2021 (9) TMI 1500

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....nt years 2005-06 and 2006-07. 2. The Revision Petition was admitted to consider the following questions of law: "i. Whether on the facts and in the circumstances of the case, the impugned order passed by the Tribunal is sustainable in law? ii. Whether the Tribunal was right in passing the impugned order dated 29.05.2015 and setting aside the levy of interest under Section 7[2] of the KTEG Act, despite the fact that the respondent admittedly failed to pay tax along with its returns within the time prescribed under Section 7 of the Act on the value of cutting tools caused entry by it during the relevant years in question?" 3. Learned Additional Government Advocate appearing for the Revenue has restricted the challenge ....

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....emption on the purchase of lubricants on which the appellant has paid entry tax but claims exemption on the basis of other evidences? 4. What order?" 7. On appreciation of material evidence, point Nos. 1 and 3 were answered in the Affirmative and point No. 2 in the Negative. Accordingly, appeals were disposed of insofar as the imposition of interest under Section 7[2] of the KTEG Act, allowing the appeals of the assessee setting aside the interest levied under Section 7[2] of the Act, liberty was reserved to the Assessing Authority to examine the levy of interest and penalty as per the provisions of Section 8[2] and 7[3] of the KTEG Act respectively, in accordance with law. 8. Being aggrieved by this portion of the order of t....

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....he Assessing Authority was justified in imposing interest under the Statutory Scheme of Section 7[2] of the KTEG Act and the same was rightly affirmed by the Commissioner of Income Tax [Appeals]. However, the Tribunal failed to appreciate the provisions of Sections 7[1] and 7[2] of the Act in a right perspective and concluded that the assessee is not liable to pay interest under Section 7 of the Act. Thus, the learned counsel submits that levy of interest is to compensate the delay in payment of tax and the same being automatic, the Tribunal ought to have been directed the assessee to pay interest affirming the orders of the authorities. 10. Learned counsel for the assessee placing reliance on the judgment of the Dharwad Bench of this Co....

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....be prescribed every registered dealer [and every dealer liable to get himself registered under this Act] shall send every month to the assessing authority a statement containing such particulars as may be prescribed and shall pay in advance the full amount or tax 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: [Provided that in the case of a dealer whose total turnover in any year under the Karnataka Sales Tax Act, 1957 (Karnataka Act 25 of 1957) [or ....

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.... be, to which such tax relates.] Provided that no penalty under this sub-section shall be imposed unless the dealer affected has had a reasonable opportunity or showing cause against such imposition. [(4)] If no such statement is submitted by a dealer under sub-section (1) before the date prescribed or if the statement submitted by him appears to the assessing authority to be incorrect or incomplete, the assessing authority may assess the dealer provisionally for that month to the best of his judgment, recording the reasons for such assessment, and proceed to demand and collect the tax on the basis of such assessment: Provided that before taking action under this sub-section the dealer shall be given a reasonable ....

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....uthority while concluding the regular assessment would not attract the levy of interest. It is held that an harmonious reading of Sub-sections (1), (2), (3), (3A) and (4) of Section 12-B makes it clear that the phrase 'paid' and 'payable' employed in sub-Section (2) shall be the determination of advance tax made subsequent to final assessment by the Assessing Authority. As such, it can be held without any hesitation that Section 7[2] would certainly not be applicable in the facts of the present case when the tax element has been quantified by the Assessing Authority after concluding the final assessment, without there being any provisional assessment rejecting the returns declared by the assessee if found incorrect. 15. I....