Tax Assessment

2020 PTD 614 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN Judicial Precedent

Ss. 3, 25, 38, 45-B, 72-B & 73Exclusion of Audit Policy, 2015, Part-6, Para. 6.3(e)Notification S.R.O. No. 648(I)/2013 dated 09-07-2013Second appealTax assessmentSecond/Duplicate auditSupplies to end-consumersDouble jeopardyEffect

Taxpayer was a registered person who was audited by tax authorities and was imposed surcharge and penalty on account of discrepancies against which taxpayer filed appeal before Commissioner Inland Revenue (Appeals) who remanded matter to the assessing authority

Taxpayer filed second appeal on grounds that Commissioner Inland Revenue (Appeals) could not remand matter and that entire assessment proceedings were presumptive because he was already audited before

Validity

Audit for alleged tax periods had already been carried out by department, subsequent audit carried out by department under S.72-B of Sales Tax Act, 1990 and consequential assessment order passed was not sustainable being sheer violation of Federal Board of Revenue on instructions contained in Exclusion of Audit Policy, 2015

Sales made to end-consumers were excluded and exempted for purpose of levy of further tax in terms of Notification SRO No. 648(I)/2013 dated 09-07-2013 issued under first Proviso to S.3(1A) of Sales Tax Act, 1990 therefore, no further tax was payable by taxpayer against supplies made to end-consumers

Detecting agency had raised exorbitant demand of sales tax merely on assumptions and presumptions without tangible basis and failed to provide documentary or any other corroborating evidence regarding physical delivery of goods, receipt of any consideration of money and more so, existence of any buyer without no supply could be effected under S.3 of Sales Tax Act, 1990

Appellate Tribunal Inland Revenue declared that case was totally based on hypothetical calculations without any solid proof which established beyond shadow of doubt that liability of sales tax was based on figures and calculations, which were imaginary and presumptive, without any logical and legal basis and no tax could be levied on basis of presumption and assumption

Sales tax imposed on presumption or presumption not warranted in law was to be struck down

Appellate Tribunal Inland Revenue cancelled show-cause notice and consequent orders by two authorities below as same were illegal, void ab initio and without jurisdiction

Appeal was allowed accordingly.

2019 PTD 1286 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN Judicial Precedent

Ss. 121(1)(d), 122 & 138(1)Tax assessmentShow-cause notice, non-compliance ofLimitationEffect

Taxpayer was aggrieved of assessment order passed by appellate authorities for not providing record for audit by the taxpayer

Taxpayer assailed that said notice and true copy was never received by him and that such proceedings were not in his knowledge

Validity

Beneath the order of District Collector Inland Revenue, signature with date was discernable, neither said testament bore name, address, CNIC number of receiver nor same bore sign and endorsement by witnesses in whose presence same was received

Every likelihood existed that signatures were of person who was assigned to deliver same to the taxpayer

Elucidate difference existed between signature of receiver of order in question and in signature of the taxpayer

Signature of taxpayer marked on Vakalatnama also proposed that signatures of taxpayer was different from the recipient of order in question

Appellate Tribunal Inland Revenue set aside order passed by appellate authorities and remanded the matter to decide same on merits after giving opportunity of being heard to the taxpayer

Appeal was allowed accordingly.