TMI Blog2017 (10) TMI 1102X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded that under section 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. With this, it has prayed for setting aside the Common Judgment dated 18.12.2013 challenged under these revision petitions. 3. The respondent is being represented by Additional Government Advocate. The matter was admitted on 01.06.2015 and the following substantial question of law was framed for consideration; 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? 4. Heard arguments from both side. 5. The learned counsel for the petitioner in his arguments reiterated the contention taken up by the petitioner in his revision petition contending that there was no reason for the prescribed authority to believe that the petitioner would fail to pay any tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he prescribed authority may, on admission by such dealer in writing and upon his option to compound at any time prior to the commencement of the court proceedings relating thereto, compound such offence and order the dealer to pay such sum of money as specified by the prescribed authority, which shall not exceed the amount of the fine prescribed for the offence, in addition to any tax and interest due. (2) Furnishing of a cheque or any order instrument towards payment of a sum by any such dealer shall be deemed to be an application for compounding the offence. (3) Where the prescribed authority compounds an offence under this Section, the order referred to in sub-section (1) - (a) Shall be in writing and specify the offence committed, the sum of money to be paid and the due date for the payment; and (b) Shall be served on the dealer who committed the offence; and (c) Shall be final and not subject to any appeal, and (d) May be enforced in the same manner as a decree of a court for the payment of the amount stated in the order. (4) When the prescribed authority compounds an offence under this Section, the dealer concerned shall not be liable to pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o its notice, (ii) He may have to require previous permission of his Joint Commissioner or Addl. Commissioner to issue a protective assessment, (iii) The assessee with respect to whom the protective assessment is issued must be a dealer registered under the Act or he must be a dealer liable to be registered under this Act and lastly, (iv) The authority should have reason to believe that such dealer will fail to pay any tax, penalty or interest so assessed or imposed or payable. 12. In the case on hand, the petitioner does not dispute that before invoking the provision of Section 38(5) of the Act, the concerned authority had perused the records available with them and also as submitted by the assessee during the earlier proceedings consequent to inspection of business premises of the assessee by the predecessor in office of the authority. The petitioner also does not dispute that the issuance of the protective assessment under section 38(5)(a) of the Act was by the competent authority only. Furthermore, it is also not in dispute that the petitioner was liable to be registered under the Act, immediately after the Act came into force, however it got itself registered only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no basis for the prescribed authority to arrive at any belief that the petitioner would fail to pay any tax, penalty or interest. On the contrary, the learned Government Advocate in his arguments submitted that, admittedly the petitioner which was carrying on business in the construction of buildings and sale of apartments since a longtime, was expected to register under the Act immediately after the said Act coming into force from the date 01.04.2005. However, for no valid reasons, the petitioner did not register itself till 17.05.2007. Furthermore, it has not filed any returns for the relevant period till this date. As such, considering the total liability of the 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. 15. It is not in dispute that the petitioner was dealing in the business of construction of buildings and sale of apartments since prior to the Act coming into force. The reason given by the learned counsel for the petitioner in his argument for non-registering as a dealer under the Act and non-payment of the tax till the year 2007 was that the question whether the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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