Law: Sales Tax Act, 1990

Section: 34,33(13),37

Law: Federal Excise Act, 2005

Section: 8

[Sales Tax Act (VII of 1990)]........Sections 34, 33(13), 37,, Federal Excise Act, 2005, Section 8,, Audit,, Claim,.. Adjustment,.. Input tax,.. Special Excise Duty,, Show-cause Notice,.. Order-in-Original,, Default surcharge,.. Penalty,.. Recovery,, Appeal to the CIR(A) who amended the impugned order up to the extent to pay the balance amount along with the default surcharge to be calculated under Section 34(1), Sales Tax Act 1990, under section 11(2) & 36(1) of the Act ibid and an amount of SED along with default surcharge under Section 8 of the Federal Excise Act, 2005 and remitted the penalty under Section 33(13), Sales Tax Act, 1990 being harsh, hence this departmental appeal.,, "Prior knowledge",, Learned D.R challenged the impugned order as unjustified and arbitrary by contending that the respondent had claimed the input tax on account of fake invoices issued by the suppliers mentioned in the impugned order, during the course of verification all such suppliers were either found non-existent at their given addresses or gave statement that they had never sold the raw material to the respondent, hence the learned CIR(A) was not justified in remitting the imposed penalty otherwise, on the one hand the CIR(A) had held that the appellant had claimed inadmissible input tax adjustment against fake invoices issued by the fraudster gang and hence liable to pay the principal amount along with default surcharge and on the other hand held that question of "ghost purchases" did not appeal to mind and, consequently remitted the penalty imposed under Section 33(13) of the Sales Tax Act, 1990,.. Contention of the respondent that he did not have the "prior knowledge" about the fake invoices was also not correct in as much as on one side the respondent was engaged in transactions of the value of million of rupees but on the other side he did not know about the bona-fide of the persons to whom huge payments on account of purchase of goods were made,.. In view of the learned Tribunal, the learned D.R. had failed to dislodge the concurrent findings through any documentary evidence that the appellant had purchased and consumed raw material and supplied the finished goods…

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