Law: Sales Tax Act, 1990

Section: 2(37),3,6,7,8,8A,14,22,23,25,26,33,34,38 ,73

ORDER CH. ANWAAR UL HAQ (Judicial Member): The instant appeal has been preferred by the department against Order in-Appeal No. 16/A-II/2011 dated 26-04-2011 passed by the Commissioner (Appeals-II), Inland Revenue, Lahore. 2. Brief facts leading to the instant appeal are that information was received from the Directorate of Intelligence and Investigation, Lahore about Mr. Waqas Ali Ch. Muhammad Kashaf Tahir and Furqan Ahmad Rind and others that they were operating a gang to defraud national exchequer by committing tax fraud by way of issuing fake sales invoices. The gang misused sales tax registration numbers of more than 39 registered persons for issuing fake sales tax invoices. Electronic profiles of said 39 registered persons revealed that the fraudsters were using the names of these registered persons for issuance of fake sales tax invoices to different registered persons and resultantly causing loss to the Government Exchequer and were convicted accordingly. During scrutiny of record, it was observed that the appellant has claimed inadmissible adjustment of input tax of Rs. 200,529/- in violation of the provisions of sections 3, 6, 7, 8, 8A, 14, 22, 23, 25, 26, 38 and 73 of the Sales Tax Act, 1990 committing the offences punishable u/s 33 read with section 2(37) of the Sales Tax Act, 1990. The registered person choose to deposit voluntarily, the principal amount of sales tax of Rs. 200,529/-. As a consequence, the adjudication officer passed order vide assessment order dated 06 08-2011, directing the registered person to pay default surcharge (to be calculated at the time of deposit) alongwith penalty equal to the 100% of the amount involved. 3. Being aggrieved, the registered person preferred appeal before the learned CIR (A), who after considering the arguments of learned AR of the registered person adjudicated the appeal in the following manner: - "The AR of the appellant also contended that the issue of depositing the principal demand had already stood settled as agreed by the appellant. The AR pleaded that the tax payer is not an intentional defaulter and is equally cheated by the fraudsters. On this plea he requested for waiver of penalty…

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