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2015 (5) TMI 339 - KARNATAKA HIGH COURT

2015 (5) TMI 339 - KARNATAKA HIGH COURT - 2015 (321) E.L.T. 247 (Kar.) , [2015] 81 VST 505 (Kar) - Imposition of penalty under S.72(2) of the KVAT Act - Understatement of tax liability - Held that:- Imposition of penalty under S.72(2) of the KVAT Act was not warranted in the present case - Once a revised return has been filed and accepted by the Department, the original return gets obliterated and the only return which remains for consideration would be the revised return, as there cannot be two .....

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ribed tax period, the return to be considered was the revised return filed on 16.3.2009 and not the original return filed on 20.02.2009, which had been nullified or obliterated after the filing and acceptance of the revised return. Then, it cannot be said that there was any understatement of the tax liability by the petitioner to any extent in its revised return (which was the only return to be considered), as in terms of the said revised return, the entire tax along with interest, had been paid .....

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lty in the facts similar to the facts of the present case, could not be justified under S.72(2) - Decided in favour of assessee. - Sales Tax Revision petition 171/2014 - Dated:- 16-4-2015 - Vineet Saran And S. Sujatha,JJ. For the Appellant : Sri K S Naveen Kumar, Adv. For the Respondent : Sri K M Shivayogiswamy, AGA ORDER The revision petitioner is engaged in the business of providing passive infrastructure telecom services to its operators and is registered under the Karnataka Value Added Tax A .....

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the month in question on account of certain software issues at the Head Office and therefore, to comply with the filing of the return required by the due date, it had filed a 'nil' return. However, subsequently when the correct facts and figures were available with the petitioner, it voluntarily filed a revised return on 16.3.2009 which was without any receipt of intimation or notice from the respondent authorities. In the said revised return, petitioner disclosed a turn over of over &# .....

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uestioned by the Department at any stage. Then, after a gap of more than three years, on 18.6.2012, a notice was issued requiring the petitioner to submit a reply as to why penalty under S.72(2) of the KVAT Act be not imposed for under statement of tax liability, which was more than 5% of the tax paid during the period in question. In response to the same, petitioner submitted its reply on 2.7.2012. Thereafter, on 16.7.2012, the 2nd respondent / Assistant Commissioner passed an order imposing pe .....

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een filed under S.65(1) of the KVAT Act. We have heard Sri K S Naveen Kumar, learned counsel for the petitioner as well as Sri K M Shivayogiswamy, learned counsel for the respondents at length and perused the records. The facts as stated above are not disputed by the learned counsel for the parties. The question to be now decided by this Court is as to whether in the facts and circumstances of the case, when the petitioner had itself voluntarily filed the revised return under S.35(4) of the Act .....

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led the revised return and paid the admitted tax along with interest for the delayed period, and its return having been accepted by the authorities, the question of imposition of penalty under S.72(2) of the Act would not arise. Learned counsel for the petitioner has also submitted that the provisions of S.72(2) of the Act would not be attracted and, in the facts of the present case, the only return which was there for consideration before the authorities was the revised return filed under S.35( .....

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return filed on 16.3.2009, would clearly show that there was understatement in the original return to an extent of over 5%, and the same would attract imposition of penalty under S.72(2) of the KVAT Act. It is further been submitted by the counsel for the respondents that the penalty imposed is civil liability and as such, there is no question of mens rea and once the liability of payment of tax has been accepted by filing a revised return, the imposition of penalty is mandatory. Having heard t .....

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assessment. For ready reference, the relevant sections are reproduced below: S.2(28) : 'Return' means any return including a revised return prescribed or otherwise required to be furnished by or under this Act. S.35: Returns: (1) Subject to sub-sections (2) to (4), every registered dealer, and the Central Government, a State Government, a statutory body and a local authority liable to pay tax collected under sub-sec.(2) of S.9, shall furnish a return in such form and manner, including e .....

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er information or evidence by the prescribed authority, he shall furnish a revised return within six months from the end of the relevant tax period except when such revised return is on issue of a debit note under S.30, subject to sub-sec.(2) of S.72. S.42 - Payments and recovery of tax, penalties, interest and other amounts and issuance of clearance certificates: (1) ……. (2)…….. (3)……… (4)……… (5)…….. (6)… .....

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it by more than five per cent of his actual liability to tax, or his actual tax credit, as the case may be shall after being given the opportunity of showing cause in writing against the imposition of a penalty, be liable to a penalty equal to ten per cent of the amount of such tax under or overstated. S.35(1) of the KVAT Act provides for filing of return within twenty days after the end of the preceding month. In the present case, the said period of twenty days was to expire on 20.2.2009, on wh .....

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h the petitioner has undisputedly deposited. Now the question for consideration before us would be, whether it would be the 'revised return' furnished by the petitioner to be considered as the 'return' under sub-section (2) of S.72 or would it be the 'original return' filed on 20.2.2009 to be considered as the 'return' for the purpose of the said sub-section. The definition of 'return' under sub-section (28) of S.2 clearly means to be a 'return' in .....

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for the purpose of making assessment (viz., CIT Vs Mangalore Chemicals & Fertilizers - 1991(59) Taxman 508 (Kar); CCIT Vs Machine Tool Corporation of India Ltd - 1993 (67) Taxman 363 (Kar); Beco Engineering Co. Ltd Vs CIT - 1984 (18) Taxman 44 (P &H); Dhampur Sugar Mills Ltd Vs CIT - 1973 (90) ITR 236 (All). Though the said judgments relate to the Income Tax Act but we are of the opinion that for the purpose of the KVAT Act also, on the same principle, the original return would be oblite .....

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f fact, not only the revised return had been filed by the petitioner, but the same was also accepted by the respondents, and the validity of the revised return is not in question or in dispute. Once the revised return has been accepted and acted upon by the parties, then it is only the revised return which has to be taken as the sole return for the purpose of sub-section (2) of S.72. In the light of the aforesaid, we may now proceed to consider the provisions of S.72(2) of the KVAT Act which pro .....

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