1 IN HIGH COURT OF JHARKHAND AT RANCHI W.P.(T) No. 7756 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.Deputy Commissioner of Income Tax, TDS Circle, Ranchi having its office at Central Revenue Building (Annexe), Main Road, P.O. Ranchi, P.S. Hindpiri, District Ranchi in State of Jharkhand. 2.Rungta Mines Ltd., Rungta House, P.O. Chaibasa, P.S.Mufassil, District Singhbhum (West) in State of Jharkhand. Respondents CORAM: HON BLE CHIEF JUSTICE HON BLE MR. JUSTICE SUJIT NARAYAN PRASAD For Petitioner : Mr. Biren Poddar, Sr. Advocate Mrs. Darshna Poddar Mishra, Advocate For Respondents : Ms. Amrita Sinha, Advocate Oral Judgment: Order No.7/Dated: 13th February, 2020 1. writ petition is under Article 226 of Constitution of India, wherein following prayers have been made: (i) For quashing general direction issued by Deputy Commissioner of Income Tax, TDS Circle, Ranchi (Respondent no.1) to Rungta Mines Limited (Respondent no.2) vide its letter dated 29.11.2017 (Annexure-3) directing it to collect tax (TCS) from parties under section 206C of Income Tax Act 1961 on sale of iron ore on basis of Form 27C and consequently on basis of said letter dated 29.11.2017 (Annexure-3), said Rungta Mines Ltd. vide its email dated 7.12.2017 (Annexure-2) sent to petitioner has refused to sell iron ore to petitioner without collection of tax (TCS) @ 1% of iron ore value, although 2 petitioner has been purchasing Iron ore from said Rungta Mines Ltd (Respondent no.2) on furnishing Form 27C without payment of TCS @ 1% in view of mandatory provisions of sub-section (1A) of section 206C of Income Tax Act, 1961 read with Rule 37C of Income Tax Rules, 1962, which iron ore is being utilized by petitioner for purposes of manufacturing, processing or producing Pig Iron, Billets, TMT Bars, Wire Rods and Ductile Iron Pipe etc. and has informed petitioner that from December, 2017 onwards, said Rungta Mines will raise debit note towards TCS at end of month for total bill amount issued throughout that month and requested petitioner not to send any Form 27C henceforth towards those bills. (ii) For declaration that aforesaid general direction issued by Deputy Commissioner of Income Tax, TDS Circle, Ranchi (Respondent no.1) to Rungta Mines Limited (Respondent no.2) directing it to collect tax at rates prescribed under section 206C of Income Tax Act, 1961 on sale of iron ore is wholly without jurisdiction and also contrary to mandatory provisions of sub-section (1A) of section 206C of Income Tax Act, 1961 read with Rule 37C of Income Tax Rules, 1962. 2. brief facts of case, as per pleading made in writ petition, which requires to be referred herein below stand enumerated hereunder: That petitioner is company, duly registered under provisions of Companies Act, 1956, carrying out business from place situated at village Siyaljori, P.O. Jogidih, P.S. Chandankiary, Bokaro. petitioner- company product range includes Pig Iron, Billets, TMT Bars, Wire Rods and Ductile Iron Pipes etc. 3 petitioner-company, for purpose of its manufacturing activities and production of Pig Iron, Billets, TMT Bars, Wire Rods and Ductile Iron Pipes etc., has been purchasing various raw materials including Iron Ore from Rungta Mines Ltd. (Respondent No.2) without payment (TCS) @ 1% on value of such iron ore after furnishing Form 27C in view of sub section (1A) of section 206C of Income Tax Act, 1961 read with Rule 37C of Income Tax Rules, 1962. authorities of Income Tax Department has issued communication on 29.11.2017 addressed to respondent no.2, in pursuance to Notification No.SO2793(E) dated 31.12.2014 as amended by Notification No.SO2829(E) dated 14.10.2015 of Central Board of Direct Taxes and further vide Notification No.1 of 2014 dated 15.11.2014 of Joint Commissioner of Income Tax, TDS Range-2, Ranchi communicating to collect TCS from parties in light of provision of section 206C of Income Tax Act, 1961. writ petitioner being aggrieved with same is before this Court by way of instant writ petition. 3. Ms. Amrita Sinha, learned counsel for respondent- Income Tax Department at outset, has submitted that similar issue has been dealt with by Division Bench of this Court in batch of writ petitions being W.P.(C) No.46 of 2018 and other analogous cases i.e. in case of M/s. Atibir Industries Co. Ltd. vs. Central Coalfields Limited, wherein Hon ble Court has been pleased to pass order, although with respect to coal, but similar direction may also be passed in this case by disposing of writ petition. 4. Mr. Biren Poddar, Senior Counsel appearing for petitioner has not disputed submission advanced on behalf of respondent-Income Tax Department, rather he has fairly submitted that relying upon judgment rendered by this Court in case of M/s. Atibir Industries Co. Ltd. vs. 4 Central Coalfields Limited (W.P.(C) No.46 of 2018 and analogous cases), another order has already been passed by Division Bench of this Court in W.P.(T) No.7643 of 2017 and, therefore, similar order may be passed in this case. 5. This Court having heard learned counsel for parties and after considering fact that similar issue has been dealt with by this Court as indicated above, is also disposing of instant writ petition in pursuance to direction and observation passed in W.P.(C) No.46 of 2018 and analogous cases, as indicated herein below: (a) notice issued by authority would not ipso facto be applicable to writ petitioner, in event writ petitioner will 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 respondent no.2 to insist on TCS as per statutory provisions. (c) If respondent no.2 has any doubt that iron ore is not being used for self-consumption by buyer claiming relaxation in terms of Section 206C (1A) of Act, it would be open to respondent no.2 to take up matter with individual buyer and insist on TCS if circumstances justify such insistence. But to deny benefits contemplated in Section 206C (1A) of Act, so far as writ petitioner is concerned, it would have to be examined first whether buyer as furnished declaration or verification 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 respondent no.2 finds that any misdeclaration 5 is made by writ petitioner, 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 notice as TCS is concerned, in event it is found that buyer was not required to deposit such sum, it shall be adjusted by Income Tax authorities against future payment of income tax by buyer. If tax has been deposited under TCS scheme by 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 such case, respondent no.2 shall issue TCS certificate in terms of provisions of Income Tax Act. Such certificate would be issued to writ petitioner within period of eight weeks from date of application. (e) If there is finding to effect that there has been misdeclaration by writ petitioner, then it shall be open to Income Tax authorities as also respondent no.2 to take steps against petitioner as permissible under law. It shall be open to Income Tax authorities as also respondent no.2 to make enquiry in respect of writ petitioner to ascertain if there has been any wrong or misdeclaration on its part. 6. writ petition stands disposed of in above terms. (Dr. Ravi Ranjan, C.J.) (Sujit Narayan Prasad, J.) Saket/- N.A.F.R. Electrosteel Steels Limited v. Deputy Commissioner of Income-tax, TDS Circle, Ranchi / Rungta Mines Ltd