During a TDS survey at the office of the assessee (District Mining Officer), the Assessing Officer treated the assessee as an ‘assessee-in-default’ for failing to collect TCS under section 206C(1C) on compounding fees and fines recovered from illegal miners and transporters of minerals. The High Court reversed the order, holding that section 206C(1C) strictly obliges tax collection only from leaseholders, license holders, or parties with whom a contract or right/interest transfer exists for a mine or quarry. There is no legislative mandate to collect TCS from illegal operators or on compounding fees/fines collected under the MMDR Act, 1957, as royalty does not encompass fines. The Hon’ble Supreme Court dismissed the Special Leave Petition, finding no case for interference. (AY. 2018-19)