2013 (10) TMI 1283 - HC - VAT and Sales Tax

Levy of entry tax - penalty under Section 6(2) of the Karnataka Tax on Entry of Goods Act 1979 - Held that - From bare perusal of this provision it appears that a discretion is conferred on the authority to impose/levy penalty not exceeding one and half times the tax. Having considered the submission of learned counsel for the appellant and peculiar facts and circumstances of the case and having considered the provisions contained in sub-section (2) of Section 6 of the Act we are inclined to reduce the penalty. Learned Government Advocate also has not seriously opposed the submission made by learned counsel for the appellant. - Penalty reduced - Decided partly in favour of assessee.

Summary

Issues:
1. Interpretation of Section 6(2) of the Karnataka Tax on Entry of Goods Act, 1979.
2. Discretion of authorities in imposing penalties under Section 6(2) of the Act.
3. Judicial review of revisional orders under Section 15(2) of the Act.

Analysis:
1. The judgment deals with a tax appeal arising from an order passed under Section 15(2) of the Karnataka Tax on Entry of Goods Act, 1979, where a revision was allowed restoring the order passed by the Assessing Authority under Section 6(1) of the Act. The appellant was initially held liable to pay entry tax and penalty under Section 6(2) of the Act. This decision was appealed, and the orders imposing tax and penalty were set aside. Subsequently, a suo motu revision was undertaken by the Additional Commissioner of Commercial Taxes, leading to the current appeal.

2. The Assessing Officer had imposed a penalty equal to the entry tax under Section 6(2) of the Act. However, the appellant argued for a lesser penalty based on the discretion provided under the statute. Section 6(2) allows the assessing authority to direct the dealer to pay a penalty not exceeding one and a half times the tax assessed if the escape from assessment is due to wilful non-disclosure. The High Court, considering the circumstances and the statutory provision, exercised its discretion to reduce the penalty from the original amount to Rs. 2,00,000, confirming the rest of the revisional order.

3. The judgment highlights the authority's discretion in imposing penalties under Section 6(2) of the Act and the scope of judicial review in revisional orders under Section 15(2). The Court, after considering the submissions and circumstances of the case, upheld the revisional order while reducing the penalty amount. The decision underscores the importance of statutory interpretation, discretion in penalty imposition, and the role of appellate courts in reviewing revisional orders under tax laws.