TCS on sale of Imported Timber

Section 206C, read with section 44AC, of the Income-tax Act, 1961 – Collection of tax at source (Timber) – Assessees were timber merchants – They were importing timber from other countries and selling them mostly to registered dealers in Kerala and outside State – Assessing Officer observed that assessees were not collecting any ‘tax at source’ in terms of section 206C(1) from purchasers/dealers to whom imported timber was sold – Assessing Officer treated assessees as assessees in-default under section 206C(6) and demanded tax and interest – Assessees contended that they were not covered under section 206C(1) – Whether section 206C does not draw any distinction between ‘timber grown in india’ and ‘timber imported’, from abroad – Held, yes – Whether, therefore, assessee was required to collect tax at source from purchasers/dealers in terms of section 206C at time of sale – Held, yes [Para 22] [In favour of revenue]