2003 PLP (Trib (PTD)

Abdul Waheed for Appellant. Imran Tariq, D.R. for Respondent. Date of hearing: 7th January, 2002. MIAN ABDUL QAYYUM, MEMBER (JUDICIAL).‑This appeal is directed against Sales Tax Order‑in‑Original No. 1118 of 2001, dated 19‑6‑2001 passed by the. Deputy Collector (Adjudication), Multan. By this order, the learned Adjudicating Officer has directed Messrs Sun Distributors, Railwaywala Road, Muzaffargarh (the appellants herein) to pay additional tax in terms of section 34 of the Sales Tax Act, 1990 on account of sales tax paid after the due dates as detailed below:‑‑ (1) Appellants claimed inadmissible input tax of Rs.26,888 in the tax period 7 of 1998, which was subsequently deposited in parts i.e. Rs.19,425 on 4‑9‑2000 and Rs.7,463 on 30‑1‑2001. (2) They claimed inadmissible input tax adjustment of Rs.2,641 in the tax period 8 of 1998 which was deposited subsequently on 30‑1‑2001. (3) They short paid an amount of Rs.60,000 during the tax period 8 of 2000. The amount was subsequently deposited on 30‑1‑2001.

2. While directing the appellants to pay additional tax, the learned Adjudicating Officer did not impose any penalty observing that the miscalculation was made by the appellants for the first time in the year. Following the impugned order, the department worked out the amount of additional tax at Rs.76,746 and issued a recovery notice, dated 24‑7‑2001 to the appellants.

3. It has been argued on behalf of the appellants that they had deposited entire amount of sales tax due from them before the preparation of contravention report or assurance of show‑cause notice, dated 8‑6‑2001. According to the appellants, since there was no deliberate intention on their part to withhold the payment of sales tax, therefore, it was not a case requiring imposition of additional tax. The learned counsel for the appellants relied upon a number of precedents of this Tribunal whereby additional tax was remitted in similar circumstances.

4. The learned departmental representative opposed the appeal.

5. We have given careful consideration to the submissions made by the appellants. It is admitted that the amounts of sales tax due from the appellants as detailed in para 1 of this judgment were deposited long after the due dates. According to section 34 of the Sales Tax Act, 1990, if a registered person does not pay the tax due or any part thereof in time, he shall, in addition to the tax due, and prescribed penalties, pay A additional tax at the rate prescribed therein. The words "shall pay" used in this section, in contradiction section to the words "shall ...be liable to pay case used in this section prior to its amendment in 1996 make it mandatory for a registered person to pay the amount of additional tax due in the case of late payment of sales tax prima facie leaving no discretion with the Adjudicating Authorities to remit or reduce it. While holding this view we are guided by the judgment of Honourable Lahore High Court titled Mamy Beverage, v. Naseem 1995 PTD 91 and the judgment of Sindh High Court in Constitutional Petition No. D‑368 of 1995 titled Ideal Glass (Pvt.) Ltd. v. Federation of Pakistan decided on 27‑11-1998. However, despite this amendment in, section 34 changing the words "be liable to pay" to "shall pay" there may be cases calling for judicial review of the amount adjudged on account of additional tax in case there are any compelling reasons for the same (Appeal No.1671/LB of 2001, decided on 1‑3‑2002). There is no doubt the superior Courts have held that penalties should not be imposed in cases where default is I not wilful or deliberate. But additional tax must be distinguished from the penalties, in that these are two distinct and separate charges provided for in the Sales Tax Act. In this case, the Adjudicating Officer has already taken a lenient view by not imposing penalty in view of the circumstances of the case but the appellants have no case for remission of additional tax as they have provided no explanation whatever for late deposit of the amount. There are a number of precedents of this Tribunal where the levy of additional tax has been upheld in similar circumstances.

6. In view of the foregoing discussion, we do not see any force in the appeal, which is rejected being without merit. C.M.A./720/Tax (Trib.) Appeal rejected.