Law: Sales Tax Act, 1990

Section: 11(1),26(1),33,34

Law: Income Tax Ordinance, 2001

Section: 182(1)

THIS ORDER PASSED BY: SHAHID MASOOD MANZAR, JUDICIAL MEMBER: ------- The instant appeal has been filed by the appellant/Registered Person against Sales Tax Order-in-Appeal No.112/479/2015 dated 23.11.2015 recorded by the learned Commissioner Inland Revenue (Appeals-III), Rawalpindi. The Registered Person has contested the appeal before this Tribunal on the following grounds:- 2. That the impugned show-cause notice and orders passed by the lower forum are bad in law and contrary to the facts and circumstances of the case. 3. That filing of returns was a mechanical action and non- filing of return has not resulted any low loss to the national exchequer. 4. That the superior courts have held that there is no willful evasion of duty/tax imposition of penalty is illegal even if ere appeared to be violation of rules. 5. That the superior courts held that mens rea or willful default are essential ingredient for imposing penalty and in the aforementioned scenario no mens rea or willful default can be attributed in this case. 6. ...... 7. That without prejudice of the other submissions on show cause notice there is no mens rea attributed to the respondent, hence no punitive provision of the Sales Tax Act, 1990 is attracted to the Appellant cause. 8. The additional tax and surcharge under section 34 of the Sales Tax Act, 1990 are not in intractable liability of a taxpayer in as much it all depend upon the attitude of the taxpayers in suffering the default which if not deliberate, intentional or contumacious would qualify for being visited the same. In this regard reliance is placed on PLD 1991 SC 963. 9. That without prejudice a case of legitimate error could not be equated with a willful evasion specially when there is no motive for evasion involved, thus under the circumstances of the case, the appellant company is not liable to any penal provision of chapter VII of the Sales Tax Act, 1990. 10. That no sales tax was evaded by the appellant and the imposition of penalty u/s 33 & default surcharge u/s 34 of the Act, is illegal. 2. Brief facts of the case as from the impugned order that the Taxation Officer observed that the appellant/Registered Person had not filed…

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