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2015 (9) TMI 1273 - HC - VAT and Sales TaxLevy of penalty - delay in payment of purchase tax - bonafide mistake - Scheme of concession to new sugar factories permitting conversion of purchase tax into interest-free loan - clubbing of turnover - Karnataka Sales Tax Act, 1957 - AO rectified its earlier order recording a finding that from out of the five units, only one unit at Munavalli was entitled to the benefit and accordingly, on the same day, issued a demand notice. Held that:- The petitioner, though did not establish bona fides over the mistaken belief that all its five manufacturing units producing sugarcane were entitled to the conversion of purchase tax into interest-free loan, nevertheless, did discharge its liability immediately after issue of the demand notice dated January 23, 2010. The contention that at the first instance the assessing authority accepted the petitioner's return for the years 2006-07 and 2007-08, claiming concession followed by the assessing authority rectifying the said order and issuing a demand notice pursuant to which the purchase tax was paid, is acceptable explanation, cannot be countenanced. The facts and circumstances are a pointer to the conscious disregard of the petitioner's obligation to pay the tax, hence disentitled to a concession in the levy of penalty under section 12B(4) of the KST Act, by exercise of discretion. The first appellate authority in exercise of its discretion modified the order of the assessing authority by reducing the penalty to 50 per cent. of the tax. The order admittedly is not challenged by the Revenue and is allowed to rest. In the facts and circumstances, the point raised for consideration is answered in the negative and against the petitioner, and these petitions devoid of merit, are accordingly dismissed. - Decided against the assessee.
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