Law: Sales Tax Act, 1990

Section: 8B,8B(1),8B(2),11,11(2),25,38,71,72B,72D

THIS ORDER PASSED BY: JAWAID MASOOD TAHIR BHATTI (CHAIRMAN):------------------ Titled appeal has been filed at the instance of the taxpayer calling in question the impugned order dated 10-12-2014 passed by the learned CIR(Appeals-I), Lahore. 2. The facts leading to the case involved are that through the show cause notice dated 16.05.2014 it was alleged that the appellant has adjusted 100% of input tax during tax periods January, February, May, September 2012, June, July, August and September 2013 in violation of the provisions of section 8B{1) of the Sales Tax Act, 1990 read with SRO 647(I)2007 dated 27.06.2007. The appellant was called upon to show cause as to why the alleged amount may not be recovered along with default surcharge and penalty. Being dis-satisfied with the reply, the DCIR passed order in original No. 17/2013-14/23T9 dated 30 09.2014 through which he uphold the charged leveled in the show cause notice. 3. Being aggrieved with the impugned findings recorded by the DCIR, the taxpayer filed appeal before the learned CIR (Appeals-I) which has been rejected through Appellate Order No. 03 dated 10-12-2014 Hence, this appeal before the Tribunal. 4. During the course Of hearing, the learned counsel of the taxpayer argued that the proceedings under section 11(2} were beyond jurisdiction as the same had been initiated without prior selection for audit under section 72B by the Board and authorization by the Commissioner under section 25 to call for record He contended that the appellant is engaged in manufacture of leather articles including footwear which are sold at reduced rate of sales tax under SRO 1125(I)/2011 dated 31.12.2011 as has been issued by the Federal Government In exercise of powers conferred under section 71 of the Sales Tax Act, 1990 and section 71 of the Act overrides all the other provisions of the Act inter alia including those of section 8B, hence the appellant Is not obliged to claim input tax of 90% of its output tax as has been prescribed in section 8B which is not applicable to the persons for whom a special procedure has been laid down by the federal government in exercise of powers conferred under section 71 by overriding all…

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