STATE OF KARNATAKA Vs. JAYALAKSHMI WINE LAND

JUDGEMENT

(1.) THE short question that arises for consideration in this writ appeal is whether the penalty levied under Section 12-B (4) of the Karnataka Sales Tax Act, 1957 (for short 'the Act') for the assessment year 1992-1993 is liable to be waived in terms of Circular No. 3/1999-2000 issued by the Commissioner of Commercial Taxes, Facts which lie in a narrow compass may first be noticed.

(2.) RESPONDENT no. 1 is a dealer in liquor holding CL-1 licence on the basis of which it is carrying on its business. The business premises of this respondent were inspected by the Commercial Tax officer on 30-03-1993 and it was found that the monthly tax which was required to be paid had not been deposited. Tax amount for the year 1992-1993 was paid on 02-12-1993. Since the tax had not been paid in time the Commissioner of commercial taxes levied a penalty of Rs. 5,44,023/- under Section 12-B (4) of the Act. This penalty is sought to be waived in terms of circular No. 3/1999-2000.

(3.) IN his budget speech for the year 1999-2000 the Deputy Chief Minister who was also the finance Minister had, with a view to reduce litigations and mop up revenue locked up in disputes, declared that as one-time relief measure the penalty levied under Section 12-B (4) and 50% of interest leviable under Section 13 (2) of the Act on tax relating to assessment years up to 1996-1997 where final assessment had been communicated to the assessee and the assessee had not cleared the liability would be waived if the arrears are paid before 30. 06. 1999. On the basis of this statement, the Commissioner of Commercial Taxes issued Circular No. 3/1999-2000 providing for waiver of penalty in the aforesaid terms. It was decided to give wide publicity to the Circular so that large number of assessees/dealers under the Act could take advantage of the one-time relief measure announced by the Finance Minister. It is in terms of this circular respondent No. 1 claimed that the penalty levied on it for the assessment year 1992-1993 be waived. This claim was not accepted by the Department and an endorsement dated 21. 03. 2003 was issued informing respondent No. 1 that according to the scheme if original tax and penalty was due then only a dealer was eligible for the waiver of penalty under Section 12-B (4) of the act. Since respondent No. 1 had already paid the original tax long time back the claim for waiver of penalty was declined. The amount of penalty was then sought to be recovered from the manager, Corporation Bank, Gadag, where respondent No. 1 had its accounts. It was this action of the Department which came to be challenged in writ petition No. 50407/2003 which came up for hearing before a learned single Judge who by order dated 12. 12. 2003 allowed the same and remitted the matter to the Department with a direction to consider the claim of respondent no. 1 in regard to waiver of penalty and pass an appropriate order within four weeks from the date of receipt of a copy of the order. It is against this order that the Department has filed the present writ appeal.