Provided that no prosecution for an offence under section 21 shall be instituted in respect of the same contravention for which a penalty has been imposed under this section.

Payment and disbursement of amounts wrongly collected by dealers as tax Payment and disbursement of amounts wrongly collected by dealers as tax.-

1. (1) Where any amount is collected by way of tax or purporting to be by way of tax from any person by any dealer in contravention of section 3A, whether knowingly or not, such dealer shall pay the entire amount so collected to the assessing authority within twenty days after the close of the month in which such amount was collected, notwithstanding that the dealer is not liable to pay such amount as tax or that only a part of it is due from him as tax under this Act.
2. (2) If default is made in payment of the amount in accordance with sub-section (1),-
   • (i) the whole of the amount outstanding on the date of default shall become immediately due and shall be a charge on the properties of the dealer ;
   • (ii) the dealer liable to pay the amount shall pay interest at the rate of one and a quarter per cent of such amount for each month of default; and
   • (iii) the whole of the amount remaining unpaid along with the interest calculated under clause
   • (ii) of this sub-section shall be recoverable in the manner specified in section 8. Explanation.- For the purpose of this sub-section, non-payment during any period during which recovery of any amount due under this Section is stayed by an order of any authority or Court in any appeal or other proceedings disputing such amount, shall be deemed to be a ‘default’, unless the appeal or other proceeding is allowed by such Authority.
3. (3) Notwithstanding anything contained in this Act or in any other law for the time being in force, any amount paid or payable by any dealer under sub-section
4. (1) shall, to the extent it is not due as tax be forfeited to the State Government and be recovered from him and such payment or recovery shall discharge him of the liability to refund the amount to the person from whom it was collected.
5. (4) Where any amount is paid or recovered by or from any dealer under sub-section
6. (1) or (3), a refund of such amount or any part thereof can be claimed from the State Government by the person from whom it was realised by way of tax provided an application in writing in the prescribed from is made to the Commissioner within two years from the date of the order of forfeiture. On receipt of any such application, the Commissioner shall hold such inquiry as he deems fit and if the Commissioner is satisfied that the claim is valid and admissable and that amount as claimed as refund is actually paid or recovered, he shall refund the amount or any part thereof, which is found due to the persons concerned.
7. (5) Where any amount is collected by way of tax or purporting to be by way of tax in contravention of section 3A at any time before the commencement of the Karnataka Taxation Laws (Amendment) Act, 1994 the provisions of sub-sections
8. (3) and
9. (4) shall apply to such amounts collected. 3C. Omitted 1[3C. x x x]1

¹ Inserted by Act 18 of 1989 and omitted by Act 5 of 1993 w.e.f.9.11.1992