2007 PLP (Trib (PTD)

CH. FARRUKH MAHMUD (MEMBER (JUDICIAL)).

Brief facts are that during audit for the period 3/4, it was observed that the appellant had not paid Sales Tax of Rs.4,17,699 to the ginners in accordance with the provisions of Special Procedure of Ginning Industry Rules, 1996 notified vide S.R.O. No. 1271(I)/96, dated 10-11-1996. A show-cause notice was, therefore, issued calling upon the appellant to pay the aforesaid amount along with additional tax and penalty.

2. During proceedings before the learned Assistant Collector, the 'appellant had moved an application seeking permission to pay arrears of Sales Tax in easy instalments and after due permission to appellant paid the said amount of Sales .Tax amounting to Rs.4,17,699 under order C.No.IV-ST/Chunian/R/Hyd/186/002/777 dated 20-12-1996. However, the learned Assistant Collector accepted the payment but held that the said arrangement was provided to facilitate in the discharge of Sales Tax liability only and there was no specific order regarding waiver of additional tax and penalties. Consequently, the learned Adjudicating Officer ordered the appellant to deposit additional tax under section 34(1) of the Sales Tax Act, 1990 along with penalty under section 33(5)(a) @ 5% on the principal amount vide Order-in-Original No.59/BWP of 2006, dated 12-8-2006.

3. Aggrieved from the above said orders, the appellant filed an appeal before the learned Collector(Appeals) who upheld the observation of the learned Adjudicating Officer that said arrangements were provided to facilitate the appellant for payments of sales tax and dismissed the appeal vide Order-in-Appeal No.432 of 2006, dated 20-9-2006 (dispatched on 4-10-2006).

4. The instant appeal is outcome of the said Order-in-Appeal.

5. The Darned counsel appearing on behalf of the appellant has been heard. It is contended that as the appellant could not pay the tax in time the appellant, therefore, sought for condonation of time limit through an application filed before the Member (Audit), Central Board of Revenue, Islamabad. It is further contended that the application was accepted and the appellant was allowed to deposit the due sales tax in instalments. The permission to pay due sales tax in instalments is not denied by the Department. The Central Board of Revenue and the Collector are authorized to extend "any time or period" having specified under any of the provisions of the Act or Rules made therein and permit the application to do the same within the period as it may consider appropriate. In this case, the competent authority was moved with the request to condone the delay and allow payment of the due tax in instalments which was allowed and as per permission the instalments were paid.

6. The appellant had paid the due sales tax in instalments. It cannot be said that the competent authority had not waived the additional tax or the penalty, which could have been imposed and recovered. The competent authority did not refuse to extend time. The lower forums however, imposed additional tax anal penalty simply on the ground that there is no specific order regarding waiver of additional tax and penalty vide Executive Order dated 20-12-2004. Admittedly, the perusal of the order dated 20-12-2004 reveals that there is no specific order that additional tax and penalty should be recovered in instalments. The absence of any such specific order regarding recovery of additional tax and penalty goes in favour of the appellant.

7. I am of the view that since the competent authority had allowed the appellant to pay the due sales tax in instalments. It meads that the competent authority had waived the additional tax and penalty. Had the appellant failed to pay the due sales as per schedule of instalments allowed, than he could have been burdened with additional tax and penalty. In this case the appellant has discharge the liability in instalments as allowed by the competent authority so the appellant could not be burdened with additional tax and penalty.

8. In view of the above discussion, the appeal is accepted. C.M.A./82/Tax(Trib.) Appeal accepte