Law: Sales Tax Act, 1990

Section: 2(37),8A,11(3),30A,36(1),36(3),proviso,4 5B(3),45(3)(2),73

Law: Qanun-e-Shahadat (10 of 1984)

Section: 177

(a) Sales Tax Act (VII of 1990)--- ----S. 2(37)---Tax fraud---Condition---Mandatory condition put forth for committing tax fraud was that the alleged person should have done any act knowingly, dishonestly or fraudulently and without any lawful excuse. (b) Sales Tax Act (VII of 1990)---Ss. 2(37) & 73---Qanun-e-Shahadat (10 of 1984), Art.117---Tax fraud---Adjustment of input tax---Evidence---No evidence was available where from it could be deduced that the taxpayer had knowingly or dishonestly or fraudulently committed tax fraud by claiming input tax adjustment against the sales tax invoices issued by the fraudster gang---Even audit contravention report could not be established with any concrete reasoning that the taxpayer was involved in tax fraud by claiming illegal sales tax input tax and had in any way violated the provisions of S.2(37) of the Sales Tax Act, 1990---Department had failed to fasten blame at the taxpayer's door---Entire edifice had been built, to hold the taxpayer as fraudulent, on conjecturers and surmises and whimsical inference had been drawn against the taxpayer on such set of facts---Record proved that there was ample justification with the taxpayer to claim adjustment of input tax, such as all the suppliers were registered persons and their status was active as per Federal Board of Revenue Website; they were regularly submitting their sales tax returns and summaries thereof; all the payments were made by the taxpayer in accordance with the provisions of S.73 of the Sales Tax Act, 1990: and taxpayer did not have any prior knowledge about fakeness of the sales tax invoices issued by the suppliers. 2004 PTD 868; 1988 CLC 578; 1990 ALD 619; 1988 MLD 552; PLD 1988 Kar. 28; 1982 CLC 1286; 1990 ALD 142(2); 1995 MLD 690; PLD 1997 Kar. 6; 2000 MLD 720; 2000 PLC 172; 2000 PLC 194; 2000 YLR 801; 2001 CLC 1922 and 2001 MLD 159 ref. (c) Sales Tax Act (VII of 1990)--- ----S. 36(1)---Recovery of tax not levied or short-levied or erroneously refunded---Premises of S.36 of the Sales Tax Act, 1990 was that show-cause notice could only be issued where non-levy, short-levy or erroneous refund had been caused by the reason of some collusion or a deliberate…

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