2006 PLP 515 (PTD)

SYED HAMID ALI SHAH, J.

The petitioner has' voiced its grievance against the demand of Additional tax through demand notices, dated 27-10-2004, 13-11-2004 and 23-12-2004, wherein the respondents insisted on charging additional tax @ 5% on compound basis under the law,, prevalent prior to amendment in section 34 of the Sales Tax Act.

2. Brief facts giving rise to this petition are that order in original dated 24-7-2004 was passed by respondent No.1 /Additional Collector, Sales Tax, wherein the petitioner was ordered to deposit Sales Tax amounting to Rs.15,363 along with the Additional tax payable under section 34(1) of the Sales Tax Act, 1990. Penalty of Rs.5,000 was also imposed. The petitioner paid the amount of Sales Tax in the sum of Rs.15,363, penalty of Rs. 5,000 and additional tax on simple basis at a rate of 1% on 8-11-2004. The respondents through notice dated 23-12-2004, created the liability of Additional tax under the law, which stood amended on 1-7-2003, on the plea that the invoices which were made the basis for imposition .of penalty and additional lax were pertaining to the years 1996-97 and additional tax is to be charged under the law, which was prevalent at the time of issuance of invoices.

3. Learned counsel for the petitioner has argued that while passing the order in original dated 24-7-2004, respondent No.1 has ordered the payment of additional tax under section 34(1) of the Sales Tax Act, 1990. The order in original was passed at the time, when the additional tax leviable was, 1% on simple basis and since no specific order as to the charging of rate of additional tax finds mention in the impugned ; order, therefore, it will mean the rate which was prevalent at the day when order in original was passed. He further contended that as against the original tax of Rs.15,000, the respondents are claiming Rs.344,000 as additional tax, which even otherwise is inequitable. Learned counsel concluded that in a Tax Statute, a beneficial interpretation is to be adopted.

4. On the other hand, learned counsel for the Revenue, has fully supported the impugned action of the respondents. He has argued that the additional tax can be levied at a rate which was prevalent at the time of the default invoices which in the present case pertained to the period 1996-97 and as such the petitioners are liable to pay additional tax on that rate. Learned counsel has vehemently argued that the petitioner had a remedy of filing an appeal against order in original and in view of the availability of the alternate remedy, the instant petition is not maintainable.

5. I have heard the learned counsel for the parties and perused the material available on the record.

6. There is no cavil with the proposition that in a taxing statute, the interpretation which is beneficial to a tax payer, is to be adopted. I am not inclined to dilate upon this principle as there are plethora of judgments, wherein the superior Courts had held that fiscal provision should be interpreted to the benefit of subject and benefit of any ambiguity should go to him. If any case law is needed, reference can be made to "Collector of Customs, Customs House, Lahore and 3 others v. Messrs S.M. Ahmad & Company (Pvt.) Limited, Islamabad 1999 SCMR 138.

7. The order in original was passed at the time when .the provisions of section 34(1) stood amended. Respondent No.1 while passing the order, has not ordered payment under the provisions of law which stood repealed. Naturally, additional tax can be levied and charged on the rate which was prevalent as per law on the date on which the order in B original was passed. The petitioner has paid the amount of additional tax on simple basis at a rate of 1% which was the law prevalent. I do not see any justification in issuance of the impugned notices of recovery. The learned Division Bench of this Court in an unreported case (C.A. 85-2002) has held as under:

"The orders in original imposing additional tax as well as penalties shall, therefore, be restored. However, keeping in view the beneficial amendments made in section 34 (additional tax) of the Act during pendency of these proceedings, the Revenue shall charge the additional tax at the rate which is applicable in similar cases as of today."

8. The objection of the respondents that the remedy of appeal is available to the petitioner, is not well founded. The petitioner is not aggrieved of order in original dated 24-7-2004 but his grievance is against the demand which has been raised through the impugned notices, against which no right of appeal is available to him. Thus the instant petition is maintainable.

9. For the foregoing, this petition is accepted and notices of recovery dated 27-10-2004, 13-11-2004 and 23-12-2004 are declared to have been issued without lawful authority and with no legal effect. Parties to bear their own costs. S.A.K./S-524/L Petition accepted.