2024 PLP 275 (PTD)
COLLECTOR, SALES TAX AND FEDERAL EXCISE, REGIONAL TAX OFFICE, ISLAMABAD Versus CUSTOMS, CENTRAL EXCISE AND SALES TAX, APPELLATE TRIBUNAL, ISLAMABAD and another
| Citation | 2024 PLP 275 (PTD) |
| Forum / Court | Islamabad High Court |
| Bench Members | Miangul Hassan Aurangzeb and Arbab Muhammad Tahir, JJ |
| Parties | COLLECTOR, SALES TAX AND FEDERAL EXCISE, REGIONAL TAX OFFICE, ISLAMABAD Versus CUSTOMS, CENTRAL EXCISE AND SALES TAX, APPELLATE TRIBUNAL, ISLAMABAD and another |
| Primary Law | Sales Tax Act (VII of 1990) |
Q1: What are the key laws and sections cited in 2024 PLP 275 (PTD)?
This judgment primarily cites: Sales Tax Act (VII of 1990) as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 2024 PLP 275 (PTD)?
The case was heard and decided by the Islamabad High Court bench comprising: Miangul Hassan Aurangzeb and Arbab Muhammad Tahir, JJ.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 2024 PLP 275 (PTD) (COLLECTOR, SALES TAX AND FEDERAL EXCISE, REGIONAL TAX OFFICE, ISLAMABAD Versus CUSTOMS, CENTRAL EXCISE AND SALES TAX, APPELLATE TRIBUNAL, ISLAMABAD and another). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Laws Cited
Representation
- ----S. 73---Adjustment of input tax---Requirement of S.73 of the Sales Tax Act, 1990, non-compliance of---Question was, whether or not, non-compliance of requirement of S. 73 of the Sales Tax Act, 1990 ('the Act, 1990') would be sufficient for the department to disallow input tax adjustment and for an order for recovery of the principal amount along with default surcharge and penalty---Appellate Tribunal allowed the appeal preferred by the taxpayer against disallowance of the input tax adjustment by Assistant Collector, which order was assailed by the Collector / Department by filing Sales Tax Reference---Validity---Record revealed that Assistant Collector disallowed the input tax adjustment of the respondent/registered person on the ground that the payment had not been made in accordance with the requirement of S. 73 of the Act, 1990---Section 73 of the Act 1990 required payment of an amount for a transaction exceeding the value of Rs. 50,000/ = however, in the present case, the amount involved was less than Rs.50,000/=---It was not the case of the applicant / department that the respondent was claiming input tax adjustment against fake invoices or had evaded the payment of tax---Section 73 of the Act, 1990 did not prescribe the penalty of disallowing the input adjustment for failure to show compliance with the requirement of S.73 of the Act, 1990---Appellate Tribunal had upheld the penalty of Rs. 5,000/= imposed on respondent for not showing compliance with the requirement of S.73 of the Act, 1990---Applicant department had failed to give reason for interference of the High Court in the order passed by the Appellate Tribunal---Sales Tax Reference filed by the department was dismissed, in circumstances.
- Ibrar Hussain, representative for Respondent No.2.
- 2. All the above mentioned questions are interlinked and the pivotal question is whether non-compliance with the requirements of Section 73 of the Sales Tax Act, 1990 ("the 1990 Act") would be sufficient for the Department to disallow input tax adjustment of Rs.39,977/- and for an order for the recovery of the principal amount of Rs.39,977/- along with default surcharge and penalty be ordered.
Headnotes / Summary
Riaz Hussain Azam Bopara for Applicant.
Judgment & Decree
C.M. No.1054 of 2019. Mr. Ibrar Hussain, representative of respondent No.2 has not opposed the applicant for the restoration of the captioned reference. For the grounds taken in the application for the restoration of the captioned reference, the same is allowed and the captioned sales tax reference is restored to its original number. MAIN CASE The questions of law framed by this Court vide order dated 20.05.2009 are as follows:-- "a) Whether Section 73 of the Sales Tax Act is mandatory or procedural and violation of this Section is illegal and is not the irregularity and procedural defect? b) Whether the respondent No.2 violated the provisions of section 73 read with Section 7(1) of the Sales Tax, 1990 and the input adjustment was liable to be disallowed Penal surcharge and the penalty is legal and justified. c) Whether after admitting before Collector appeal that the payment of purchases were made in cash and not through the bank instrument as required under section 73 of the Sales Tax, 1990 amounts to admitting/confessing the charge framed in the show-cause notice and whether any appeal lies in the higher forum after admission by the respondent No.2."
2. All the above mentioned questions are interlinked and the pivotal question is whether non-compliance with the requirements of Section 73 of the Sales Tax Act, 1990 ("the 1990 Act") would be sufficient for the Department to disallow input tax adjustment of Rs.39,977/- and for an order for the recovery of the principal amount of Rs.39,977/- along with default surcharge and penalty be ordered.
3. Section 73 of the 1990 Act requires payment of an amount for a transaction exceeding the value of Rs.50,000/-, excluding payment against utility bills, to be made by crossed cheque drawn on a bank or by crossed bank draft or crossed pay order or any other crossed banking instrument showing the transfer of the amount of the sales tax invoice in favour of the supplier from the business bank account of the buyer. In the case at hand, it is an admitted position that respondent No.2 (Messrs Rasuls) had adjusted input tax amounting to Rs.39,977/- in August, 2005 and June, 2006 but the payment had not been made in accordance with the requirements of Section 73 of the 1990 Act. Therefore, the Assistant Collector (Adjudication), Islamabad vide order in original dated 01.01.2008 had disallowed the input tax adjustment of Rs.39,977/-. Respondent No.2's appeal before the Customs, Central Excise and Sales Tax Appellate Tribunal, Islamabad ("the Appellate Tribunal") was allowed vide judgment dated 25.08.2008.
4. It is not the Department's case that respondent No.2 was claiming input tax adjustment against fake invoices or had evaded the payment of tax. Section 73 of the 1990 Act does not prescribe the penalty of disallowing the input tax adjustment for failure to show compliance with the requirements of Section 73 of the said Act. The Appellate Tribunal has upheld the penalty of Rs.5,000/- imposed on respondent No.2 for not showing compliance with the requirements of Section 73 of the said Act.
5. Since we have been given no reason to interfere with the order dated 25.08.2008 passed by the Appellate Tribunal, the instant reference is answered in the negative. MQ/72/Isl. Reference dismissed.