Law: Sales Tax Act, 1990

Section: 21,21(2),2(14)

Sales Tax Act (VII of 1990)---Ss. 21(2) & 2(14)---Sales Tax General Order No. 35/2012 dated 30-6-2012---De-registration, blacklisting and suspension of registration---Registration was suspended on the ground that the registered person had adjusted input/output against sales/purchases of black-listed/ suspended/non-filer units and supply of goods had not taken place and taxpayer had committed tax fraud---Taxpayer contended that registration was suspended on the basis of presumptions without bringing any material evidence on record and Federal Board of Revenue had issued a uniform policy for suspension and blacklisting of sales tax registered persons; that if the Commissioner was satisfied that a registered person had issued fake invovices, evaded tax or committed tax fraud, suspension of registration shall be through a written order; that Commissioner shall issue a show-cause notice within seven days of the issuance of such order and in case, after giving an opportunity of hearing the offence was established the order of blacklisting shall be issued within 90 days of the issuance of the notice of hearing; that the period of 90 days had already lapsed but no such order was passed by the Commissioner; that suspension was void ab initio and illegal; that blacklisting as well as non-restoration of registration was an extreme step having paralyzing effect on business of any commercial enterprise and on its financial reputation as well and such type of action should be taken as a last resort after establishing the gross violations of main factors i.e. "(1) if registered person was found to have committed tax fraud, (ii) evaded tax and (iii) Registered person had failed to deposit the tax due on his supplies despite having recovered it from respective buyers"; and that such action of black-listing or suspension of registration and none of the violations of any of the incidences had been established in the present case---Validity---Order of suspension was made on the basis of presumptions without bringing any material evidence on record by the Commissioner---Even the legal requirements as envisaged in Sales Tax General Order No.35/2012 dated 30-6-2012 had not been…

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