2011 PLP (Trib (PTD)

Through this appeal we intend to dispose of the above captioned appeal filed by the appellant on a number of grounds whereas the legal objections are as follows:-- (1) That the Order-in-Original is void ab initio for being not passed within the stipulated period as contained in the provision of Sales Tax Act, 1990. (2) That the contested issue falls under section 36 of the Sales Tax Act, 1990 and not under the provision of section 36(1) hence on this score count as to the order is barred by limitation. Besides the above legal issue a number of factual grounds have also been agitated. Precisely the facts of the case are that in the case of appellant who runs a Re-rolling Steel Mills the order of Collectorate of Sales Tax and Federal Excise, Peshawar conducted audit of appellant whereby it was observed that during the period of March 1998 to April 2001 the assessable value M.S steel bars in the local industry was 15800 per metric ton but on the contrary the appellant assessed its supplies on the lowest value, thus provisions of section 2(46) are attracted. In this way the amount of Rs.1,510,112 on account of sales tax was paid short. This attracts additional tax under section 34 amounting to Rs.1,391,863 calculated up to 15th July 2001 along with penal action under section 33(2cc) of the Sales Tax Act, 1990. Respondent was required to claim input tax amounting to Rs.30360, Rs.20206, Rs.129338, Rs.4629 in the relevant tax periods 7/98, 9/98, 10/98, 11/98 respectively, but the said input tax was not brought forward in the relevant tax periods and thus respondent erroneously claimed inadmissible input tax amounting Rs.184533 as carry forward in the tax period February 1999 against nil carry forward for the tax period January 1999, which is violation of section 7 and attracts additional tax at Rs.758242 upto 15-7-2001 besides penal action under clause (cc) of section 33 of the Sales Tax Act, 1990 was taken. Also it was observed that respondent failed to pay further tax at Rs.97968. The appellant received the advances but at the time of receipt of advances no sales tax was paid accordingly. It was also observed that respondent was liable to pay sales tax according to the bench mark of 200 units of electricity fixed by C.B.R. for the production of one ton of M.S products vide circular C.No.4/85-STB/97 dated 25-10-1997 but the unit disclosed lesser production than the fixed bench mark, which resulted into short payment of Rs.632443 and is recoverable along with additional tax. On the aforementioned point contravention report was prepared, SCN was issued and after its reply O.N.O was framed vide No.42/2005 dated 30-11-2005. Feeling aggrieved from the O.N.O appellant filed appeal before the Collector Sales Tax and Federal Excise, Sales Tax House Phase-II, Hayatabad, whereby the appeal instituted on behalf of the appellant was rejected. It is this treatment against which appellant has preferred this further appeal before the Tribunal. Arguments of the rival parties heard, relevant order and the law on the subject examined. The L/AR before us mainly stressed the legal grounds about limitation. Istly that Order-in-Original has been passed after prescribed period as stipulated in section 45 of the Sales Tax Act, 1990. As per this provision order shall be passed within 90 days, but the order has been passed after 635 days after issuance of SCN. 2nd it was contested that the provision of section 36(1) has erroneously been invoked as per the merits of the case it falls under section 36(2) of Sales Tax Act, 1990, hence liability prior to 4-10-2000 is barred by time. Before the L/Collector (Appeal) this objection was taken at Sr. No. 1 comments on this point were as sought by the 1st appellate authority, no comments were given by the Collector with the plea that this objection is related to adjudicating authority, however vide the impugned order the 1st appellate authority has not given any adjudication. We are persuaded to agree with the contention of L/AR of the appellant on account of 1st legal objection under the law as contained in section 45 presently under the proviso of section 36 that after issuance of show cause notice O.N.O should be passed within 90 days, but for sufficient reason Commissioner may extend period of 60 days. In the case SCN was issued on 4-10-2003, whereas O.N.O has been framed on 30-11-2005 which is after 635 days. The L/DR was unable to explain the delay occurred in completion of O.N.O. Thus the Order-in-Original being barred by time is not tenable, hence SCN and O.N.O are vacated. H.B.T./87/Tax(Trib.) Appeal allowed.