2024 PLP 1214 (PTD)

SYED ARSHAD ALI, J.

This consolidated judgment is aimed to decide the instant Sales Tax Reference as well as connected STR Nos. 74-P/2022, 75-P/2022 and 92-P/2022 as essentially adjudication of common questions of law and facts are involved therein. STR No. 33-P/2022

2. Brief facts of the case are that during the course of sales tax audit conducted by the staff of Director General Audit Inland Revenue Receipts ("DGAIRR"), Lahore for the tax period July, 2017 to June, 2018, it was observed that the respondent has not paid sales tax on differential amount declared in the income tax return and sales tax return. Accordingly, a show-cause notice was issued to the respondent on 11.12.2019, however, the Assessing Officer being not satisfied with the explanation offered by the respondent has ordered for recovery of principal amount of sales tax Rs. 2,546,677,110/- along with default surcharge and penalty. He has also ordered for vacation of demand to the extent of Rs. 242,540,678/- vide assessment order No. 10/2020 dated 07.05.2020. The learned First Appellate Forum though affirmed the order of Assessing Officer, however, the worthy Tribunal has accepted the appeal of respondent and annulled the orders of both the lower fora vide impugned order dated 17.01.2022. Feeling aggrieved, the petitioner-department has filed the instant Reference. STR No. 74-P/2022

3. Brief facts of the case are that during the course of sales tax audit conducted by the staff of Director General Audit Inland Revenue Receipts ("DGAIRR"), Lahore for the tax period July, 2013 to June, 2014, it was observed that the respondent has suppressed supplies amounting to Rs. 5,173,691,694/- involving sales tax Rs. 879,527,588/- which is violation of section 3 of the Sales Tax Act, 1990 ("Act"). Accordingly, a show-cause notice was issued to the respondent on 08.02.2017, however, the Assessing Officer being not satisfied with the explanation offered by the respondent has ordered for recovery of sales tax amounting to Rs. 879,527,588/- along with default surcharge and penalty at the rate of 5% of the evaded amount of sales tax vide assessment order No. 7/2017 dated 29.06.2017. The learned First Appellate Forum though affirmed the order of Assessing Officer, however, the worthy Tribunal has accepted the appeal of respondent and annulled the orders of both the lower fora vide impugned order dated 13.06.2022. Feeling aggrieved, the petitioner-department has filed the instant Reference. STR No. 75-P/2022

4. Brief facts of the case are that during the course of sales tax audit conducted by the staff of Director General Audit Inland Revenue Receipts ("DGAIRR"), Lahore for the tax period July, 2016 to June, 2017, it was observed that the respondent has short paid sales tax amounting to Rs. 2,028,847,559/- which is violation of section 3 of the Act. Accordingly, a show-cause notice was issued to the respondent on 04.12.2018, however, the Assessing Officer being not satisfied with the explanation offered by the respondent has ordered for recovery of sales tax amounting to Rs.879,527,588/- along with default surcharge and penalty at the rate of 5% of the evaded amount of sales tax vide assessment order No. 7/2017 dated 29.06.2017. The learned First Appellate Forum though affirmed the order of Assessing Officer, however, the worthy Tribunal has accepted the appeal of respondent and annulled the orders of both the lower fora vide impugned order dated 13.06.2022. Feeling aggrieved, the petitioner-department has filed the instant Reference. STR No. 92-P/2022

5. Brief facts of the case are that during the course of sales tax audit conducted by the staff of Director General Audit Inland Revenue Receipts ("DGAIRR"), Lahore for the tax period July, 2014 to June, 2015, it was observed that the respondent has suppressed supplies amounting to Rs.10,267,406,973/- involving sales tax Rs.1,745,459,185/-which is violation of section 3 of the Act. Accordingly, a show-cause notice was issued to the respondent 08.02.2017, however, the Assessing Officer being not satisfied with the explanation offered by the respondent has ordered for recovery of sales tax amounting to Rs. 1,745,459,185/- along with default surcharge and penalty at the rate of 5% of the evaded amount of sales vide assessment order No. 8/2017 dated 29.06.2017. The learned First Appellate Forum though affirmed the order of Assessing Officer, however, the worthy Tribunal has accepted the appeal of respondent and annulled the orders of both the lower fora vide impugned order dated 13.06.2022. Feeling aggrieved, the petitioner-department has filed the instant Reference.

6. Arguments heard and record perused.

7. In these References, the show-cause notices were issued to the respondent on the basis of audit conducted by Director General Audit Inland Revenue Receipts ("DGAIRR"), who does not fall within the categories of the officers as provided under section 30 of the Act. Similar issue came up before this Court in STR No. 01-P/2017, which was decided through judgment dated 16.05.2023 in the following manner:- "

4. In the present case, show-cause notice was issued to the respondents on the basis of audit conducted by Director General Audit Inland Revenue Receipts ("DGAIRR") who has allegedly conducted an audit in respect of sales tax invoices of the respondents for a period from March 2010 to 2013. On the basis of report of DGAIRR, the department has neither conducted any further audit under section 25 nor in terms of section 72-B of the Act. Admittedly, DGAIRR does not fall within categories of the officers as provided under Section 30 of the Act, therefore, on the basis of the said audit conducted by the DGAIRR, the assessment order could not have been passed without verification/audit of the invokes/record of the respondents. This issue has been settled by this Court in the case of "Collector of Sales Tax and Central Excise, Peshawar v. Makk Beverages (Pvt.) Ltd. Peshawar (2010 PTD 1355)". The said judgment of this Court was also affirmed by the apex Court in Civil Petition No. 1580 of 2008 when admittedly this Court while annulling the assessment order has directed that the Federal Excise and Sales Tax Department may conduct fresh audit of the respondents-unit, if so advised and permissible under the law and in case any contravention is detected, the respondents-unit may be proceeded against in accordance with law.

5. In view of the above, since the matter has already been settled by this Court as well as by the apex Court, therefore, there is no occasion to interfere in the matter; hence, this Custom Reference is answered in negative. Copy of this judgment be sent to the appellate tribunal in terms of section 86(5) of the Act".

8. Keeping in view the judicial discipline, we are not inclined to hold a different view. Therefore, these References are answered in Negative. Copy of this judgment be sent to the worthy Tribunal in terms of section 47(5) of the Act. MQ/68/P Reference dismissed.