TaxTMI 
TaxTMI 
TaxTMI 
2015 (9) TMI 1273
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....tate of Karnataka with manufacturing unit at (i) Munavalli with 2500 tonne crushing capacity per day: (ii) Aland taken on lease: (iii) Haveri taken on lease: (iv) Havalga owned by the petitioner: and (v) Burlatti owned by the petitioner. According to the petitioner, the State of Karnataka, in terms of its policy relating to incentive and concession to entrepreneurs starting new industries in the State, extended concession to new sugar factories permitting conversion of purchase tax into interest-free loan, pursuant to which a new unit certificate dated April 19, 2001 was issued in the name of M/s. Sree Renuka Sugars Limited, for its new manufacturing unit at Munavalli, Savadatti Taluk, Belgaum District, registered with the Government of India, vide No. IL/253/ILS/98 dated July 16, 1998 for the manufacture of sugar with installed capacity of 2500 TC, having commenced production on November 22, 1999, as evident from the first sale invoice, i.e., bill issued by the unit, which had the approval of the Commissioner for Industrial Development and Director of Industries and Commerce, annexure A. It is the assertion of the petitioner that the leased units at Aland and Haveri a....
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....parate appeals registered as STA Nos. 2196- 2197 of 2011 before the KAT, whence by the common order dated October 10, 2012, impugned, the appeals were dismissed. The learned counsel for the petitioner submits that the State Government, having issued a "new unit certificate" dated April 19, 2001 certifying that the petitioner had with effect from November 22, 1999 commenced commercial production of manufacture of sugar in its unit at Munavalli having installed crushing capacity of 2,500 tonnes was entitled to incentive and concession by conversion of purchase tax payable into interest-free loan on purchase of sugarcane for manufacture of sugar at the four other units operating at Aland, Haveri, Havalga and Burlatti in addition to the unit at Munavalli. Learned counsel's submission is that though the rectification order permitted the concession for the unit at Munavalli, nevertheless, the assessing authority having concluded that the petitioner committed a mistake in assuming the certificate extended concession to all the units, since "company specific" and not "unit centric" and the payment of tax on February 15, 2010, pursuant to the demand notice dated January 23, 2010 hence ....
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.... issued by the Joint Director of Industrial Development of the State of Karnataka, which reads thus: "Government of Karnataka Department of Industries and Commerce No. IDF.F2.71.BGM.SF.I& C.99-00 Office of the Director Khanija Bhavan, Race Course Road, Bangalore-1, Dated 19.04.01 NEW UNIT CERTIFICATE Sub: Incentives and concessions to entrepreneur starting of new industries in the State--Grant of concessions to sugar factories--conversion of purchase tax payable by new sugar factories into interest free loan to M/s. Sree Renuka Sugars Ltd., Munavalli, Savadatti Taluk, Belgaum District--Reg. Ref: 1. G. O. No. CI 140 FMI 71 dated June 6, 1973 2. G. O. No. FD. 373 CSL.73. dated January 17, 1975 3. G. O. No. CI. 200.SGF.84. dated March 30, 1988 4. Units representation dated December 15, 1999 5. Judgment and decree, DIC, Belgaum report No. BGM/ DIC/ DD(PTD)/Renuka/00-01/ dated February 22, 2001 and March 29, 2001. This is to certify that M/s. Sree Renuka Sugars Ltd., Munavalli, Savadatti Taluk, Belgaum District, is a new sugar industry registered with Government of India vide No. IL/253/FILS/98 dated July 16, 1998 for the manufacture of sugar with installed capacity of 2500 T....
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....ving regard to section 12B(4) of the KST Act, as extracted in the said order, held that default on the part of the petitioner in the matter of payment of tax cannot be unintentional or due to ignorance, since they are immaterial and are not grounds for levy of penalty, and as the law invested a jurisdiction in the authority to levy penalty on the failure of the petitioner to make payment of purchase tax, by order dated June 25, 2011, hence the imposition of penalty for the year 2007-08 of an amount equal to the amount of tax not paid, finally assessed and confirmed. Similar such order was passed in respect of levy of penalty for the year 2006-07 by the assessing authority. The appellate authority having regard to the very same plea of bona fide mistake, re-appreciated the said contention, framed points for consideration, more appropriately over whether the petitioner had any deliberate intention on its part in not paying the purchase tax in respect of four units, amongst other questions, answered the said points in the "negative" having regard to the new unit certificate, annexure A and its applicability to the unit at Munavalli alone. The first appellate authority observed that s....
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....bjective has its exercise to be. And yet it is difficult for any court to enumerate let alone place in a straitjacket formula, as to what would be an appropriate penalty in a given case or class of cases. All that can be said is that the assessing authorities, shall be bound to take into consideration all the circumstances relevant to the question of imposition and the quantum of penalty imposed. Of these circumstances two factors shall have to be particularly kept in view, these are - the bona fides of the dealer in making the excess collection and his conduct after having done so. An order imposing penalty which is passed for no better reason than the proof of a contravention or is demonstrably oblivious of the relevant consideration would be liable to be interfered with in appeal, revision or even writ jurisdiction under article 226 of the Constitution. Assessing authorities exercising the statutory powers of imposing penalties would therefore do well to act fairly and objectively and let not their exuberance in collection of taxes overtake their onerous obligation of discharging their statutory powers along judicial lines. Ample support for this view is available from a Divisio....
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....e whole year, in advance, in the aggregate when found to be less than the tax payable for the year or month, as finally assessed, being more than 15 per cent. of the difference in tax, the penalty should not be less than 50 per cent. of the tax so paid in short, but not to exceed one and half times the amount by which the tax so paid falls short of the tax payable for the month or quarter or for the whole year as the case may be. It is no doubt true that the assessing authority was not justified in recording a finding that in the matter of levy of penalty, it is immaterial to consider whether the non-payment of tax was unintentional or due to ignorance, while it is true that proof of "mens rea" in the levy of penalty in a taxing statute is unavailable is by and far well-settled. From the facts of these cases what is apparent is that the certificate dated April 19, 2001, annexure A, certifies its applicability to the petitioner's unit at Munavalli, since registered with the Government, having crushing capacity of 2500 tonne and having commenced commercial production on November 22, 1999. As on the said date four other units of the petitioner were not commissioned, nor were in t....