2008 PLP (Trib (PTD)

ZAFAR UL MAJEED, MEMBER (TECHNICAL).

This appeals is directed against Order-in-Appeal No. 132/ST/2007 dated 14-4-2007 whereby Collector (Appeals), Lahore has upheld Deputy Collector, Sales Tax and Federal Excise (Refund N-Z), Lahore's Order -in-Original No.184 of 2006, dated 20-9-2006 rejecting appellant's sales tax refund claim to the extent of Rs.2,88,

485. Learned Collector (Appeals) has maintained the rejection order on the basis of certain objections raised by the STARR system e.g. abnormal tax profile, non-submission of invoice summary, registration suspended statues of suppliers and excess declared out put etc.

2. The appellant's case is (i) that the supplier units were very much operative during the period purchases were made, (ii) that the suppliers did submit summery statements attested by buyers and suppliers which meet the requirements of Standing Order No.3 of 2006, dated 27-11-2006 and (iii) that the abnormal tax profile of supplier has no concern with the appellant as long as the purchases were made by it along with required supporting documents; besides the issue regarding abnormal tax profile of Messrs Fiza Textile is not related to the tax period when purchases were made. During the course of hearing, learned counsel also placed on record a copy of the appellant's audit report, dated 15-7-2005 whereby no objection of the type taken for rejection of refund claim was raised.

3. Learned D.R. defended the impugned order mainly on the ground that the purchase invoices submitted by the appellant in support of refund claim could not be considered genuine because of either registration suspended status of suppliers or their abnormal tax profile' He also insisted that the invoice summary statements of suppliers referred to by the appellant were sent to concerned Collectorate but their verification report had not been received. However, during the pendency of instant appeal, on the direction of this Tribunal, learned D.R. obtained required verification report from Collectorate of Sales Tax Faisalabad which has been placed on record.

4. I have examined the record of the case and given due consideration to the submissions made by both sides. The emergent position is that the department rejected appellant's refund claim only on the basis of objections raised by the STARR without making any effort to substantiate them by physical verification as to whether the supplier units were operative during the relevant period and whether the supplies in question were actually tax paid. Moreover, abnormal tax profile of a supplier should not be taken as a ground to reject refund claims unless it is confirmed that the tax against supplies in question was actually not paid. Moreover the invoice summary statements of the suppliers verified by the concerned Collectorate of Sales Tax obtained by the D.R. during the pendency of this appeal need to be scrutinized before arriving at any conclusion. All this can best be done at the original stage of adjudication.

5. In view of the foregoing, I find that the impugned order is not maintainable which is set aside and the case is remanded to he adjudicating officer for a fresh decision on merits and in accordance with law after giving the appellant proper opportunity of hearing in the light of observations made in the preceding para. S.A.K./67/Tax(Trib.) Case remanded.