Advance tax shortfall for penalty must be compared with final assessment, and revisional correction of erroneous appellate relief was upheld.

Section 12-B(4) of the Karnataka Sales Tax Act requires the 15% shortfall for penalty to be measured by comparing advance tax paid in aggregate for the whole year with the tax finally assessed for that year, not with the tax shown in the return. The appellate authority's contrary method of comparison was inconsistent with the statutory language, so its order was erroneous and prejudicial to Revenue. The revisional authority was therefore justified in exercising revisional jurisdiction under Section 22-A(1) to restore the penalty.

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Issues: Whether, under Section 12-B(4) of the Karnataka Sales Tax Act, 1987, the 15% shortfall for levy of penalty has to be computed with reference to the advance tax paid in aggregate vis-a -vis the tax finally assessed for the year, and whether the revisional authority was justified in interfering with the appellate order and restoring the penalty.

Analysis: The provision contemplates comparison between the tax paid in advance for the whole year in aggregate and the tax for the whole year as finally assessed. If the shortfall exceeds fifteen per cent, the assessing authority may impose penalty in addition to the tax. The appellate authority's approach of comparing advance tax paid with tax payable as per the return was contrary to the statutory language. Since the appellate order was erroneous and prejudicial to the interest of the Revenue, the revisional authority had jurisdiction to correct it under Section 22-A(1).

Conclusion: The shortfall has to be measured against the tax finally assessed, not against the tax shown in the return, and the revisional order restoring the penalty was upheld.

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