STATE OF KARNATAKA Vs. MANDOVI MOTORS (PRIVATE) LIMITED

JUDGEMENT

(1.) The revenue has preferred these revision petitions against the order of the Karnataka Appellate Tribunal, Bangalore, allowing the assessee's appeal and holding that in respect of an assessment made under Section 12(3) of the Karnataka Sales Tax Act, 1957 (for short hereinafter referred to as 'the Act') interest stipulated under Section 12(1-B) of the Act is not attracted. Therefore interpretation of Section 12(1-B) of the Act is called in question in these revision petitions. The assessee is a private limited company engaged in the sale of Motor Cars and registered as a dealer under the provisions of the Karnataka Sales Tax Act, 1957. In relation to the assessment period 1-4-2001 to 31-3-2002, the assessment was concluded under Section 12(3) of the Act on 22-7-2004. As per the assessment order, the assessee was assessed to total tax of Rs. 22,35,27,631/- against which the assessee had paid advance tax as per the monthly returns amounting to Rs. 22,31,66,076/-, thus making short payment of tax of Rs. 3,61,555/-.

(2.) For the assessment year 1-4-2002 to 31-3-2003 the total tax due was Rs. 17,70,29,019/-, whereas the assessee had paid advance tax of Rs. 17,68,40,304/-. Thus, the short payment of tax was Rs. 1,88,715/-.

(3.) The Assessing Authority, after assessment, issued a demand notice calling upon the assessee to pay difference in tax along with interest at the rate of 2% per month. It is not in dispute the assessee on receipt of the said notice has paid the difference in tax within 30 days, but he challenged the levy of interest of 2% per month on the difference amount. Thereafter, the assessee preferred an appeal to the Joint Commissioner of Commercial Taxes (appeals), which came to be dismissed upholding the levy of interest on the difference amount of tax. Aggrieved by the said order, the assessee preferred a second appeal to the Karnataka Appellate Tribunal. The Appellate Tribunal by the impugned order held, when the assessment order is passed under Section 12(3) of the Act, if any amount of tax is found due, then on such amount found due, no interest is payable under Section 12(1-B) of the Act and therefore, the order passed by the original authority as well as the Appellate Authority insofar as the levy of interest was set aside. Aggrieved by the said orders, the revenue is in appeal.