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Gurappa Veerappa Mensinakai Vs. the Additional Commercial Tax Officer, Third Circle, Hubli and ors. - Court Judgment

LegalCrystal Citation
SubjectSales tax
CourtKarnataka High Court
Decided On
Case NumberWrit Petition No. 972 of 1974
Judge
Reported in[1976]37STC236(Kar)
ActsKarnataka Sales Tax Act - Sections 6, 9, 13 and 13(2); State Legislature Passed Act, 1972
AppellantGurappa Veerappa Mensinakai
RespondentThe Additional Commercial Tax Officer, Third Circle, Hubli and ors.
Appellant AdvocateB.V. Katageri, Adv.
Respondent AdvocateB.B. Mandappa, High Court Government Pleader
Excerpt:
.....any assessment, reassessment, revised assessment, levy or collection of any tax made or purporting to have been made, any action, or thing taken or done (including any notices or orders issued or assessments, payments, recoveries or refunds made and all proceedings held for the levy or collection of tax or amount purported to have been collected by way of tax), in relation to such assessment, reassessment, revised assessment, levy or collection under the provisions of the principal act before the commencement of this act shall be deemed to be as valid and effective as if such assessment, reassessment, revised assessment, levy or collection or action or thing had been made, taken or done under the principal act as amended by sections 6 and 9 of this act .after the above validation act..........that no tax was recoverable on the basis of the said order of assessment. consequently, the penalty payable under section 13(2) of the act was also assumed to be not recoverable. later on, the state legislature passed act 5 of 1972, which provided for validation of all orders of assessment passed after the firms were dissolved in respect of periods during which they were carrying on business. the relevant part of section 13 of that act, which validated such orders of assessment, reads as follows : '13. validation of assessments, etc. - notwithstanding anything contained in any judgment, decree or order of any court or tribunal or other authority to the contrary any assessment, reassessment, revised assessment, levy or collection of any tax made or purporting to have been made, any.....
Judgment:
ORDER

Venkataramiah, J.

1. The petitioner was a partner of a firm by name M/s. M. R. Ingalhalli, which was a dealer within the meaning of the expression as given in the Karnataka Sales Tax Act (hereinafter referred to as the 'Act'). After the firm was dissolved, the authority under the Act passed an order of assessment in respect of transactions which the firm had carried on before it was dissolved. In view of the decision of this court in S. S. Navalgi v. Commercial Tax Officer, Jamkhandi [[1971] 28 S.T.C. 580], it was assumed by all concerned that no tax was recoverable on the basis of the said order of assessment. Consequently, the penalty payable under section 13(2) of the Act was also assumed to be not recoverable. Later on, the State Legislature passed Act 5 of 1972, which provided for validation of all orders of assessment passed after the firms were dissolved in respect of periods during which they were carrying on business. The relevant part of section 13 of that Act, which validated such orders of assessment, reads as follows :

'13. Validation of assessments, etc. - Notwithstanding anything contained in any judgment, decree or order of any court or tribunal or other authority to the contrary any assessment, reassessment, revised assessment, levy or collection of any tax made or purporting to have been made, any action, or thing taken or done (including any notices or orders issued or assessments, payments, recoveries or refunds made and all proceedings held for the levy or collection of tax or amount purported to have been collected by way of tax), in relation to such assessment, reassessment, revised assessment, levy or collection under the provisions of the principal Act before the commencement of this Act shall be deemed to be as valid and effective as if such assessment, reassessment, revised assessment, levy or collection or action or thing had been made, taken or done under the principal Act as amended by sections 6 and 9 of this Act ......'

After the above validation Act was passed, the Tahsildar having jurisdiction over the area in which the petitioner resided, proceeded to recover the tax due from the petitioner on the basis of the above-mentioned order of assessment as well as the penalty payable under section 13(2) of the Act.

2. In this writ petition the petitioner has questioned the power of the authorities under the Act and the Tahsildar to recover the penalty payable under section 13(2) of the Act only. He has not questioned the liability to pay the tax.

3. Sri B. V. Katageri, the learned counsel for the petitioner, contended that since the validating provision on which reliance is placed did not validate the penalty payable by the petitioner, it was not open to the authorities concerned to recover the penalty payable under section 13(2) of the Act. In support of his contention he has relied on the decision of a Division Bench of this Court in State of Mysore v. Babulal Dungarchand and Co. [[1973] 32 S.T.C. 598], in which this court had to construe the applicability of a similar validating provision in Mysore Act 9 of 1964. It was held by this court that in the absence of specific reference to the penalties payable under the Act in the validating provision it was not open to the sales tax authorities to recover any penalty, which but for the validating provision would not be recoverable. Section 13 of the Karnataka Act 5 of 1972 extracted above does not specifically refer to the validation of penalties payable under the Act. I feel that the submission made on behalf of the petitioner has to be sustained.

4. Sri B. B. Mandappa, the learned Government Pleader, however, relied upon another decision of the very same Division Bench in Sterling Construction and Trading Co. v. Commercial Tax Officer, X Circle, Seshadripuram, Bangalore-21 [[1973] 32 S.T.C. 235] and contended that the penalty payable under section 13(2) of the Act was different from other penalties leviable under the statute. But, it is not possible to accept the submission made on behalf of the sales tax authorities in view of the decision in Babulal's case [[1973] 32 S.T.C. 598], referred to above, in which the question for consideration before this court was whether penalty leviable under section 13(2) can be recovered or not. The said decision is binding on me.

5. In view of the foregoing, this writ petition is allowed. The respondents are directed to forbear from recovering from the petitioner the penalty claimed under section 13(2) of the Act in respect of sales tax payable for the assessment year 1963-64. No costs.

6. Petition allowed.


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