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TMI Blog1983 (7) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... ,346 should not be levied by way of penalty for default in payment of tax. The company wrote a letter dated 20th April, 1982, asking for time up to 10th May, 1982, for filing objections. The request was conceded but then there was no objection filed. So, the assessing officer confirmed the proposal by imposing the penalty of Rs. 22,346. Against the said order, the company appealed to the Deputy Commissioner, Commercial Taxes (Appeals), Bangalore City, contending that there was no judicial discretion exercised by the assessing officer in levying that penalty. That contention was not accepted and the appeal was dismissed. But, in the further appeal, the Karnataka Appellate Tribunal took a sympathetic view of the matter. After noticing that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her there was a proper discretion exercised by the assessing officer in levying the penalty in question. In Manilal Monaji Somayya v. Commercial Tax Officer, Gokak [1973] 32 STC 541; (1973) 2 Mys LJ 365, a Bench of this Court of which one of us was a member has observed: "The Act provides for imposition of penalty for failure to pay every month the advance tax on the deale's taxable turnover during the preceding month. But the liability to pay penalty does not arise merely upon proof of default in payment of tax in advance every month. As observed by the Supreme Court in Hindustan Steel Ltd. v. State of Orissa [1970] 25 STC 211 at 214 (SC), an order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cent of such amount for each month subsequent to the first three months. These rates cannot form the basis for imposing penalty under section 12-B(3). 5.. The power conferred under section 12-B(3) is penal in nature. The authority should exercise the power judicially and on a consideration of all the relevant circumstances. In each case, the authority must first examine after a reasonable opportunity to the party whether there was good or sufficient cause for the default committed and if not, whether the party has acted in conscious disregard of its obligation and acted deliberately in defiance of law. If the party is guilty of such conduct, then the authority must examine the question as to the amount to be levied as penalty. Section 12-B ..... X X X X Extracts X X X X X X X X Extracts X X X X
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