LAWS(KAR)-1981-4-15

MODI RUBBER LTD Vs. COMMISSIONER OF COMMERCIAL TAXES

Decided On April 02, 1981
MODI RUBBER LTD. Appellant
V/S
COMMISSIONER OF COMMERCIAL TAXES Respondents

JUDGEMENT

(1.) This appeal is presented under S. 24 (1) of the Karnataka Sales Tax Act 1957 (hereinafter referred to as the Act) against the suo motu revisional order made by the Commissioner in exercise of his powers under S. 22-A of the Act setting aside the order of the Deputy Commissioner of Commercial Taxes who had modified the assessment order made by the Assistant Commissioner of Commercial Taxes, (Assessment-I) Bangalore under S. 12-B of the Act.

(2.) Briefly stated the facts of the case are :-The appellant is M/s Modi Rubber Limited having its registered office at Modinagar, U. P. It started its branch depot at Bangalore on 19th June 1975. It is a dealer in tyres and tubes. For the assessment period commencing from 19th June, 1975, to December 1975 there had been delay on the part of the appellant in paying monthly taxes every month as required under S. 12-B (1) of the Act. The Assistant Commissioner of Commercial Taxes (Assessment-I), Bangalore issued a notice under S. 12-B (2) of the Act calling upon it to show cause why penalty as provided in that provision should not be imposed.

(3.) In reply to the said notice the assessee stated as follows : The company went into the market for the first time in October, 1974. Its depot in Bangalore was opened only on 19th June, 1975. At the initial stages the company had to face difficulties as the market was highly competitive. In the circumstances, the company had to effect sales on credit basis to its customers. As there was delay on the part of the purchasers in making payment of sale price it was not in a position to pay the advance tax be- fore the prescribed date. However, the entire tax for the period had been paid before filing the final returns. It had paid tax of Rs. 10 lakhs and odd. The turnover figures furnished by the company had been accepted. The delay in payment of instalments under these circumstances was bona fide and inevitable.