1987 (11) TMI 347 - HC - VAT and Sales Tax

Summary

Issues:
Legality of penalty under section 13(2) of the Karnataka Sales Tax Act for default of payment of advance tax under section 12-B(1).

Analysis:
The judgment addresses the legality of the penalty imposed under section 13(2) of the Karnataka Sales Tax Act on the petitioners for defaulting on the payment of advance tax under section 12-B(1). The petitioners argue that section 13(2) is not applicable to cases of default in advance tax payment. The court examines the scheme of the Act, specifically focusing on advance tax payment in Chapter V, including sections 12-13(3) and 13 related to penalty imposition. The petitioners rely on various court decisions to support their contention, but the court distinguishes these cases as not directly relevant to the provisions of the Karnataka Act in question.

The court discusses the provisions of section 12-B, which mandates dealers to pay the full tax amount in advance along with monthly returns. Subsequently, if the tax paid falls short of the actual amount due at year-end, a penalty not exceeding 1½ times the shortfall is leviable. The petitioners challenge the penalty imposed under section 13(2) for failing to pay advance tax based on their returns. The court analyzes the language of the Act and the amendments made, emphasizing that the penalty under section 13(2) is applicable to amounts due under section 12-B(1).

The judgment also refers to the issuance of a notice of demand in cases of tax payment default by dealers, highlighting the recoverable amounts and penalties specified under the Act. The court upholds that penalties under both section 12-B(3) and 13(2) are applicable in cases of default in tax payment, as clarified by the insertion of "any other amount due" in section 13(1) by an amendment. Consequently, the court rejects the petitioners' argument that no penalty should be imposed under section 13(2) for failing to deposit admitted tax under section 12-B(1).

In conclusion, the court dismisses the writ petitions, affirming the legality of the penalty under section 13(2) of the Karnataka Sales Tax Act for defaulting on advance tax payment.