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M/s The Anaparai Estates Ltd. Versus The State of Karnataka

2016 (2) TMI 859 - KARNATAKA HIGH COURT

Levy of penalty under section 72(2) of the KVAT Act 2003 and interest under section 36 of the said Act for all the Tax periods under consideration i.e., 2006-07 to August 2012 - the grounds urged by the petitioner in the memorandum of petitions whereby it is contended that the returns filed by the assessee disclosed the deduction of input tax claimed, for all the tax periods under consideration. The returns filed by the assessee have been accepted by the department and in such circumstances, imp .....

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cer levying penalty as mandatory is not acceptable. The view of the Assessing Authority is confirmed by the appellate authority and Tribunal without appreciating the provisions of Section 72(2) of the Act. Hence, we are of the opinion that the Assessing Officer ought to have considered the objections filed by the assessee in a right perspective and would have passed a speaking order for levying penalty. - Levy of interest confirmed - levy penalty set aside - Decided partly in favor of assess .....

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lants, the petitioner had purchased chemicals, fertilizers and pesticides which are being used as manure to protect the plants from pest and disease. The petitioner/company had claimed input tax credit on the purchases of chemicals, fertilizers, pesticides and insecticides. For the assessment years 2006-07 to 2011-Aug 2012 (77 tax periods), the same had been disclosed in the returns filed for all these tax periods. The returns filed by the assessee had been accepted by the Assessing Authority al .....

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Assessing Officer/prescribed authority while concluding the reassessments also levied penalty under Section 72(2) of the Act and interest under Section 36(1) of the Act. On appeal filed by the assessee, these orders were confirmed by the First Appellate Authority. On further appeal to the Tribunal, the same are confirmed. 3. Being aggrieved by the said common judgment passed by the Tribunal, as regards the levy of penalty under Section 72(2) and interest under Section 36(1) of the Act, these pe .....

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d that the returns filed by the assessee disclosed the deduction of input tax claimed, for all the tax periods under consideration. The returns filed by the assessee have been accepted by the department and in such circumstances, imposing the penalty on the ground that the petitioner has understated the tax liability in the returns is uncalled for. The challenge is made on the levy of interest as it is not mandatory. It is urged that sub-section (1) of Section 36 provides for the liability to pa .....

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contends that the returns filed by the assessee claiming deduction of input tax wrongly, prima facie establishes that the assessee has understated his liability to tax. Such understatement of tax liability in the returns would definitely call for levy of penalty under Section 72(2) of the Act which is mandatory. Further, it is also contended that levying of interest under Section 36(1) of the Act is to compensate loss of revenue for the default committed by the assessee in not making the paymen .....

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and 36(1) of the Act to the assessee to initiate revision proceedings and to levy penalty and interest respectively for the relevant assessment years in question based on the Judgment of this Court in the case of M/s.Balanoor Plantations and Industries Ltd., (supra). The assessee has filed detailed objections for imposing the penalty and interest. After considering the objections raised by the assessee, the Assessing Officer concluded assessments disallowing the claim of input tax on the fertil .....

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ecedent for imposing penalty is, that the returns filed by the assessee should understate the tax liability. As we noticed, the assessee has claimed the input tax deduction on the purchase of manure like pesticides, chemicals etc, used in the course of business declaring the same in the returns filed. As such, there is no understatement of tax liability made by the assessee, the same are disclosed in the returns to claim input tax deductions. In such circumstances, the Assessing Officer levying .....

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