Validating statute must expressly cover penalties before sales tax penalty recovery can be enforced

A validating statute must expressly cover penalties if recovery of a sales tax penalty is to be sustained. The Karnataka validating provision of 1972 referred broadly to assessment, levy, collection, notices, orders and recoveries connected with tax, but did not specifically validate penalties under section 13(2) of the Karnataka Sales Tax Act. On that reading, penalty recovery could not be enforced where the tax liability itself was not in dispute but the penalty was not expressly validated. The penalty under section 13(2) therefore remained unrecoverable.

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Issues: Whether the validating provision under Karnataka Act 5 of 1972 authorised recovery of penalty under section 13(2) of the Karnataka Sales Tax Act.

Analysis: The petitioner challenged only the recovery of penalty and did not dispute the tax liability. The validating provision referred to assessment, levy, collection, notices, orders, recoveries and similar actions in relation to tax, but did not specifically validate penalties payable under the Act. The decision applied the earlier binding view that, unless a validation provision expressly covers penalties, the sales tax authorities cannot recover a penalty that would otherwise not be recoverable.

Conclusion: The penalty under section 13(2) was not validated and could not be recovered from the petitioner.

Ratio Decidendi: A validating statute must expressly include penalties if recovery of such penalties is to be sustained; absent specific validation, penalty liability remains unenforceable.

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