Advance tax default under sales tax law attracts penalty even when payment is made later after the return is filed.

Penalty under section 12-B(2) of the Karnataka Sales Tax Act was attracted where a dealer filed monthly returns under section 12-B(1) but did not pay the advance tax within the prescribed time. Section 12-B(1) required monthly statements and timely advance payment on the basis of the preceding month's taxable turnover, while rule 17 fixed the payment time. Section 12-B(2) applied when advance tax for a month fell short of the tax payable by more than fifteen per cent, and the default arose on failure to pay in time. Later payment did not remove the default or prevent levy of penalty, and the argument that the case was one of non-payment rather than short payment was rejected.

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Issues: Whether penalty under section 12-B(2) of the Karnataka Sales Tax Act, 1957 is leviable where the assessee filed monthly returns under section 12-B(1) but did not pay the advance tax within the prescribed time.

Analysis: Section 12-B(1) required every dealer to file monthly statements and pay in advance the tax payable on the basis of the preceding month's taxable turnover, and rule 17 prescribed the time for payment. Section 12-B(2) empowered the authority to levy penalty where the tax paid in advance for any month fell short of the tax payable for that month by more than fifteen per cent. The liability under section 12-B(2) arose as soon as the default in timely payment occurred, and the fact that the penalty was quantified at the end of the year did not alter the existence of the default or exempt the assessee because payment was made later.

Conclusion: Penalty was leviable under section 12-B(2) even though the amount was not paid along with the return and was paid only later; the contention that the case was one of non-payment and not short payment was rejected.

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