Law: Sales Tax Act, 1990

Section: 36,7,8,8A,10,11,23,26,2(14),2(37),73

Sales Tax Act (VII of 1990)---Ss. 36, 7, 8, 8A, 10, 11, 23, 26, 2(14), 2(37) & 73---Sales Tax Refund Rules, 2006, R.12---Recovery of tax not levied or short levied or erroneously refunded---Post refund audit of refund claims showed that registered person received refund deliberately, knowingly and fraudulently against fake/flying invoices issued by the supplier, which was blacklisted---Registered person was charged with violation of the provisions of Sales Tax Act, 1990 and was called upon to show cause as to why sales tax may not be recovered along with default surcharge and penalty---Registered person/appellant contended that he purchased goods from supplier up to 06/2006 through valid sales tax invoices and the payments were made through banking channel, whereas the supplier was blacklisted on 17-11-2007, meaning thereby that at the time of making business transactions with the supplier, they were having status as "operative" and he had committed no irregularity/fault in making business transactions with the suppliers having "operative" status , and if the supplier was blacklisted later on, it could not have a retrospective effect---Validity---During post refund audit of refund claims for the tax period 11/2005, 02/2006 to 04/2006 and 06/2006, it was observed that the appellant received refund deliberately, knowingly and fraudulently against fake/flying invoices issued by the supplier which was blacklisted on 17-11-2007---At the time of making business transactions with the supplier by the appellant/registered person, the supplier was not blacklisted and had "operative" status---Order through which the suppliers were blacklisted was an executive order and the orders or notifications, which confer rights and were beneficial, would be given retrospective effect and those which adversely affect or invade upon vested rights could not be applied with retrospective effect---Appeal was accepted by the Appellate Tribunal and orders in original as well as order in appeal were set aside. Government of Pakistan v. Messrs Village Development Organization 2005 SCMR 492 rel. Messrs Al-Hilal Mines Stores and others v. The Collector of Sales Tax and Federal Excise…

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