2021 (3) TMI 956

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....Karnataka Appellate Tribunal. The following questions of law arise for consideration in this petition. "1. In the facts and circumstances of the case, whether the Order passed by the Tribunal is in accordance with the existing Circulars, Acts and the Rules? 2. In the facts and circumstances of the case, whether the Karnataka Appellate Tribunal is not holding that levy of interest under sub Section 2 of Section 7 of the KTEG Act is not available to the Assessing Authority in view of insertion of sub-section 3 of Section 7 of the KTEG Act." 2. Facts leading to filing of this petition briefly stated are that the respondent is a dealer registered under the provisions of the Act and is engaged in the sale of machinery parts ....

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....levy of interest is automatic under the provisions of the Act once a default is committed in payment of tax. It is further submitted that the Tribunal grossly erred in accepting the explanation filed on behalf of the respondent / dealer and in holding that after clarification was issued by the Commissioner, who, with regard to tax liability of cutting tools, on 07.07.2014, held that the provisions of Section 7(2) of the Act cannot be applied for the period under the appeal and therefore, neither any interest nor any penalty can be levied on the respondent / dealer. 4. On the other hand, learned counsel for the respondent / dealer submitted that the dealer had not admitted the tax liability and therefore, did not prepare any tax liability....

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....ax payable by him on the basis of the goods brought by him during the preceding month into the local area within twenty days after the close of the preceding month to which such tax relates and the amount so payable shall for the purpose of sub-section (4) of section 8 be deemed to be an amount due under this Act from such dealer. xxxx" "7(2) If default is committed in the payment of tax for any month or quarter as the case may be, beyond ten days, whether or not a statement as required under sub-section (1) is filed; or if the amount of tax paid is less than the amount of tax payable for any month or quarter as the case may be, the dealer defaulting payment of tax or making short payment of tax shall, in addition to the t....

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....nd the default is made in payment of tax so assessed. 6. In the instant case, the issue with regard to liability of entry tax on cutting tools was pending litigation before this Court which was ultimately concluded by a decision of the Supreme Court in 'ADDISON AND CO. LTD. Vs. STATE OF KARNATAKA' (2009) 23 VST 5 (SC). Thereafter, subsequently the Supreme Court on special leave application filed against the order of this Court, while disposing of the special leave petition in the case of 'M/s. R.K.POWERGEN PVT. LTD. AND OTHERS Vs. STATE OF KARNATAKA' vide order dated 12.09.2013 disposed of the appeal with the following directions:   "We say so, for the reason that under the Act, a dealer is given an opportun....