Mandatory minimum VAT penalty cannot be reduced by the Tribunal on equitable or technical grounds.

Section 53(12) of the Karnataka Value Added Tax Act was treated as prescribing a mandatory minimum penalty of not less than double the tax leviable. The Court relied on prior Division Bench authority to state that the Tribunal and appellate authorities have no jurisdiction to reduce that statutory minimum on equitable, technical, or absence-of-intent grounds once failure to produce the required documents at check was established. On that basis, the reduction of penalty to Rs. 10,000 was held unauthorised, the reduction was set aside, and the original statutory penalty was restored in favour of the Revenue.

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Issues: Whether the Tribunal had jurisdiction to reduce the minimum penalty imposed under Section 53(12) of the Karnataka Value Added Tax Act, and whether the statutory penalty provision is mandatory in nature.

Analysis: The revision turned on the construction of Section 53(12), which was treated as a mandatory provision prescribing a minimum penalty of not less than double the tax leviable. The Court relied on earlier Division Bench decisions holding that the authorities and the Tribunal have discretion to reduce the penalty below the statutory minimum. Once failure to produce the prescribed documents at the time of check was established, the levy could not be diluted on the ground that the lapse was only technical or that there was no clear intention to evade tax.

Conclusion: The Tribunal acted without jurisdiction in reducing the penalty to Rs. 10,000. The reduction was set aside and the original order imposing the statutory minimum penalty was restored, in favour of the Revenue.

Final Conclusion: The decision affirms that the penalty prescribed under the relevant VAT provision is mandatory and cannot be reduced below the statutory minimum by the appellate authority or the Tribunal.

Ratio Decidendi: Where a fiscal penalty provision prescribes a mandatory minimum penalty, the appellate authority has no power to reduce it below that minimum on equitable or technical grounds.

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