Held that the objection raised on the maintainability of writ petitions, which had not been raised at the first instance, on the ground that the orders passed under section 201 were appealable under the provisions of the Act was unsustainable since most of these writ petitions were entertained as far back as in 2019 and 2021 and after hearing the respective parties, the court had passed interim orders. Therefore, it would be wholly inequitable to relegate the assessees to pursue an alternative remedy. Since the parties had addressed submissions on the merits of the questions which arose and the jurisdictional challenge that stood raised, there was no justification to accept the objections raised.. That merely because the external development charges were determined and directed to be paid by the Directorate of Town and Country Planning, it did not deprive the payment of its intrinsic characteristic, namely, of being a payment made to the Authority. The submission of a lack of privity between the assessees and the Authority was to be rejected since section 194C did not contemplate the existence of a contractual relationship between a person who was responsible for paying a sum and the contractor as defined in that provision. The existence of a contract was only envisaged to be a factor pertinent to an arrangement which the contractor had with a specified person. That a statutory obligation to carry out external development could not be doubted since the 1977 Act envisaged the Authority as being an authority charged with undertaking external development works in all areas falling within an urban area and had been constituted as a specialised agency to carry out external development works in colonies and areas. The communication, dated June 19, 2018, of the Directorate of Town and Country Planning evidenced an acknowledgment of the Authority undertaking external development work in and around a colony or area. It had admitted to an arrangement which was in existence up to March 31, 2017 in terms of which the Directorate of Town and Country Planning collected external development charges from colonisers in the form of a bank draft drawn in favour of and sent to the Authority which was an executing agency working for and on behalf of the State Government for which funds were provided to the Authority through the Directorate of Town and Country Planning, and that since receipts on account of external development charges were found to be insufficient, it had formulated a new scheme and for which appropriate budgetary provisions were made for execution of all external development works by it. It was on the promulgation of such scheme that the external development charges with effect from the financial year 2017-18 were deposited directly with the State Government and constituted a part of the consolidated fund of the State. Post the promulgation of that scheme all payments towards external development charges were made through the Directorate of Town and Country Planning and the required funds for execution of development works were thereafter released to the Authority upon sanction being granted by the Finance Department of the State Government. This communication therefore, evidenced that all external development charges were made to the Authority, at least prior to March 31, 2017 pursuant to an understanding that those funds would be utilised towards external development. All the payments having been made to the Authority under the directives of the Directorate of Town and Country Planning, they were directed towards subserving an arrangement existing between the Authority and the State Government for external development works being carried out by the former. Though this arrangement did not stand encapsulated in a formally executed contract or instrument, there was in existence an understanding between the State Government and the Authority for external development work being executed by it and for the funds remitted to it being utilized for such purposes. Therefore, the external development charges were payments made directly to the Authority and prior to the financial year 2017-18. In terms of the provisions of the 1977 Act read with the Rules and the statutory obligations placed upon the Authority, there was in existence an understanding or an arrangement between the Authority and the State Government for the execution of external development works. The existence of a contract was to be construed from the arrangement which existed between the Authority and the State Government and having been duly acknowledged by the Directorate of Town and Country Planning itself, the absence of a written or codified agreement would not be relevant for the applicability of section 194C. That merely because an exercise of quantification was undertaken by the specified person, it would have no bearing on the applicability of section 194C. Not only the provisions of the 1977 Act, but also the forms and bilateral agreements executed by applicants, mandated that all payments of external development charges were to be drawn in favour of the Authority. Although they were routed through the Directorate of Town and Country Planning, those payments undoubtedly were to the account of the Authority. The statute as well as the licence conditions thus placed the assessees under a binding obligation to advance all external development charges payments in favour of the Authority. These qualified the responsibility which section 194C placed upon a payer who made payments to a contractor. The fact that external development charges were determined, computed or were recoverable by the Directorate of Town and Country Planning was wholly inconsequential since section 194C was solely concerned with a payment being made to a contractor who had an arrangement with a specified person. The moment the assessees effected a payment in favour of the Authority in connection with the external development work which was to be executed by it pursuant to the arrangement that existed between the entity and the State Government, the provisions of section 194C stood attracted. That the liability to deduct tax according to the provisions of sections 197 and 197A, stood effaced only if a recipient obtained a certificate of exemption or where a beneficiary produced a certificate which obliged the payer to deduct tax at a rate lower than that prescribed. The Authority had neither obtained certification as contemplated under these provisions nor had obtained a declaration that moneys received by it were exempt from tax. Therefore, the assessees did not stand absolved of the obligation to deduct tax on payments that were being made to the Authority.  That the mere constitution of the Authority by a statutory enactment did not make it “Government”. The Authority did not fall within the ambit of clause (1) or clause (3) of section 196. The external development charges payment made to the Authority was a not a payment made to the State, the income having been placed in the hands of the Authority at its disposal. Even according to the Directorate of Town and Country Planning external development charges were made in favour of the Authority till March 31, 2017 and only thereafter the payments were deposited with the Directorate of Town and Country Planning. Even if the Authority discharged functions akin to or similar to governmental obligations or performed activities closely connected with State functions, it would not result in recognising it as “Government” immune from taxation under article 289 of the Constitution of India. That section 196 is not dependent upon a directive to pay. It is only concerned with whether the payment is made to a Government or an authority specified therein. The fact that arrears of external development charges could be recovered as arrears of land revenue was immaterial. Section 10A was merely a mode of recovery of external development charges. Even if that provision were to elevate external development charges to a statutory levy, it would not be determinative of whether the payment fell within the scope of section 196. The amount paid would be exempt from the rigours of tax deduction at source only if it was made to a category of entities specified. That there was no justification to invoke the prerogative writ powers on the issue of show-cause notices since the assessees in the course of proceedings had been afforded adequate opportunities to establish that section 194C would not be attracted and the issue of its applicability also had been raised in the counter affidavits which were filed and the assessees had adequate notice. Therefore, the principles of prejudice were not attracted and it would be inappropriate to interfere with the notices on this ground That the final orders passed under section 201 were to be quashed and set aside. The legal position of penalty be it either under section 221 or 271C was not an inevitable corollary in case of default and the position was made explicit by the second proviso to section 221 and section 273B. The imposition of penalty where a question with respect to taxability had remained unclear or where an assessee had good and sufficient cause not to deposit the tax, was subject to due verification of whether any final orders had been passed against any of the assessees and the scope of a person in default and penalty provisions. The Department could revive the proceedings pending on the pending notices and decide afresh in accordance with law and this judgment after affording an opportunity of hearing to the assessees. The  liberty was given to the Department to finalise the notice under section 148 and the reassessment proceedings under section 147 in accordance with law. In W.P. (C) Nos. 6552 and 6558 of 2022 the notices issued under section 148 and orders of reassessment under section 147 were quashed since the Department had based them on the issue on section 194. However, the Department was at liberty to proceed afresh under section 201, if permissible in law.