Default surcharge

Assessing officer failed to fulfill requirements of law which proved that before initiating action under S. 161 of Income Tax Ordinance, 2001, he should determine that (i) taxpayer was a withholding agent and had come under the definition of prescribed person; (ii) transactions were liable to deduction / withholding, and (iii) specific tax of a specific person was to be withheld who could take credit of tax recoverable under S. 161 of Income Tax Ordinance, 2001

In case statements under S. 165 of Income Tax Ordinance, 2001, were not filed or the same were filed but were lacking in making correct disclosure, the appropriate course was to confront taxpayer on such account and impose penalty under S. 182 of Income Tax Ordinance, 2001

Assessing officer was satisfied with quality of disclosures required to be made in terms of statements under S. 165 of Income Tax Ordinance, 2001, as he did not give any findings in his order to the effect of any deficiency in such statements filed

There was no scope and mandate of S. 161 of Income Tax Ordinance, 2001, to make inquiries from taxpayer

Entire edifice of such proceedings under S. 161 of Income Tax Ordinance, 2001, was defective and flawed

Appellate Tribunal Inland Revenue set aside orders passed by both the fora below

Appeal was allowed, in circumstances.

Default surcharge ought not to be imposed in a perfunctory manner and may only be warranted upon proper adjudication as to willful default and the presence of mens rea.

Penalties under fiscal laws are quasi criminal in nature and warrant imposition in the presence of culpable intent.

Section 34 of the Sales Tax Act, 1990 is materially not different in scope from Ss.161 & 205 of the Income Tax Ordinance, 2001, relating to default and willful default and the levy of default surcharge on a hypothetical basis, and without establishing willful default on the part of taxpayer, is illegal.

Even non-payment of tax due to misinterpretation of law in good faith does not attract a penalty.

Taxpayer has the right to file an estimate of the advance tax payable under S. 147(6) of the Income Tax Ordinance, 2001 and thereafter pay an amount that the taxpayer deems to be due in accordance with such estimate

Income Tax Ordinance, 2001 vests no authority in the taxation authorities to recover the amount that they deem to be due under S. 147 in contradiction of any tax estimate filed by the taxpayer under S. 147(6)

Scheme of the Income Tax Ordinance, 2001, is based on self assessment undertaken by the taxpayer

Income Tax Ordinance, 2001, vests power in taxation authorities to undertake reassessment of the tax return filed by a taxpayer in compliance with the provisions of the Ordinance and seek recovery of any non-payment or short payment on the basis of such reassessment

Section 147(6) also enables taxpayer to self-assess advance tax liability to the extent that such taxpayer estimates that the tax payable for the relevant tax year is likely to be less than the amount he is required to pay under S. 147(1)

In the event that the estimate filed by the taxpayer under S.147(6) is incorrect, a remedy is provided under S. 205 to impose a surcharge to the extent of short payment to penalize the taxpayer

This interpretation of law is further strengthened by the provisions of the Finance Act, 2018, pursuant to which a proviso was added to section S. 147(6) of the Ordinance which provides taxation authorities with the authority erstwhile not extended i.e. to affect recovery if such authorities come to the conclusion that the estimate filed under S. 147(6) is misconceived.

Imposing of penalties in case of committing default in payment of tax or late filing of sales tax returns is not automatic and some determination which regard to element of mens rea is required and the presence of mens rea is essential for imposition of any penalty under the law

Mens rea, in short, denotes the state of mind that would compel a person to deviate from the law or to commit an offence which also encompasses recklessness within its ambit

Concept of mens rea basically resolves around the state of mind and the conduct of the person and it is necessary to establish mens rea before levying penalty.

Each and every case has to be decided on its own merits as to whether the evasion of payment of tax was willful or mala fide, decision of which would depend upon the question of recovery of additional tax.

Imposing of penalties in case of committing default in payment of tax or late filing of sales tax returns is not automatic and some determination with regard to element of mens rea is required and the presence of mens rea is essential for imposition of any penalty under the law

Mens rea in short denoted the state of mind that would compel a person to deviate from the law or to commit an offence which also encompassed recklessness within its ambit

Concept of mens rea basically revolved around the state of mind and the conduct of the person

Necessary to establish mens rea before levying penalty and imposition of penalty was a quasi-criminal act.

Section 3 of Sales Tax Act, 1990 is a charging section but under the said section the appropriate authority is officer of Inland Revenue, whereas S.6 defines the mode and manner of collection of sales tax at import stage by the Customs Authority, resultantly, it is not a charging section instead a machinery section

Section 7 of the Sales Tax Act, 1990, speaks about determination of tax liability at the time of filing of sales tax return under S. 26 of the Sales Tax Act, 1990, this is a machinery section as well and S.33 contains penal clauses synonymous to S. 156(1) of the Customs Act, 1969

Section 34, Sales Tax Act, 1990, speaks about default surcharge to be paid upon contravention and establishing of the charge under charging section

Section 148 of Income Tax Ordinance, 2001, prescribes the procedure for collection of income tax at import stage by the authorities referred therein, meaning thereby that the said sections are independent under which no charge can be invoked.

Petitioners impugned notices for payment of sales tax default surcharge issued by Gas Utility Company on behalf of Department

Question before High Court was whether Gas Utility Company could be delegated right and responsibility to adjudicate, impose and recover default surcharge from its subscribers under S.34 of Sales Tax Act, 1990

Held, that while Department did initiate proceedings against Gas Utility Company for recovery of such default surcharge however, no proceedings were initiated against its subscribers / petitioners

Issuance of impugned notices by company, prima facie, had not been preceded by requisite adjudication process by relevant authority

Impugned notices being devoid of any show-cause notice, and adjudication process, were therefore illegal and void ab initio, and set aside

Constitutional petitions were allowed, accordingly.

Legislature under S.34 of Sales Tax Act, 1990 did not provide Appellate Tribunal with any authority to create a window-period for taxpayer to pay any tax that had not been paid willfully or inadvertently without attracting default surcharge

Once Appellate Tribunal determined that payment of tax was due, it could not have carved out a period of sixty days for payment of principal amount with no default surcharge

Application of default surcharge under S.34 of Sales Tax Act, 1990 was automatic and triggered even in cases where non-payment of tax due was not deliberate but inadvertent

Reference was answered accordingly.

Section 3 of Sales Tax Act, 1990, is indeed a charging section but under the said section if the appointing authority is officer of Inland Revenue

Section 6 of Sales Tax Act, 1990, defines mode and manners of collection of sales tax at import stage by the Customs Authorities and on supply by the manufacturer/seller, resultant it is not charging section instead a machinery section

Section 7 of Sales Tax Act, 1990, speaks about determination of tax liability at the time of filing of sales tax return under S.26 of Sales Tax Act, 1990, this is a machinery section as well

Section 33 of Sales Tax Act, 1990, contains penal clauses synonymous to S.156(1) of the Customs Act, 1969

Section 34 of Sales Tax Act, 1990, speaks about default surcharge to be paid upon establishing the charges under the charging sections

Likewise, S.148 of Income Tax Ordinance, 2001, prescribes the procedure for collection of Income Tax at import stage by the authorities referred therein

Meaning thereby that the said sections are independent under which no charge can be invoked.

Appellant assailed order passed by Commissioner (Appeals) whereby he, while adjudicating the matter in first appeal, had confirmed the tax demand under the heads 'carriage out charges', 'advertisement and printing expenses'

Validity

Commissioner (Appeals) had passed the order after detailed discussion in line with the relevant provisions of law and available documents

Appellant could not come up with any justification/supporting documents and merely reiterated its stance as stated mainly in the grounds of appeal

Appeal, being devoid of merits, was dismissed.

Appellant filed monthly statements under S.165, Income Tax Ordinance, 2001 but the assessing officer observed that the tax was not properly withheld

Assessing officer held that out of the salaries paid at Rs.22,937,920/-, taxable payments were shown at Rs.14,729,456/- and the record of the remaining amount of Rs.8,208,464/- was not produced; out of the other expenses amounting to Rs.74,690/-, only record relating to the amount of Rs.4500/- was produced and that the amounts of Rs.74,164/- and Rs.49,598/- on account of repair, maintenance, printing and stationery were not supported by the required details

Validity

Assessing officer had not specifically mentioned the details which were withheld

Assessing officer had imposed the penalty without confronting the appellant and without establishing mens rea

Appellate Tribunal remanded the matter to the assessing officer with directions to specifically identify the payments for which details were not provided

Appeals were disposed of accordingly.

Question before High Court was whether petitioner was entitled to benefit of, and amnesty provided by, SRO No.494(I)/2013 10.06.2013 which allowed exemption from payment of default surcharge and penalty under Sales Tax Act, 1990; when admittedly petitioner had already paid principal amount of sales tax before issuance of said SRO

Held, that said SRO did not provide any condition of limiting dates for payment of principal amount of tax between date of issuance of SRO and end of financial year on 30.06.2013

Due amount of principal of sales tax determined had been paid by petitioner before cut-off date stated in said SRO and petitioner therefore could not be deprived from availing its benefit on ground that such payment was made by petitioner before issuance of said SRO

Beneficial SRO / notification had retrospective effect

High Court held that petitioner was entitled to benefit of SRO No.494(I)/2013 dated 10.06.2013

Constitutional petition was allowed, in circumstances.

Section 3, Sales Tax Act, 1990, being a charging section cannot be invoked by anyone other than an officer of Inland Revenue

Section 6 of the said Act contains machinery provision that lays down the procedure relating to collection of sales tax at import stage like customs duty, thus, cannot be used to charge anyone for an offence

Section 148, Income Tax Ordinance, 2001 is a machinery provision akin to section 6 of Sales Tax Act, 1990, which empowers Customs authorities to collected income tax like customs duty on imported goods

Provisions which provide a mechanism/mode of collection are not to be construed as charging provisions even through inapt interpretation as they could neither abridge nor expand the scope of a charging section in an Act/Ordinance

Such provisions are independent ones under which no charge can be invoked

No show-cause notice can be issued under said provisions

Issuance of show-cause notice while invoking irrelevant/erroneous provisions of law renders the same illegal and as such void ab initio.

Section 3 of Sales Tax Act, 1990 is a charging section and under this section the appropriate authority is an Officer of Inland Revenue

Section 6, Sales Tax Act, 1990 defines the mode and manner of collection of sales tax at import stage by the customs authorities, resultantly it is not a charging section instead, it is a machinery section

Section 33 contains penal clauses and S.34, Sales Tax Act, 1990 speaks about default surcharge to be paid upon establishing the charges under the charging sections

Section 148 of Income Tax Ordinance, 2001 prescribes the procedure for collection of income tax at import stage by the authorities referred therein

No charge can be framed and show-cause notice cannot be issued under said sections, which are independent and have no nexus with each other.

Section 3 of Sales Tax Act, 1990 is a charging section and under said section the appropriate authority is an Officer of Inland Revenue

Section 6, Sales Tax Act, 1990 defines the mode and manner of collection of sales tax at import stage by the customs authorities, resultantly it is not a charging section instead, it is a machinery section

Liability of sales tax of a registered person is determined for a tax period under S. 7, which stipulates that, subject to the bar contained under S. 8, a registered person is entitled to deduct the input tax that has already been paid from the output tax

Net amount arising thereby is paid along with the monthly return under S.26 of Sales Tax Act, 1990

Section 33 contains penal clauses and S.34 provided default surcharge to be paid upon establishing the charges under the charging sections

Section 148 of Income Tax Ordinance, 2001 prescribes the procedure for collection of income tax at import stage by the authorities referred therein

No charge can be framed under said sections

No show-cause notice can be issued under said sections, which are independent and have no nexus with each other.

Section 3 of Sales Tax Act, 1990 is a charging section and under the said section appropriate authority is an officer of Inland Revenue

Section 6 of the Sales Tax Act, 1990 defines the mode and manners of collection of sales tax at import stage by Customs Authorities, while S. 7 of the said Act states about determination of tax liability at the time of filing of sales tax return, thus both the provisions are machinery provisions

Section 33 of the Sales Tax Act, 1990 contains penal clauses synonymous to S. 156(1) of Customs Act, 1969 and S. 34 of the Sales Tax Act, 1990 deals with default surcharge to be paid upon contravention and establishment of charge

Section 148, Income Tax Ordinance, 2000 describes the procedure for collection of income tax at import stage by the authorities referred therein

Said provisions are independent under which no charge can be invoked

No show-cause notice can be issued under aforesaid provisions which are independent and have no nexus with each other

Issuance of show-cause notice while invoking irrelevant/erroneous provisions of law renders the same void ab initio and of no legal effect.

Appellant was charged for suppression/ concealment of un-registered sales/supplies; non-payment of sales tax and late filing of sales tax returns

Registered person was called upon to show cause under S. 11(2), Sales Tax Act, 1990, as to why sales tax may not be recovered alongwith default surcharge and penalty

Adjudication proceedings culminated in passing of order for recovery of sales tax alongwith default surcharge and penalty

Commissioner Inland Revenue (Appeals) upheld the action of assessing authority

Contention of registered person was that audit proceedings were completed under S. 11(3), Sales Tax Act, 1990 which section was inserted through Finance Act, 2012 dated 26.06.2012, therefore, recovery of sales tax not levied and not charged for the period starting from 1st July, 2009 to 30th July, 2012 could not be adjudged through impugned show-cause notice

Validity

Tax period involved in the present case was relevant to months of July 2011 to June 2012 and the assessing authority had illegally invoked the provisions of S. 11 to recover the tax for the said periods

Provisions of S. 11 came into statute book through Finance Act, 2012, therefore, said provisions were not applicable retrospectively

Appellate Tribunal allowed the appeal and vacated the orders passed by the authorities below.

Section 3, Sales Tax Act, 1990, being a charging section cannot be invoked by anyone other than an officer of Inland Revenue

Section 6 contains machinery provision that lays down the procedure relating to collection of sales tax at import stage like customs duty, hence, cannot be used to charge anyone for an offence

Section 7 of the Sales Tax Act, 1990 speaks about determination of sales tax liability at the time of filing sales tax return under S. 26 of the said Act which is also a machinery section

Section 33 of the said Act contains penal clauses synonymous to S. 156(1) of Customs Act, 1969

Section 34 of Sales Tax Act, 1990 speaks about default surcharge to be paid by the taxpayer upon confirmation of charges

Section 148, Income Tax Ordinance, 2001 is a section containing machinery provision akin to S. 6 of Sales Tax Act, 1990, which empowers Customs authorities to collect income tax like customs duty on imported goods

Provisions which provide a mechanism/mode of collection are not to be construed as charging provisions even through inapt interpretation as it could neither abridge nor expand the scope of a charging section in an Act/Ordinance

Said provisions are independent under which no charge can be invoked

No show-cause notice can be issued under said sections

Issuance of show-cause notice while invoking irrelevant/erroneous provisions renders same illegal and as such void ab initio.

Section 3, Sales Tax Act, 1990, being a charging section cannot be invoked by anyone other than an officer of Inland Revenue

Section 6 is a machinery section that lays down the procedure relating to collection of sales tax at import stage

Customs authorities, with the exception of Clearance Collectorate, cannot charge anyone under the said section

Section 7 provides determination of sales tax liability at the time of filing sales tax return, and thus a machinery section

Section 33 contains penal clauses synonymous to S. 156(1) of Customs Act, 1969 and S.34 provides about default surcharge to be paid upon contravention and establishment of charge

Both the sections are independent under which no charge can be invoked

No show-cause notice can be issued under said sections

Issuance of show-cause notice while invoking irrelevant/erroneous provisions renders the same void ab initio and of no legal effect.

Section 3, Sales Tax Act, 1990, being a charging section cannot be invoked by any Authority other than an officer of Inland Revenue

Section 6 of the said Act is a machinery section that lays down the procedure relating to collection of sales tax at import stage while S.7 lays down about determination of sales tax liability at the time of filing sales tax return, thus a machinery section

Section 33 of Sales Tax Act, 1990 contains penal clauses synonymous to S.156(1) of Customs Act, 1969

Section 34 of Sales Tax Act, 1990 deals with default surcharge to be paid upon contravention and establishment of charge

Section 148, Income Tax Ordinance, 2001 prescribes the procedure for collection of income tax at import stage by the authorities referred therein

Said sections are independent under which no charge can be invoked

No show-cause notice can be issued under aforesaid sections which are independent and have no nexus with each other

Issuance of show-cause notice while invoking irrelevant/erroneous provisions renders the same void ab initio and of no legal effect.

Authorities were aggrieved of deleting default surcharge under Ss.161 & 205 of Income Tax Ordinance, 2001, by Appellate Tribunal Inland Revenue

Validity

Provisions of S.34 of Sales Tax Act,1990, were materially not different in scope from the provisions of Ss.161/205 Income Tax Ordinance, 2001, relating to term 'default' and 'wilful default'

High Court declined to interfere in the order passed by Appellate Tribunal Inland Revenue as the same did not suffer from any factual error or legal infirmity and had depicted correct legal position

Reference was dismissed in circumstances.

Bare perusal of S.34 of the Sales Tax Act, 1990 revealed that payment of default surcharge was not confined only to cases of willful default but same could be demanded in cases where there was default "otherwise"; and the word "otherwise" is defined as "in a different way"; "in other respects"; "as an alternative".

Subject matter of the appeal before the Commissioner (Appeals) was in relation to the default surcharge under S. 205 of Income Tax Ordinance, 2001

Commissioner had passed the stay order and later extended the same from time to time

Commissioner, having validly passed the earlier (initial stay) order with regard to the subject matter of the appeal (even if the same had been extended beyond the scope of the subject matter of the appeal), had no power to recall said order

Commissioner, in order to rectify the mistake (stay order extended beyond the scope of the subject matter of the appeal), had committed another mistake while recalling the entire stay order

High Court modified the impugned order to the extent that the stay order would be deemed to have been in operation and not recalled to the extent of the amount of default surcharge which was the subject matter of the appeal

Constitutional petition was accepted in circumstances.

Deputy Commissioner, Inland Revenue, issued show cause notices to petitioner for three Tax Years for which orders under S. 161 read with S. 205 of Income Tax Ordinance, 2001 had already been passed under proceedings initiated earlier

Contention by petitioner was that once proceedings under S. 161 read with S. 205 of Income Tax Ordinance, 2001 had been finalized, second order for same year was not sustainable

Department took plea that first order was silent regarding issue as to submission of grower certificate or details of commission of agents during proceedings

Validity

If liability in impugned show cause notices was palpably unlawful, ultra vies, without jurisdiction or with mala fide intent, such action was to be nipped in the bud

If dispute had arisen between parties in respect of fiscal right based upon statutory instrument, same could easily be determined in constitutional jurisdiction

Present constitutional petition against impugned show cause notices was, therefore, maintainable

Earlier proceedings under S. 161 read with S.205 of Income Tax Ordinance, 2001 against petitioner had already been finalized resulting into creation of demands against him

Department, in earlier proceedings, had passed orders after consideration and examination of relevant record for relevant period

No justification, therefore, existed for initiation of fresh proceedings

Issue on basis of which proceedings had been re-initiated by successor-in-office had already been deliberated in light of prevalent circulars, and contentions of petitioner had been accepted

Petitioner's claim that he had purchased agricultural produce during relevant period through commission agents had been accepted by department while passing (earlier) order under S. 161 read with S. 205 of Income Tax Ordinance, 2001

CBR

Circular No.4 of 2011, dated 02.04.2011 had clearly provided that if purchases were made through commission agents then grower certificates were not required if tax had been withheld on commission in terms of S. 233 of Income Tax Ordinance, 2001

If there was any mistake, deficiency or error in calculation of tax, same could be rectified under S. 221 of Income Tax Ordinance, 2001

When assessment had been made in respect of income, any error or omission appearing therein could be rectified under S. 221 of Income Tax Ordinance, 2001, and fresh assessment could not be made in that respect as that would be double assessment, which was not permissible under law

Impugned show cause notices issued under S.161 read with S. 205 of Income Tax Ordinance, 2001 were declared illegal and without lawful authority

Constitutional petition was allowed in circumstances.

Non-obstante clause in the context of S. 11 of Sales Tax Act, 1990, and use of expression "shall" makes imposition of default surcharge mandatory.

Taxpayer sought adjustment advice for tax period July, 2006, and Adjudication Officer observed that the adjustment had been made against invoices issued by another registered person

Authorities issued show cause notice and imposed recovery of default surcharge under S. 34 of Sales Tax Act, 1990, and further penalty was imposed

Plea raised by taxpayer was that Adjudicating Officer could not have ignored Sales Tax (Refund of Excess Input Tax to the Manufacturers) Rules, 2005

Validity

Procedure for claiming benefit envisaged under Sales Tax (Refund of Excess Input Tax to the Manufacturers) Rules, 2005, was distinct and separate and could be confused with recovery proceedings initiated in case of alleged non-levy or short levy of tax

Adjudication proceedings had no nexus with Sales Tax (Refund of Excess Input Tax to the Manufacturers) Rules, 2005, nor Adjudicating Officer empowered to examine claims under Sales Tax (Refund of Excess Input Tax to the Manufacturers) Rules, 2005

Proceedings for recovery of tax under S. 36 of Sales Tax Act, 1990, were distinct and separate from proceedings relating to claims made by registered person for refund and under Sales Tax (Refund of Excess Input Tax to the Manufacturers) Rules, 2005

Reference was disposed of accordingly.

Levy of default surcharge without identifying date of deduction and corresponding date of deposit could not be held justified

In the absence of terminal end and without determination of the default period the levy of default surcharge was not possible as both opening deductible event and terminal end were missing

Levy of default surcharge on hypothetical basis and without establishing wilful default on the part of taxpayer was illegal and nullity in the eye of law.

Revenue had adjusted the adjudged principle amount of sales tax against its refund in consequence of a letter of the taxpayer

Federal Board of Revenue, at the relevant time, issued S.R.O. 648(I)/2011 dated 25-6-2011 which applied to the taxpayer's case as well

Request of the taxpayer on this score in the light of amnesty order/S.R.O. 648(I)/2011, dated 25-6-2011 was allowed and order-in-original was modified accordingly.

Taxpayer contended that in non-profit organization, no individual gains or any monetary benefit by evasion or non-payment of taxes was involved; and that ordinarily the mens rea or guilty intention could not be attributed to welfare organizations

Validity

Taxpayer had declared "NIL" income for the reason that receipts on various counts were considered by it to be exempt from levy of tax

Levy of default surcharge/ additional tax was not tenable in this case.

First Appellate Authority observed that "Taxation Officer had imposed tax under a wrong premises of law, as the base years upon which additional tax was based was quashed by the Appellate Tribunal and the demand created had no locus standi; and it was illegal and could not be sustained in law and was vacated"

Order of First Appellate Authority was upheld by the Appellate Tribunal and appeal filed by the department was dismissed.

Revenue contended that taxpayer failed to substantiate its claim of refund due; and penalty and additional tax was rightly charged

Validity

First Appellate Authority vacated the order with the observation that "no legal demand was created under S.121, 122(5A), 122A or 122B of the Income Tax Ordinance, 2001 to undo the effects of order under S.120 of the Income Tax Ordinance, 2001; and if it was presumed for academic sake that the demand was payable by the taxpayer, even then the taxpayer had prepayments to its credit; and even during intervening period i.e. date of order under S.162 of the Income Tax Ordinance, 2001 to date of setting aside by the Appellate Tribunal, neither default surcharge nor penalty was imposable

When taxpayer had discharged its legal liability by filing return of income and paid due tax , then the order gained finality; and it was neither hit by disability of S.120(3) of the Income Tax Ordinance, 2001, not amended under S.122(5A) of the Income Tax Ordinance, 2001

Additional tax or penalties were not payable due to clear cut stipulation of S.161(1B) and S.162(2) of the Income Tax Ordinance, 2001

As legal demand had not been created, the credit/refund of taxes paid could only be given to order under S.120(1) of the Income Tax Ordinance, 2001 and was ordered accordingly

Due to inbuilt infirmities and contradictions in order under Ss.205/124, 183(1)(a) and 183(1)(b) of the Income Tax Ordinance, 2001, these were void ab initio in law and facts and could not be sustained in law and were vacated"

Appellate Tribunal did not interfere the order of First Appellate Authority as the same had rightly been vacated

Order of First Appellate Authority was upheld by the Appellate Tribunal and appeals filed by the department were dismissed.

Detection report was issued by alleging that taxpayer had charged and collected Special Excise Duty on their supplies but failed to deposit the same in national exchequer

On the basis of detection report, show cause notice was issued for payment of Special Excise Duty along with default surcharge without mentioning any penalty

Taxpayer contended that in other cases default surcharge had only been charged after adjustment of special excise duty paid on import and local purchases and no penalty was charged; that according to Art. 25 of the Constitution, all citizens are equal; that orders passed on the basis of grounds not mentioned in the show cause notice were ab initio illegal and void and no demand could be raised on the basis of illegal notice; that Revenue had admitted that all documents regarding adjustment of input of Special Excise Duty were provided i.e. purchase register, purchase invoice, bill of entries and payment proof under S.73 of the Sales Tax Act, 1990 and paid the balance amount by availing amnesty scheme; and that if the taxpayer had deposited the principle amount of Special Excise Duty collected at the relevant time and claimed benefits of amnesty, there was no tax fraud on the part of taxpayer

Validity

No fraud was alleged or confronted by the department in the show cause notice or in subsequent proceedings

Even otherwise Government had exempted whole of the amount of default surcharge and penalties payable

Assessing Officer himself admitted that registered person had provided all the documents regarding adjustment of input of Special Excise Duty i.e. purchase register, purchase invoice, bill of entries and proof of payment under S.73 of the Sales Tax Act, 1990 and paid balance amount by availing amnesty scheme

By allowing credit of tax paid under amnesty scheme, the Assessing Officer himself admitted the availability of amnesty scheme to the taxpayer

Levy of default surcharge under S.8, penalty under S.19(1) and fine under S.19(3)(c) of the Federal Excise Act, 2005 were not attracted in circumstances

Order of Assessing Officer was cancelled by the Appellate Tribunal being not maintainable in the eye of law and order of First Appellate Authority was vacated.