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Issues: Assessment of penalty under section 17A(3) of the Kerala Agricultural Income-tax Act for failure to pay tax, interpretation of sections 17 and 17A, jurisdiction of assessing authority in levying penalty.
In this judgment by Justice K. P. Radhakrishna Menon, the petitioner, an assessee, was directed to pay a penalty of Rs. 1,30,100 for failing to pay the tax in accordance with section 17A(1) of the Act. The key issue was whether the assessing authority was justified in levying the penalty for the period from June 1, 1981, to February 28, 1987. The court analyzed the provisions of section 17A(1) and (3) which relate to self-assessment and payment of tax before filing the return. It was highlighted that the levy of penalty under section 17A(3) is discretionary and can only be imposed if the person commits a default in paying the tax as per sub-section (1). The court emphasized that the penalty can be levied only for the period between filing the return and paying the tax. The assessing authority had erroneously levied the penalty for the period prior to December 4, 1986, which was beyond its jurisdiction. The revisional authority confirmed the assessing authority's order based on an incorrect interpretation of the law. The court set aside the revisional authority's order and clarified that the assessing authority could levy the penalty for the period from December 4, 1986, until the actual payment date. The court directed the assessing authority to refund the amount deposited by the petitioner and adjust the penalty amounts accordingly. The judgment allowed the original petition partially, with instructions for the assessing authority to act promptly in compliance with the court's directions within two months of receiving a copy of the judgment.
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