S.R. Rajasekhara Murthy, J.
1. The writ petitions are heard on merits, namely, as to the legality of the levy of penalty under section 13(2) of the Karnataka Sales Tax Act (KST Act), on the petitioners, as per annexures A, B and C.
2.The petitioner's contention is that the provisions of section 13(2) of the KST Act are not attracted to a case of default of payment of advance tax under section 12-B(1) of the KST Act, on the facts and contentions urged in the writ petitions.
3. Sri Katageri has taken me through the scheme of the Act and the relevant provisions. It is therefore necessary to advert to the scheme of the Act with reference to the payment of advance tax in Chapter V and the relevant section 12-B(3) and 13, relating to the levy of penalty.
4. Section 12-B relates to the payment of advance tax by a dealer on the basis of the taxable turnover as disclosed in its monthly statements and admitted to be due.
5. Sri Katageri, learned counsel for the petitioners, relies upon several decisions of this Court and other High Courts, in support of his contention that no penalty under section 13(2) of the Act can be levied for default of payment of advance tax or short payment.
6. The first decision is the case of B. V. Aswathiah & Brothers v. Commercial Tax Officer, Bangalore reported in [1963] 14 STC 467 (Mys). This Court, while dealing with the assessments for the financial years 1958-59 and 1959-60 and provisions of section 13 of the Mysore Sales Tax Act, 1957, and the Rules framed thereunder, held that no penalty could be levied on a dealer till a final assessment was made under the Act and further that no penalty was liable unless the assessee became a defaulter after service of notice of demand in form 6 after assessment.
7. Section 13, as it stood at the relevant point of time, was different from the corresponding provisions under the Karnataka Sales Tax Act applicable to the relevant years in question. This decision, therefore, is not of any assistance to the petitioners.
8. The second decision is State of Rajasthan v. Ghasilal reported in : [1965]2SCR805 . That was a case which arose under the Rajasthan Sales Tax Act. Their Lordships while dealing with sections 3 and 5 which created liability to pay the tax, held that unless the tax payable is ascertained by the assessing authority under section 10 or by the assessee under section 7(2), no tax can be said to be due within the meaning of section 16(1)(b) of the Act. Section 16(1)(b) of the Rajasthan Act provided for imposition of penalty under the scheme of the Rajasthan Act and tax became due only after it was assessed either under section 10 or under section 7(2) of the Act. Section 7 imposed an obligation on the part of the dealer to make payment along with the return, of the admitted tax. This return was to be filed after the close of the accounting year. Section 10 dealt with assessments to be made as provided under the Act. Provisions of section 16 were attracted both in the case of failure to make the payment as required under section 7 and on assessment made under section 10. Therefore, their Lordships held on the basis of the scheme of the Act, that no penalty would be liable unless the tax payable was ascertained by the assessing authority under section 10 or by the assessee under section 7(2) of the Act. This is also not a case which corresponds to the provisions of section 12-B(1) and section 13 of the KST Act as are found relevant for the years in question.
9. The third decision is Jiwanmal Sons Private Ltd. v. Deputy Commissioner of Sales Tax, Jabalpur [1971] 28 STC 247 (MP).
10. The fourth decision is Commissioner of Sales Tax, M.P. v. Indian Oil Corporation Limited [1980] 46 STC 489 (MP).
the fifth case is Joy Varghese v. State of Kerala [1986] 62 STC 227 (Ker).
11. In none of these cases, the provisions of the particular State Act, that were being considered are in pari materia with section 12-B(3) or 13(2) of the Karnataka Act.
12. The only other decision which requires a close reading, is of the Madras High Court in the case of Sakthi Sugars Ltd. v. Assistant Commissioner of Commercial Taxes, Central Assessment Circle I, Coimbatore [1985] 59 STC 52. The learned counsel for the petitioners has placed strong reliance on this decision in support of his contention.
13. Their Lordships were dealing with the provisions of section 24 of the Tamil Nadu General Sales Tax Act which provides for recovery of tax.
14. Section 24(3) of the Act provides for levy of penalty for failure to pay the tax within the specified time mentioned in the notice of assessment.
15. Section 24(3) with which their Lordships were dealing, was the provision before amendment.
16. That provision read thus :
'Section 24(3) If the tax assessed under this Act or any instalment thereof is not paid by any dealer or person within the time specified therefor in the notice of assessment or in the order permitting payment in instalments, the dealer or person shall pay by way of penalty, in addition to the amount due, a sum equal to a sum calculated at the rate of one rupee for every hundred rupees or part thereof of such amount for each month or part thereof after the date specified for its payment.'
17. The High Court held, on a construction of the provisions of section 24(3), it did not apply to a case governed by rule 18 of the Rules under which the dealer could opt for payment of tax on its monthly returns in lieu of annual returns. Under rule 18(3), the dealer was required to deposit, along with the monthly return, the tax payable on the basis of the return. On a construction of the scheme of the Act, the provisions of rule 18 and section 24(3), the High Court held that no penalty could be levied in respect of the tax required to be deposited in accordance with rule 18(3). It should be noted that the wordings of section 24(3) were altogether different and the ratio of that decision cannot therefore be of any assistance to the petitioners in these cases before me.
18. Therefore, let me now examine the provisions of the Karnataka Sales Tax Act which are relevant and applicable to the present cases.
19. Under section 12-B a dealer is required to pay, in advance, the full amount of tax payable by him along with the monthly statement of return. The said provision further provides that any failure to pay the admitted tax shall, for the purpose of section 13, be deemed to be an amount due under this Act from such dealer.
20. Sub-section (3) of section 12-B provides that if at the end of the year it is found that the amount of tax paid by the dealer on his monthly returns falls short of the tax payable on the basis of the returns, a penalty not exceeding 1 1/2 times the amount that falls short, is also leviable.
21. In the present case the petitioners' challenge is to the levy of penalty imposed by the respondent under section 13(2) of the Act. This penalty is imposed at the rates specified in sub-section (2) on the advance tax which was not paid by the petitioners on the basis of the returns. The argument of the learned counsel for the petitioners is that 'any other amount due' which is inserted in sub-section (1) of section 13 does not refer to the tax payable under section 12-B(1).
22. Sri Dattu has placed strong reliance on the provisions of section 12-B read with section 13 as it stands after amendment, for the purpose of sustaining the levy of penalty under section 13(2) of the Act.
23. A notice of demand in form No. 5 is issued in a case where the dealer defaults to deposit the tax along with the monthly statements of returns filed in form No. 3. It may been seen from the said notice of demand issued in form No. 5 under rule 17(2), that the dealer is informed that he is in default of payment of the said sum due under section 12-B(1) and (2) and that the said amount would be recovered in the manner specified in section 13(3) along with the penalty leviable under section 13(2) of the Act.
24. Rule 17 of the Rules makes it obligatory on the part of the dealer and prescribes the time-limit within he has to deposit the tax payable on the returns submitted by him in form 3. Any default in making such deposit attracts penalty not only under sub-section (3) of section 12-B of the Act but also under sub-section (2) of section 13 of the Act.
25. That the amount payable under section 12-B(1), the default in payment of which occurs, is recoverable by invoking all the provisions of section 13 along with the penalty leviable under section 13(2), is also the undoubted position in law after the insertion of 'any other amount due' by Act No. 23 of 1983 in section 13(1).
26. The contention of the petitioners that no penalty is leviable under section 13(2) for the failure to deposit the admitted tax under section 12-B(1), is, therefore rejected.
27. In the result, the writ petitions are dismissed.
28. Writ petitions dismissed.