https://www.taxtmi.com/caselaws?id=164039 A composition scheme exclusion under the Karnataka Value Added Tax Act was upheld because the Legislature could validly classify dealers on the basis of out-of-State or out-of-country purchases, and that restriction had a rational nexus with compliance and revenue protection; it was neither arbitrary under Article 14 nor a barrier to free trade under Article 301. Penalty for understating tax liability by more than the statutory margin was also not struck down, as fiscal penalties may operate without proof of mens rea, but the individual penalty orders failed because the mandatory pre-penalty opportunity to show cause in writing was not properly given. The penalty demands were therefore quashed for fresh consideration after notice. en-us Thu, 26 Mar 2009 00:00:00 +0530 Wed, 12 Nov 2014 13:38:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=164039 A composition scheme exclusion under the Karnataka Value Added Tax Act was upheld because the Legislature could validly classify dealers on the basis of out-of-State or out-of-country purchases, and that restriction had a rational nexus with compliance and revenue protection; it was neither arbitrary under Article 14 nor a barrier to free trade under Article 301. Penalty for understating tax liability by more than the statutory margin was also not struck down, as fiscal penalties may operate without proof of mens rea, but the individual penalty orders failed because the mandatory pre-penalty opportunity to show cause in writing was not properly given. The penalty demands were therefore quashed for fresh consideration after notice. Case-Laws VAT and Sales Tax Thu, 26 Mar 2009 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=164039