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2021 (9) TMI 1500 - HC - VAT and Sales TaxWaiver of interest under Section 7[2] of the KTEG Act - failure to pay tax along with its returns within the time prescribed under Section 7 of the Act on the value of cutting tools caused entry by it during the relevant years in question - HELD THAT:- The provisions of Sections 7[1], to 7[4] of the KTEG Act, make it clear that it was mandatory on the part of the registered dealer to get himself registered under the KTEG Act and send every month statement/returns along with tax payable by him i.e., in advance within 20 days after close of the preceding month to which such tax relates. There is default on the part of the registered dealer in not remitting the tax within 20 days after the close of the preceding month to which such tax relates. Sub-section [2] of Section 7 of the KTEG Act would attract for making the registered dealer liable to pay interest on the short payment of tax. These provisions are identical to Section 12-B[2] of the KST Act. The Division Bench of this Court in Shree Renuka Sugars Limited, Belagavi [2018 (2) TMI 450 - KARNATAKA HIGH COURT], has considered the scope and effect of these provisions in the light of the judgment of the Hon'ble Apex Court in the case of J.K. Synthetics Ltd. Vs. Commercial taxes Officer [1994 (5) TMI 233 - SUPREME COURT] and another Division Bench ruling of this Court in the case of State of Karnataka Vs. Mandovi Motors (Private) Limited, Mangalore, [2015 (11) TMI 1076 - KARNATAKA HIGH COURT] and has arrived at a conclusion that in the absence of provisional assessment made under Section 12-B[3] of the KST Act [therein] to determine the tax liability rejecting the monthly return incomplete or incorrect levying interest on the short payment of tax, such short payment of tax determined by the Assessing Authority while concluding the regular assessment would not attract the levy of interest. It is held that an harmonious reading of Sub-sections (1), (2), (3), (3A) and (4) of Section 12-B makes it clear that the phrase 'paid' and 'payable' employed in sub-Section (2) shall be the determination of advance tax made subsequent to final assessment by the Assessing Authority. It is obvious that the assessee pays the tax whichever is liable according to him on the information returns filed by him, it is highly unrealistic to expect him to pay the tax on the basis of final assessment to be done by the Assessing Authority at a future date or in other words, the assessee cannot predict the liability accruing on the basis of the final assessment proceedings or the assessee cannot affirm such eventualities which according to him was unexpected/uncalled unless provisional assessment is made. If any tax is made finally on final assessment made by the Assessing Authority, penal provisions under Section 7[3] and 8[2] of the KTEG Act ought to have been invoked, but no power under Section 7[2] of the KTEG Act would have been exercised by the Assessing Authority - reserving liberty to the Revenue to examine the levy of interest and penalty as per the provisions of Section 8[2] and 7[3] of the KTEG Act respectively, has set aside the levy of interest under Section 7[2] of the KTEG Act which cannot be faulted with. The question of law answered in favour of the assessee and against the Revenue - petition allowed.
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