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2017 (10) TMI 1102 - HC - VAT and Sales TaxValidity of protective assessment - Section 38(5) of the Act - KVAT Act - case of petitioner is that u/s 38(5) of the Act, the protective assessment can be issued only if the prescribed authority has reasons to believe that such dealer would fail to pay any tax, penalty or interest so assessed or imposed or payable. There was no reason whatsoever for the lower authorities to believe that the petitioner would fail to pay the taxes, penalties or interests' so assessed or imposed - Whether the authority was justified in invoking the provision of section 38(5) when a notice under Section 82 of the Karnataka Value Added Tax Act has already been issued? Held that: - section 82 of KVAT Act does not give any inference that there is any prohibition for initiating action under section 38(5) of the Act, once a notice under section 82 of the Act is issued - Further, it is also not the case of the petitioner that the proceedings under section 82 of the Act has been concluded with respect to the relevant years 2005-06, 2006-07, 2007-08 and 2008-09. Thus, nothing has prevented the prescribed authority to initiate action under section 38 of the Act, provided the essential of the said section are met with. The opinion expressed by the Apex Court in Larsen & Toubro Ltd. (supra) cannot be considered as an excuse for the dealer under the Act for non payment of his tax periodically. In the absence of any specific direction or stay order allowing him to desist or delay from making payment of tax, merely because of an opinion to refer a matter to a larger Bench by the Hon'ble Apex Court cannot be taken as reasonable excuse for the dealer for non-payment of the tax which is a revenue to the State, at the appropriate time. As such, the petitioner since had no valid reasons for non-payment of tax. The prescribed authority had every reason to believe that the petitioner would fail to pay any tax, penalty or interest so assessed or payable by him. In this regard, the prescribed authority in its order under section 38(5) of the Act dated 11.11.2011 has given a detailed reasoning as to what made it to arrive at a belief that the petitioner would fail to pay the taxes, penalties and interests that are legally payable. We do not find any reason to disbelieve or reject those reasonings given by the prescribed authority. Petition dismissed - decided against petitioner.
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