Law: Sales Tax Act, 1990

Section: 36,36(3),2(44),3(1A),6,7,22,23,26,73

Sales Tax Act (VII of 1990)---Ss. 36(3), 2(44), 3(1A), 6, 7, 22, 23, 26 & 73---Sales Tax General Order (STGO) No.1 of 2004---Recovery of tax not levied or short-levied or erroneously refunded---Defective show cause notice in respect of deliberation, collusion, specific allegations and evidence---Validity---Show cause notice revealed that requirements laid down by S.36 of the Sales Tax Act, 1990 were not met and show cause notice did not allege that the offending acts were deliberate or there stood a collusion---Allegations were not specific and no evidence to support the same was gathered or provided to the taxpayer---Department was duty bound to supply grounds or reasons in clear and explicit words to ascertain under which subsection of S.36 of the Sales Tax Act, 1990 the case would fall---No such effort was made by the department and show cause notice remained defective and failure to abide by the law had rendered the show cause notice invalid---Administrative authorities had to function within the frame work of law---Law was to be followed as was directed and requirements stated in the statute were to be followed in letter and spirit---Appellate Tribunal observed that it the tendency of administrative authorities that often they acted on their personal whims and failed to follow the commands of law, and that in such circumstances they were not protracted by law and cases made out by them were going to be defeated---Show cause notice was defective and did not have any legal effect---Orders were set aside by the Appellate Tribunal. Caltex v. Collector 2006 SCMR 1519 and AC Customs v. Khyber Electric Lamps 2001 SCMR 838 rel. ORDER The appellant was served with a show-cause notice on 17-4-2005, the preamble of which states: "it has been reported by the Assistant Collector (Legal) that during the course of Audit for the period 2002-2003 of Messrs Anwar Engineering Works, Plot No.C-17, Street No.28-B, Muhammad Road, Shershah, Karachi having Sales Tax Registration No.11-00-8708-022-82. The following discrepancies were noted,.". 2. According to the show cause notice, no further inquiry was conducted by the Deputy Collector who issued the show-cause notice and…

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