YESHASWI CASHEW Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) THE appellant is the writ petitioner in Writ Petition No. 33953 of 1996, The petitioner in that writ petition is a partnership firm. The appellant questioned the demand notices-- annexures "b" and "f" dated November 4, 1996 and November 30, 1996 calling upon it to pay penalty of Rs. 2,00,269 apart from the tax due for the year 1992-1993. The penalty was demanded under section 13 (2) (ii) of the Karnataka Sales Tax Act, 1957. This penalty was for non-payment of tax within the stipulated time. The appellant filed a writ petition challenging the assessment order. This Court granted an order of stay on March 7, 1994, The writ petition was dismissed and even the appeal filed thereon was dismissed on November 15, 1995. Thereupon, the impugned notice was issued. The appellant contended that in view of the stay order granted by this Court, there was no default in the payment of tax and, therefore, the period during which stay was imposed should be excluded in calculating the interest. It is also contended that the imposition of interest at 24 per cent for the first three months and 30 per cent thereafter is discriminatory and violative of Article 14 of the Constitution for the reason that in case of refund to the assessee, the interest is payable only at the rate of 12 per cent under Section 13-A of the Act. Both the contentions were rejected by the learned single Judge. In this appeal, the learned counsel for the appellant has laid stress on the first point. As regards the first point, the learned single Judge observed that : "the provisions of Section 13 contemplates a default in not making the payment of tax due under the Act. The default continues even when the stay is granted by a competent authority. It is only the operation of that order which is temporarily stayed. If, ultimately, the appeal/revision or writ is accepted, the position may be different. Otherwise, the result would be that, the action under Section 13 (2) (ii) would be taken even in a case where the demand was under stay. "

(2.) THE learned counsel for the appellant has placed strong reliance on a recent decision of the supreme Court in Consolidated Coffee Ltd. v. Agricultural Income-tax Officer, Madikeri [2001] 248 ITR 417 ; (2001) 1 SCC 278, whereas the learned Government Advocate has placed reliance on the decision of the Supreme Court in Haji Lal Mohd. Biri Works v. State of U. P. AIR1973 SC 2226 , (1974 )3 SCC137 , [1974 ]1 SCR25 , [1973 ]32 stc496 (SC ).

(3.) SECTION 13 of the Karnataka Sales Tax Act in so far as it is relevant reads as follows :