Law: Sales Tax Act, 1990

Section: 37A,37B

(a) Taxation--- ----Tax law---Purpose---Civil and criminal---Collection of tax---Punishment/deterrence---Tax was a fiscal tool to regulate the monetary policy of the State, hence, the primary focus of a tax law was the levy and collection of tax, however, as a white collar crime, tax evasion, etc had also been criminalized with the collateral effect of retribution and deterrence, in addition to achieving the fiscal incentives of the State---While assessment of tax liability was characteristically a civil proceeding, tax evasion or tax fraud, etc. could also be a tax crime and attracted both civil, as well as, criminal penalties---Under civil proceedings the tax was assessed and recovered as a compensation along with monetary penalties, while under criminal prosecution, tax evader was punished with imprisonment of fine or both. (b) Administration of justice--- ----Concurrent civil and criminal proceedings---Stay of criminal proceedings---Scope---Criminal and civil proceedings could co-exist and proceed side by side, in cases where the subject matter of both the proceedings was so closely interrelated, so that the outcome of the civil proceedings could have a material bearing on the criminal proceedings---Safer course, however in such a situation was to stay the criminal proceedings till the finalisation of the civil matter. Akhlaq Hussain Kayani v. Zafar Iqbal Kiyani and others 2010 SCMR 1835 and Muhammad Akbar v. The State and others PLD 1968 SC 281 rel. (c) Sales Tax Act (VII of 1990)--- ----Ss. 11, 37A & 72B---Self-assessed taxpayer---Tax evasion---Selection for criminal prosecution---Scope---Section 37A of the Sales Tax Act, 1990 could be employed to select or pick a taxpayer out of the pool of self-assessed taxpayers to undergo criminal prosecution without first carrying out an objective selection process of audit followed by assessment of tax under S. 11 of the Sales Tax Act, 1990---Criminal prosecution, generally, had no nexus with assessment of tax liability and could not be equated with cases selected for audit---While self-assessment scheme guarded the sanctity of self-assessed sales tax returns it afforded no protection to a criminal act committed…

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