Law: Sales Tax Act, 1990

Section: 21,21(3),8A,33,34,36,73

Sales Tax Act (VII of 1990)---Ss. 21(3), 8A, 33, 34, 36 & 73---De-registration, blacklisting and suspension of registration---Post refund audit---Registered person had received inadmissible refund against invoices of certain suppliers whose registrations were either suspended/cancelled or were declared blacklisted---Notice for recovery of such sales tax amount along with default surcharge and penalty with direction to pay the sales tax along with default surcharge and penalty equal to 100%---Registered person contended that he had not committed any default in making business transactions as the suppliers at the relevant time were active and alive registered person produced the purchase record to prove the physical transfer of goods and proof of payments---Registered person further contended that after insertion of subsection (3) of S.21 of the Sales Tax Act, 1990 by Finance Act, 2011 input tax shall be allowed if payments were made through banking channel---Validity---First Appellate Authority had allowed refund on the basis of orders of the Appellate Tribunal wherein it had been held that input tax credit against invoices of such blacklisted person could not be denied and sales tax refunded thereon could not be recovered after insertion of subsection (3) of S.21 of the Sales Tax Act, 1990 wherein it had categorically been laid down that input tax shall be allowed if payments were made through banking channel irrespective of the fact that the supplier units were either blacklisted or their registration had been suspended and Revenue had not been able to point out any legal flaw therein---No interference, in circumstances, in the order was warranted---Departmental appeal was rejected by the Appellate Tribunal. 2005 SCMR 492; S.T.A. No.1415/LB of 2008; S.T.A. No.1393/LB of 2008 and S.T.A. No.1334/LB of 2009 ref. 2012 PTD (Trib.) 453 rel. ORDER This appeal preferred at the instance of the department is directed against the Order-in-Appeal No.63 of 2011 dated 19-4-2011 passed by Commissioner Inland Revenue (Appeals), Faisalabad. 2. Facts of the case in brief are that during the course of post refund audit for the tax period 7/2006 to 6/2007 of the registration…

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