1999 (7) TMI 652 - HC - VAT and Sales Tax

Summary

Issues:
Penalty under section 13(2) of the Karnataka Sales Tax Act for late payment of monthly tax.

Analysis:
The petitioner was penalized under section 13(2) of the Karnataka Sales Tax Act for late payment of monthly tax. The Act requires monthly tax to be paid in advance within 20 days after the close of the preceding month based on turnover particulars. Sub-section (2) of section 12-B states that if default occurs in tax payment beyond ten days after the specified period, a penalty equal to penalties specified under section 13 is applicable. Section 13 covers recovery of tax and penalty, stating that tax or any due amount must be paid as prescribed, with penalties for defaulters. The penalty is 2% of the unpaid amount for each month for the first three months after the prescribed time.

The argument presented was whether the penalty could be charged after a delay beyond 10 days from the expiry of the specified period in sub-section (1) of section 12-B or from the expiry of 20 days. The court analyzed the provisions of section 12-B and section 13, noting that section 12-B deals with specific provisions for penalties related to tax payment timeframes, while section 13 covers general provisions for penalties on amounts due. The court referenced a previous case to highlight the need for interpreting taxing provisions favoring the assessee, especially concerning penalties.

The court concluded that for monthly tax payments, penalties under section 12-B should be applied, specifically under sub-section (2) for delays beyond ten days after the 20-day period. As a result, the writ petition was allowed, directing the assessing authority to re-calculate the interest for delays beyond the specified timeframe as per section 12-B(2) of the Act.