCS @ 1% TCS but after collecting Form 27C where it was certified by consumer itself that it was actual consumer of Coal. CCL was charging TCS only from traders and it (TCS) was being deposited into Income Tax Department. During month of October 2017, CCL received series of letters from Income Tax Department on this issue and in reply, CCL justified reason of not charging TCS from consumers under section 206C of Income Tax Act 1961. But ultimately CCL received letter, no. F.No. PCIT/Ran/Tech/TCS-Misc/2017-18/1813 dated 31.10.2017, from Pr. C.I.T. Ranchi, Income Tax Department, mentioning following :- Quote You are therefore advised, as matter of abundant precaution, to either satisfy yourself that form 27C filed by assessee is correct in letter and in spirit. Or, if you are not so satisfied, it is incumbent upon you to collect TCS at rates prescribed u/s 206C of I.T. Act, 1961 Unquote -3- Since, Form 27C is declaration from customer and it is not possible for CCL to get satisfied from it, as required by Income Tax department, CCL has advised to all customers to deposit TCS @ 1% of coal value. 4. petitioner has also questioned legality of another circular letter issued by coal company on 2nd November, 2017 bearing No.CCL/M&S/CSC/2017-18/TCS/13227-34. 5. This Court had occasion to deal with this very question, which was raised by several other bulk purchasers of coal whose complaint was against such blanket collection of TCS. That issue was dealt with by this Court in W.P.(C) No. 46 of 2018, which was disposed of with following directions:- 19. We accordingly hold, while disposing of these writ petitions:- (a) two notices issued by C.C.L. bearing no.CCL/M&S/CSC/2017-18/TCS/13227-34 dated 2nd November, 2017 and CCL/M&S/CSC/2017-18/15377-80 dated 14th December, 2017 would not ipso facto be applicable to all writ petitioners in event they comply with provisions of Sub-section (1A) of Section 206 C of Income Tax Act, 1961 read with Rule 37C thereof by furnishing declaration in Form 27C. In such situation, buyers shall be entitled to benefits contemplated in provision of Section 206C (1A) of Act. (b) In event such forms are not furnished as per statutory requirement, it shall be open to C.C.L. to insist on TCS as per statutory provisions. (c) If C.C.L. has any doubt that coal is not being used for self-consumption by any of buyers claiming relaxation in terms of Section 206C (1A) of Act, it would be open to C.C.L. to take up matter with individual buyers and insist on TCS if circumstances justify such insistence. But to deny benefits contemplated in Section 206C(1A) of Act, so far as -4- individual writ petitioners are concerned, it would have to be examined first if as buyers or any of them have furnished declarations or verifications under Form 27C or not. If declarations are filed and there is no material to conclude that such declaration is false, then provisions of Section 206C (1A) would be applicable. On other hand, if C.C.L. finds that any misdeclaration is made by any individual buyer, then it shall be open to them to take such steps as may be permissible in law. (d) So far as sum collected in pursuance of two notices issued by Central Coalfields Limited as TCS is concerned, in event it is found that in individual cases buyers were not required to deposit such sum it shall be adjusted by Income Tax authorities against future payment of income tax by such buyers. If tax has been deposited under TCS scheme by coal buyer who otherwise does not fulfil requirement of waiver or relaxation from TCS scheme, then amount so deposited shall be dealt with as payment of income tax in accordance with law. In those cases, coal company shall issue TCS certificate in terms of provisions of Income Tax Act. Such certificates shall be issued on application made by individual buyers within period of eight weeks from date of making of application. (e) If there is finding to effect that there has been misdeclaration by any of writ petitioners, then it shall be open to Income Tax authorities as also C.C.L. to take steps against them as may be permissible under law. It shall be open to Income Tax authorities as also C.C.L. to make enquiries in respect of individual writ petitioners to ascertain if there has been any wrong or misdeclartion on their part. By same judgment, several other writ petitions were also disposed of on 3rd December, 2018. 6. As would be evident from directions issued by this Court in judgment delivered in W.P.(C) No. 46 of 2018, specific observations have been made in relation to circular letter of coal company dated 2 nd November, 2017. letter of coal company dated 29th November, 2017 -5- is in nature of follow up action and hence would stand covered by judgment of this Court delivered on 3rd December, 2018. No other argument has been raised on behalf of either Income Tax authorities or coal company which could persuade us to take contrary view. We accordingly dispose of this writ petition with same directions as contained in aforesaid judgment of 3rd December, 2018 and quoted earlier in this judgment. letter of 29th November, 2017 also shall stand quashed but course mandated in our judgment of 3rd December, 2018 in relation to collection of TCS from bulk purchasers of coal shall prevail in case of writ petitioner also. To this extent, Rule is made absolute. 7. There shall be no order as to costs. (Aniruddha Bose, C.J.) (Sanjay Kumar Dwivedi, J.) Birendra/ Electrosteel Steels Limited v. Principal Commissioner of Income-tax, Ranchi / Central Coalfields Ltd