Chapter VIII Chapter VIII

Penalties, Offences and Power to make Rules

Penalty relating to registration.-

1. (1) A promoter who, without reasonable cause, fails to apply for registration within the time prescribed shall be liable to a penalty of twenty five thousand rupees.
2. (2) Any other person who, without reasonable cause, fails to apply for registration within the time prescribed shall be liable to a penalty of twenty five thousand rupees.
3. (3) The power to levy the penalties shall be vested in the Assistant Commissioner.

Penalties relating to statement or returns.-

1. (1) A promoter or other person who fails to furnish a statement or return or who fails to pay the tax due on any statement furnished as required under Section 11 shall be liable to a penalty of one thousand rupees for each day of default in addition to a further penalty of a sum not less than ten per cent but not exceeding fifty per cent of the amount of tax due, together with any tax or interest due.
2. (2) The power to levy the penalty under this Section shall be vested in the Assistant Commissioner.

Penalties relating to the keeping of records:-

1. (1) Any promoter or other person who fails to keep and maintain proper records, in accordance with Sections 19 shall be liable to a penalty of five thousand rupees and, in addition, one thousand rupees per day for so long as the failure continues after being given an opportunity to show cause against such imposition of penalty.
2. (2) Any promoter or other person who fails to retain records and accounts in accordance with Section 19, after being given the opportunity of showing cause in writing against the imposition of a penalty, shall be liable to a penalty of ten thousand rupees.
3. (3) The power to levy the penalties under this Section shall be vested in the Assistant Commissioner.

Penalties relating to production of records and furnishing of information.-

1. (1) Any promoter or person who on demand by the authorized officer fails to produce any records or furnish any information in accordance with the requirements of this Act, after being given the opportunity of showing cause in writing against the imposition of a penalty, shall be liable to a penalty of five thousand rupees and, in addition, one thousand rupees per day for so as long as the failure continues.
2. (2) The power to levy the penalties under this Section shall be vested in the Assistant Commissioner.

Penalties relating to seals and to unaccounted lottery tickets.-

1. (1) Any person who removes, or in any way tampers with, a seal attached under the provisions of clause
   • (f) of sub-section
2. (1) of Section 20, shall be liable on conviction by a Court, not inferior to that of a Magistrate of the First Class, to a fine of not less than five thousand rupees but not exceeding fifty thousand rupees and imprisonment for a period not less than fifteen days but not exceeding one year.
3. (2) Any person or promoter who is found to be in possession of unaccounted lottery tickets under the provisions of clause
   • (i) of sub-section
4. (1) of Section 20, after being given the opportunity of showing cause in writing against the imposition of a penalty, shall be liable to a penalty of five thousand rupees.
5. (3) The power to levy the penalty under sub-section
6. (2) shall be vested in the officer authorised under section 20.

Obstruction, etc.. -Any person who obstructs, hinders, molests or assaults an authorised officer or any other public servant assisting him in the performance of his duties under this Act, or does anything which is likely to prevent or obstruct any search or production of evidence, shall on conviction be liable to a fine of not less than five thousand rupees but not exceeding fifty thousand rupees and imprisonment for a period not less than fifteen days but not exceeding one year.

Fraudulent evasion of tax.- Without prejudice to the provisions of Sections 22 to 26, if any person is knowingly concerned in, or in the taking of steps with a view to, the fraudulent evasion of tax by him or any other person, he shall be liable to a fine of one lakh rupees or double the amount of the tax evaded, whichever is the higher or to imprisonment for a period of not less than six months but not exceeding five years, or to both.

Cognizance of offences.- No Court shall take cognizance of any offence punishable under Sections 28 except with the previous sanction of the Joint Commissioner.

Compounding offences.-

1. (1) Where any promoter or person has committed an offence under sub-section
2. (1) of Section 26 or Section 28, the authorized officer may, on admission by such promoter or person in writing and upon his option to compound at any time prior to the commencement of the court proceedings relating thereto, compound such offence and order the promoter or person to pay such sum of money as specified by the authorized officer, provided it does not exceed the amount of the fine prescribed for the offence in addition to any tax and interest due.
3. (2) Furnishing of a cheque or any other instrument towards payment of a sum by any such promoter shall be deemed to be an application for compounding the offence.
4. (3) Where the authorized officer compounds an offence under this Section, the order referred to in sub-section (1),
   • (a) shall be in writing and specify the offence committed, the sum of money to be paid and the due date for the payment;
   • (b) shall be served on the promoter or person who committed the offence;
   • (c) shall be final and not subject to any appeal; and
   • (d) may be enforced in the same manner as a decree of a court for the payment of the amount stated in the order.
5. (4) When the authorized officer compounds an offence under this Section, the promoter or person concerned shall not be liable to prosecution in respect of such offence or to any further penalty under this Section and such promoter or person shall not appeal against the said proceedings.

Offences by companies, etc.-

1. (1) Where an offence under this Act has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.
2. (2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.- For the purposes of this section.-
   • (a) “Company” means any body corporate and includes a firm or other association of individuals; and
   • (b) “Director”, in relation to a firm, means a partner in the firm.

Validity of assessments not to be questioned in prosecution.- The validity of the assessment of any tax or of the levy of any fee or other amount, made under this Act, or the liability of any person to pay any tax, fee or other amount so assessed or levied shall not be questioned in any Criminal Court in any prosecution or other proceeding, whether under this Act or otherwise.

Bar and limitation to certain proceedings.-

1. (1) No suit, prosecution or other proceeding shall lie against any officer or servant of the State Government, for any act done or purported to be done under this Act without the previous sanction of the State Government.
2. (2) No officer or servant of the State Government shall be liable in respect of any such act in any civil or criminal proceeding if the act was done in good faith in the course of the execution of duties or the discharge of the functions imposed by or under this Act.
3. (3) No suit shall be instituted against the State Government and no suit, prosecution or other proceeding shall be instituted against any officer or servant of the State Government in respect of any act done or purporting to be done under this Act, unless the suit, prosecution or other proceeding is instituted within six months from the date of the act complained of.

Courts not to set aside or modify assessments except as provided under this Act.- Notwithstanding anything contained in any law for the time being in force, no suit or other proceedings shall be entertained by any court, except as expressly provided for under this Act, to set aside or modify any assessment or other proceedings commenced by virtue of the provisions of this Act, and no such court shall question the validity of any assessment, levy of penalty or interest nor grant any stay of proceedings or recovery of any amount due under this Act.

Appearance before any Authority in proceedings.- Any person who is entitled to appear before any authority other than the High Court in connection with any proceeding under this Act, may be represented before such authority-

1. (a) by his relative or a person regularly employed by him if such relative or person is duly authorized by him in writing in this behalf;
2. (b) by a legal practitioner.

Power to summon persons to give evidence.- The officers empowered by rules made in this behalf shall have all the powers conferred on a Court by the Code of Civil Procedure, 1908 (Central Act V of 1908), for the purpose of securing attendance of persons or the production of documents in any enquiry under this Act.

Power to make rules.-

1. (1) The State Government may, make rules, by notification, to carry out the purposes of this Act.
2. (2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for:
   • (a) all matters expressly required or allowed by this Act to be prescribed;
   • (b) determination of liability of any person for purposes of registration;
   • (c) the assessment to tax under this Act of business which are discontinued or the ownership of which has changed;
   • (d) compelling the submission of statements or returns and the production of documents and enforcing the attendance of persons and examining them on oath or affirmation;
   • (e) securing that returns furnished or accounts or documents produced or evidence of any kind given under this Act before any prescribed authority or an appeal or revision from any decision of such authority are kept confidential;
   • (f) the duties and powers of officers appointed for the purpose of enforcing the provisions of this Act;
   • (g) the fees payable for the grant of duplicate certificates of registration or copies of such certificates or of any other document;
   • (h) the maintenance of documents or accounts of receipts or purchases and sales of lottery tickets by promoters or persons and the time for which they should be preserved;
     • (i) generally regulating the procedure to be followed and the forms to be adopted in proceeding under this Act;
   • (j) any other matter for which there is no provision or no sufficient provision in this Act and for which provision is, in the opinion of the Government, necessary for giving effect to the purposes of this Act.
3. (3) In making a rule under sub-section
4. (1) or sub-section (2), the State Government may provide that a person guilty of breach thereof shall, on conviction by a Magistrate of the first class, be punishable with fine which may extend to five thousand rupees and where the breach is a continuing one, with further fine which may extend to one hundred rupees for every day after the first during which the breach continues.
5. (4) Any rule under this Act may be made to have effect retrospectively and when any such rule is made, a statement specifying the reasons for making such a rule shall be laid before both Houses of the State Legislature along with the rule under section 38, and all rules, shall, subject to any modification made under Section 38, have effect as if made in this Act.

Laying of rules and notifications before the State Legislature.- Every rule made under this Act and every notification issued under Section 39 shall be laid as soon as may be after it is published before each House of the State Legislature while it is in session for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if before the expiry of the session in which it is so laid or the sessions immediately following, both Houses agree in making any modification in the rule or notification or both Houses agree that the rule or notification should not be made, the rule or notification shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or notification.

Power to remove difficulties.- If any difficulty arises in giving effect to the provisions of this Act, the Government may by notification make such provision as may appear to it to be necessary or expedient for removing difficulty.

Repeal and savings.-

1. (1) The Karnataka Tax on Lotteries Ordinance, 2003 (Karnataka Ordinance 10 of 2003) is hereby repealed.
2. (2) Notwithstanding such repeal anything done or any action taken under the said Ordinance shall be deemed to have been done or taken under this Act.