Special penalty provision governs delayed monthly tax payment; ambiguity in penal taxation must favour the assessee.

Monthly tax default under the Karnataka Sales Tax Act was governed by the special advance-payment provision, not the general penalty clause. The court read Section 12-B as controlling delay in payment of monthly tax, so penalty could be imposed only when default continued beyond the prescribed grace period and at the rate linked to Section 13(2)(ii). Section 13 was treated as a general recovery provision, while Section 12-B operated as the specific rule for monthly tax defaults. Any ambiguity in this penal taxing provision was resolved in favour of the assessee.

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Issues: Whether penalty for delayed payment of monthly tax was to be computed under Section 12-B(2) of the Karnataka Sales Tax Act, 1957 or under the general penalty provision in Section 13(2)(ii) of the same Act.

Analysis: Monthly tax was required to be paid within 20 days after the close of the preceding month. Section 12-B specifically governed advance payment of monthly tax and provided that, where default continued beyond ten days after expiry of the prescribed period, penalty would be levied at the rate specified in Section 13(2)(ii). Section 13 was treated as a general provision dealing with payment and recovery of tax and other amounts due, whereas Section 12-B was a special provision governing monthly tax defaults. The two provisions were read together, and the special provision was held to control the levy of penalty in cases of delayed monthly payment. In case of ambiguity in a penal taxing provision, the interpretation favourable to the assessee was applied.

Conclusion: Penalty could be levied only by applying Section 12-B(2), and only after default continued beyond ten days after the expiry of the 20-day period.

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