Siddeshwar Gramadyog Sangh vs Additional Commissioner of Commercial Taxes

Dilip B. Bhosale, J.—This tax appeal is arising from the order passed by Additional Commissioner of Commercial Taxes, Zone-I, Bangalore, in revision u/s 15(2) of the Karnataka Tax on Entry of Goods Act, 1979 (for short, "the Act"), whereby the suo motu revision has been allowed vide order dated March 12, 2010 and the order dated June 2, 2006 passed by the assessing authority u/s 6(1) of the Act has been restored. By assessment order dated June 2, 2006 passed u/s 6 of the Act, the assessing officer held that the appellant was liable to pay entry tax of Rs. 3,61,791 and penalty u/s 6(2) of the Act, equal to the entry tax. That order was carried in appeal by the appellant before the Joint Commissioner of Commercial Taxes (Appeals) u/s 13(5) of the Act. The appeal was allowed and the orders under sections 6(1) and 6(2) of the Act, whereby the entry tax and the penalty that was levied by the assessing officer came to be set aside. Against this order a suo motu revision u/s 15(2) of the Act was taken by the Additional Commissioner of Commercial Taxes.

The learned counsel for the appellant, at the outset, invited our attention to section 6(2) of the Act and submitted that having considered the peculiar facts and circumstances of the case and that for the first time such order has been passed against the appellant, the authorities below ought to have exercised their discretion in imposing lesser penalty. Sub-section (2) of section 6 of the Act provides that in making an assessment under sub-section (1) the assessing authority "may", if it is satisfied that the escape from assessment is due to willful non-disclosure of the entry of such goods by the dealer, direct him to pay in addition to the tax assessed under sub-section (1) a penalty not exceeding one and a half times the tax so assessed. In other words a penalty up to one and a half times the tax so assessed. From bare perusal of this provision it appears to us that a discretion is conferred on the authority to impose/levy penalty not exceeding one and half times the tax. Having considered the submission of learned counsel for the appellant and peculiar facts and circumstances of the case and having considered the provisions contained in sub-section (2) of section 6 of the Act, we are inclined to reduce the penalty. Learned Government Advocate also has not seriously opposed the submission made by learned counsel for the appellant. In the circumstances, we reduce the penalty to Rs. 2,00,000. Rest of the order passed by the revisional authority is confirmed.