Law:

Section:

Sales Tax Act (VII of 1990)----Ss. 2(37), 3, 11, 33, 34 & 4b-Federal Excise Act (VII of 2005), S.3-A-Failure to pay sales tax on supplies and commission of tax fraud-Recovery of sales tax with default surcharge and imposition of penalty-Appellant made huge sales during relevant period, but allegedly failed to pay sales tax as well as Special Excise Duty in violation of provisions of Ss.3 & 11 of Sales Tax Act, 1990, and S.3-A of Federal Excise Act, 2005-Show-cause notice was issued, calling appellant as to why said amount of Sales Tax and Special Excise Duty could not be recovered from him under S. 11 of Sales Tax Act, 1990 and S.3-A of Federal Excise Act, 2005 along with default surcharge and penalties-Adjudicating Authority, vide order-in-original, adjudged liability of sales tax and Special Excise Duty against appellant and Authority also imposed 100% penalty on amount of tax on appellant under S. 33(13) of Sales Tax Act, 1990 along with default surcharge- Order-in-original passed by Adjudicating Authority, was upheld by Appellate Authority-Validity-"Recovery of Sales Tax not levied" could not be made/adjudged under S. 11(2) of Sales Tax Act, 1990, which always provided for "Assessment of Tax"-Cases of assessment made out of sales tax returns of a registered person, should all the more be adjudicated under S. 11(2) of the Sales Tax Act, 1990 and the cases of "Tax fraud" as defined under S.2(37) of the Act, involving evasion of Sales Tax in a collusive and mala fide way, were very much precluded from the ambit and scope of S. 11(2) of Sales Tax Act, 1990 and was always to be proceeded with the bar under Specific provisions of S. 11(3) or as the case may be, under S.36(l) of Sales Tax Act, 1990-No mention of provisions of S. 11(3) or S.36(l) of Sales Tax Act, 1990, had been found in the show cause notice which rendered the same illegal, unlawful and without jurisdiction-Department had also failed to establish any nexus between receipts appeared in the Bank accounts of different persons with that of sales shown in manual as well as computerized books of accounts of the appellant-In absence of any corroborating material evidence co-relating receipt of…

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